Asia petrochemical markets seek new lows after oil collapse
SINGAPORE (ICIS)–Key petrochemical markets in Asia plunged to new lows on Thursday, following a collapse in crude prices overnight on concerns over weakening demand amid the coronavirus pandemic.
Spot prices of petrochemical feedstock naphtha for first-half May delivery extended losses in early trade, averaging at $231.00/tonne CFR (cost & freight) Japan, down $13/tonne from the previous day’s Asia close.
Naphtha prices are now languishing at a 17-year low on the back of frail downstream demand which has pulled down spot cargo premiums.
Paraxylene (PX) slumped to a new low not seen since 2008, while benzene plunged below $400/tonne; and toluene tumbled $90/tonne at midday to $315/tonne FOB (free on board) Korea.
Further downstream, maleic anhydride (MA) import offers in southeast Asia continued to slip, while N-butanol and 2-ethylhexanol (2-EH) discussions were also lower.
Crude prices rebounded on Thursday supported by fresh stimulus packages from the US and EU, after plunging to their lowest levels in almost two decades on Wednesday after Saudi Arabia signaled it will keep producing at a record 12.3m barrels per day “over the coming months”.
At 03:39 GMT, Brent crude was up by 1.89% higher after tumbling more than 13% on Wednesday to its lowest since March 2003; while US WTI gained 7.12% after tumbling almost 25% in the previous session to its lowest level since February 2002.
|Prices in $/bbl||Last price||% change||Net Change||Previous Close||Session High||Session Low|
In China’s commodities futures markets, trading was temporarily halted for both purified terephthalic acid (PTA) after losing 5%; and linear low density polyethylene (LLDPE) futures, which slumped by 4%.
(as of 04:00 GMT)
|Monoethylene glycol (MEG)||3,591||-5.0%|
|Polyvinyl chloride (PVC)||5,895||-3.6%|
|Purified terephthalic acid (PTA)||3,452||-5.0%|
China reported no new domestic cases of the novel coronavirus – the first time since the outbreak began in the country late last year.
“Although data indicate that China’s efforts to contain the virus have been largely successful, it still faces risks from a second wave of infections, slumping external demand and worsening US-China bilateral relations,” Japan’s Nomura Global Markets Research said in a note.
“With the spread of COVID-19 [novel coronavirus] to the rest of the world, China’s economy now faces a worsening demand shock in addition to the COVID-led supply shock,” it said.
The total number of confirmed coronavirus cases globally stood at around 218,000 as of early Thursday, with the death toll surpassing 8,800. The coronavirus has now spread to more than 150 countries and territories.
At least 16 countries outside China reported caseloads of more than 1,000 infections, as more countries continue to lock their borders.
In an unprecedented move, EU countries have agreed to close all external borders for countries within the group for 30 days.
Malaysia shut its border with Singapore starting 18 March, a day after the World Health Organization (WHO) called on member states in Southeast Asia to “urgently scale up aggressive measures” to combat the coronavirus.
Focus article by Nurluqman Suratman
Additional reporting by Fanny Zhang, Melanie Wee, Samuel Wong, Clive Ong, Lucy Shuai, Aviva Hu
(Photo by imageBROKER/Shutterstock)
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