SINGAPORE (ICIS)--Plasticizers markets in Asia is likely to see a general demand slow down as the Lunar New Year approaches.
- Buyers stay cautious
- Cost pressures remain for producers
- Sellers banking on post-holiday demand
Producers, on the other hand, are not likely to let cargoes go on the cheap at this juncture with cost rising due to recent uptrend in feedstock prices.
Upstream propylene and 2-ethylhexanol (2-EH) prices have firmed on tightened supply as some producers have cut output, and others seriously considering cutting operating rates.
The Lunar New Year, which is celebrated in most parts of northeast and southeast Asia, falls on 25 January, with China to be on holiday for a full week from 24 January.
Buyers of plasticizers could use the long holiday as an opportunity to study the market further. Buying remained cautious with no big upswing in demand and downstream demand post-holiday is uncertain.
Post-holiday, some buyers may find themselves having lower inventories, while some producers could be sitting on slightly more cargoes as there are no scheduled turnarounds among northeast Asian plants.
Players have turned to looking at price movements in the previous years for some clues on market direction.
For dioctyl phthalate (DOP), post-Lunar New Year spot prices in east Asia had risen since 2017, although the upswing was comparatively slight in 2019.
On 9 January 2020, DOP average spot prices were assessed at $940/tonne CFR (cost and freight) east Asia, up $5/tonne from the week before, according to ICIS data.
Focus article by Joson Ng
Photo: Container port in Qingdao, Shandong Province, China. (By Yu Fangping/Pacific Press Via Zuma Wire/Shutterstock)