China butyl glycol discussions rise on tighter supply, peak demand

Bonnie Yin

22-Sep-2020

SINGAPORE (ICIS)–Butyl glycol (BG) import discussions in China were higher in the week on the back of tightened supply, coinciding with a peak demand season.

Some selling indications were quoted at above $950/tonne CFR (cost & freight) China.

In the week ended September 16, import butyl glycol prices were stable at $850-920/tonne CFR (cost and freight) China.

Supply in China’s domestic market remained tight, with distributors left with few remaining inventory, while a major domestic facility with an 80,000 tonne/ year capacity was shut for 10 days from September 11 due to feedstock shortage.

Ex-tank discussions in both the south and east China markets were at yuan (CNY) 8,700 /tonne, up by CNY200-500/tonne ($29-74/tonne) week on week.

Few import offers were made to China as plants are running at reduced capacity, and as some 4,000 tonnes of BG have been delayed due to a coronavirus scare, according to market sources.

Supply from South Korea would fall with the planned turnaround at Lotte Chemical’s plant in October and November, which will further tighten the supply.

Buying sentiment for spot cargoes was boosted by low inventory and restocking before China’s week-long National Day holiday in October.

Some buyers hesitate over procuring more, wary of a possible oversupply given high uncertainty on when the delayed cargoes would arrive.

“We did see some recovery from the downstream demand this September, but we are not sure whether it is sustainable” one downstream user said.

Some distributors are upbeat on the market amid tightened supply and the traditional peak season for downstream demand in September and October.

“We are still actively seeking offers for October-shipment cargoes, as we feel the supply in October will still be tight.” another distributor said.

Focus article by Bonnie Yin

($1 = CNY6.78)

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