FocusNE/SE Asia methylene chloride may weaken on tepid demand

28 October 2013 07:55  [Source: ICIS news]

By Heng Hui

Methylene chloride is also used as an auxiliary foam-blowing agent in the production of low-density and soft polyurethane foams, which are mainly used in furniture, bedding and carpet.SINGAPORE (ICIS)--Methylene chloride spot prices in northeast and southeast Asia may fall in the coming weeks as demand continues to be weak, and with the key China market saddled with high inventory of the material, industry sources said on Monday.

Bulk of discussions for November-delivery lots were at $540-600/tonne (€389-432/tonne) FOB (free on board) China, down by $30/tonne from October deals, while prices in southeast (SE) Asia were quoted $20/tonne lower at $560-60/tonne CIF (cost, insurance and freight), they said.

China, Taiwan, Japan and South Korea are the main suppliers of methylene chloride to southeast Asia, which does not produce the material.

Weak buying appetite brought down the price discussion for November shipments out of China despite firm chlorine costs, market players said. Chinese producers with mounting inventory are being forced to revise down their export offers.

Prices of feedstock chlorine have stabilised in end-October at  prices have stabilised to around yuan (CNY) 800/tonne ex-tank in Jiangsu, following a sharp increase on the back of strong demand.

Demand for methylene chloride remains weak, with some producers continuing with production in order to use up the available chlorine from the manufacture of caustic soda.

Chlorine is a by-product of caustic soda.

Methylene chloride is mainly used as a solvent in a variety of pharmaceutical applications. Its usage in the production of refrigerant HFC-32 has been growing. The chemical is also used as an auxiliary foam-blowing agent in the production of low-density and soft polyurethane foams, which are mainly used in furniture, bedding and carpet.

In India, however, domestic prices of methylene chloride may continue to increase, with imports dwindling as authorities prepare to slap antidumping duties (ADDs) on imports from from South Korea and the US.

October import cargoes were concluded at higher prices compared with September, in view of the sharp depreciation of the rupee. A weaker currency makes imports more expensive. Bids and offers for November-loading cargoes were heard at around $450-500/tonne CIF India.

This week, local methylene chloride cargoes in India were heard traded at rupees (Rs) 42,000-48,000/tonne ($684-781/tonne) EXWH (ex-warehouse) for orders of 100-500 tonnes, while prices for bulk material increased by Rs1,000/tonne from the previous week to Rs43,000-44,000/tonne EXWH, market sources said.

($1 = Rs61.43 / $1 = €0.72)

Additional reporting by Angeline Soh

Read John Richardson and Malini Hariharan’s blog – Asian Chemical Connections


By: Heng Hui
+65 6780 4359



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