NE Asia C3 markets continue to bemuse, outlook uncertain

Source: ICIS News

2019/03/11

SINGAPORE (ICIS)--Spot propylene markets in northeast Asia look set to track developments in the Shandong domestic market, which continues to see swings but has been on a downtrend since the start of March.

 - Market participants to tread carefully

 - Opportunistic buying in Shandong

 - Supply tightens in South Korea but demand in China slow

Demand in the Shandong region could still be tepid in the week after one downstream producer started its turnaround on 10 March.

It delayed the start for about two days in a bid to bring its propylene inventory down.

That said, buyers could also start to enter the spot market to take advantage of lower prices, something they have done in recent times.

There were some buying heard late in the previous assessment week that ended on 8 March but that did not arrest the fall in prices.

In the import market, both buyers and seller will unsurprisingly start the week in a cautious mood and will no doubt watch developments in the Shandong market closely.

With import talks moving to April arrivals, selling pressure seen in the week that ended 8 March could be alleviated slightly.

There were, however, still some prompt March arrival cargoes on hand for at least one trader so there could still be some urgency expected.

In South Korea, spot supply has tightened lately with producers heading for turnarounds but it did precious little to boost prices.

It only resulted in slowing spot trades between producers and traders as both did not see reasons to do deals.

Buyers in China are expected to gauge supply levels in the domestic markets first before they enter into talks for April arrivals and bid levels are expected to be fairly close to the equivalent domestic prices as domestic supply is widely seen as ample.

Trades could be done at a slower pace week on week.

Sellers might want to bide their time to see if the market could turn in their favour.

Some might even take the safe option which is to do deals on formula-linked basis.

Prices in the import market were down some $30/tonne on average, finishing the assessment week at $890/tonne CFR (cost and freight) NE (northeast) Asia on 8 March.

Shandong prices fell some CNY (Chinese Yuan) 50-600/tonne. The price was CNY 6,400-7,200/tonne Ex Tank Shandong.

ICIS Editorial Chart goes here

Top Image credit:  Shutterstock

Additional reporting by Doris He

Focus article by Joson Ng