01 February 2011 04:32 [Source: ICIS news]
By Nurluqman Suratman and Felicia Loo
SINGAPORE (ICIS)--Asia’s petrochemical prices will remain underpinned by strong fundamental demand coming from energy giant China, even as global Brent crude futures pierced the $100/bbl (€73/bbl)-mark on concerns that Egypt’s political unrest could lead to oil supply disruptions, industry experts said on Tuesday.
At midday Tuesday, Brent crude for March delivery was valued at $100.43/bbl, after breaking above $100/bbl for the first time since October 2008 on Monday.
The oil price rally was a stark reminder of July 2008 when prices soared to an all-time peak of $147.27/bbl, and a few months later in December, plummeted to $33/bbl because of the global recession.
Asia is still expected to guzzle a colossal quantity of petrochemical products, with prices seen buoyant, and undeterred by feedstock naphtha levels at a 28-month high of $894.50-897.50/tonne CFR (cost and freight) ?xml:namespace>
”Rising crude oil prices will be offset by rising petrochemical prices, so the spread would be well-preserved and the overall impact on profitability for (chemical) companies would be minimal,” said Gordon Kwan, head of energy research at Mirae Asset Securities in Hong Kong.
“We expect Brent crude oil prices would average at around $100/bbl this year,” he said.
Prices would remain at such levels, with
“Demand is still good,” said an oil trader in
“I think it is more important to look at the demand for petrochemicals rather than oil being at the $100/bbl mark. As long as there is demand for petrochemicals there would not be any negative surprises for the sector,” Kwan said.
Fundamentally, there was real demand for petrochemicals in
Trading typically slows down in
Restocking activity would provide an impetus for polyethylene (PE) and polypropylene (PP) prices in
For styrene, tight supply was expected to remain for the whole of 2011 in
In December 2010,
Ethylene imports in December jumped 37% year on year to 88,445 tonnes and butadiene imports grew 67% to 38,727 tonnes, according to data from China Customs.
Naphtha imports soared 22% year on year and 23% month on month to 406,738 tonnes in December, the data showed.
A caveat remains if
“Any surprises, such as
Borrowing costs in
“As long as the
($1 = €0.73)
Additional reporting by James Dennis
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