SINGAPORE (ICIS)--Southeast (SE) Asia’s isopropanol (IPA) prices appeared to have bottomed out after last week’s downtrend as demand looks to be stable to strong but supply is limited, according to market sources.
- Limited supplies left as some sold
out for August-shipping cargoes
- End users speculate prices; procure additional volumes
- Supply could tighten further with unplanned cracker issues
ICIS data on 03 August showed the southeast Asia assessment at $870-890 CFR (cost & freight) SE Asia, with several deals concluded at the low end of the range.
Higher discussion levels took place after these trades, with the majority of buying indications revised higher amid bullish sentiments in the market.
Limited suppliers were left in the IPA market when propylene-based IPA hit a $100/tonne high against acetone-based IPA.
Coupled with tight Chinese supply amid the continued shutdown of a major domestic and export supplier, domestic and Asia demand were left to the remaining Chinese suppliers.
China is a major supplier of IPA to the Asia region.
In the seasonal lull during the summer months, local downstream demand in applications including paints and resins was lacklustre.
Therefore, the remaining Chinese producers were not really under pressure to deliver the material, although at least one producer claimed to be backlogged until at least the end of August.
“With the limited number of suppliers left in China, demand is considered steady, even with end-users buying on a need-to basis,” said a local producer.
An offer for September shipping from a Chinese exporter later on Monday was announced at $880/tonne CFR SE Asia.
Some buying indications were at $850/tonne CFR SE Asia, which was last seen on 06 July 2018, ICIS data showed. The bid was apparently rejected.
Majority of buying indications, however, were at $880/tonne CFR SE Asia, with the market deeming the figure to be a reasonable selling indication and reflective of current market levels, with several suppliers sold out for August-shipping cargoes.
“Some end-users may be speculating about IPA prices so they are asking for additional volumes now,” said a southeast Asian trader.
Some buyers were also looking for September-shipping cargoes after their regular supplier informed them the latter could not deliver during the period due to allocation issues.
“Overall, demand will start to pick up after the summer lull sentiment is starting to look bullish,” said a southeast Asian trader.
Focus article by Yuanlin Koh