02 July 2012 08:13 [Source: ICIS news]
“The situation is getting tougher for producers because feedstock costs have rebounded in the past few weeks but demand is still very weak. Some producers are considering diverting their feedstock to other products,” a trader said.
Propylene prices rose by $40-60/tonne (€32-47/tonne) to $1,270-1,330/tonne CFR (cost and freight) northeast (NE) Asia during the week ended 29 June following a recent power outage at Taiwanese producer Formosa Petrochemical Corp’s (FPCC) Mailiao complex on 20 June.
The spot prices of acetone, an alternative feedstock for IPA, were up $20/tonne at $880-900/tonne CFR China during the same period.
In contrast, IPA prices slumped by $10/tonne to their lowest level in about six months at $1,140-1,160/tonne CFR NE Asia in the week ended 29 June.
Weak margins together with a slowdown in domestic and regional demand have prompted
It is unclear how long the shutdown will be, they added.
South Korean producer ISU Chemical has yet to set a restart date for its 30,000 tonne/year line that halted operations at the end of May because of the uncertain market conditions, a market source said.
“They are hoping to restart the plant this month but the operating rates will likely to be kept low,” the source said.
Separately, JX Nippon Oil & Energy is halting production at its 85,000 tonne/year facility in
Sellers hope that the spate of shutdowns and the strong rebound in crude futures on 27 June will help to stabilise prices and encourage buyers to resume imports.
“Supply is getting lower and feedstock costs are rising. Hopefully, this means that prices are bottoming out and buyers will have the confidence to restock again," a trader said.
However, activity in such derivative applications as paint and coatings is expected to be slower in southeast Asia during the Muslim fasting month of Ramadan, which will start in the second half of July, distributors in southeast Asia said.
($1 = €0.79)
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