China February petrochemical market extends surge in February on continuous tight supply, US outages

Author: Yvonne Shi

2021/03/11

SINGAPORE (ICIS)--China’s petrochemical markets surged again in February on continuous tight supply and recovering post-holiday demand, further fuelled by US outages as a result of a cold wave.

The ICIS China Price Index rose 22% to 1331.59 on 26 February compared with the end of January. Out of 17 components comprising the index, n-butanol, acrylate esters and 2-EH topped the list with over 50% growth month on month.

The restocking-driven price increase continued after a short break for the Chinese Lunar New Year holiday, as the government called for travel curbs to control the spread of the COVID-19 pandemic.

With tight supply amid concerns about fierce global shortages, the market went up quickly after the holiday.

China future’s markets reacted actively toward the changes upon post-holiday reopening, with increased expectations of global inflation also boosting spot markets.

According to market sources, China’s shortage of chemical supplies will continue for a while, with reduced imports amid worldwide scarce availability.

Downstream buyers tend to be cautious when feedstock prices are this high.

In the second week of March, China’s petrochemical prices started to retreat in response to a falling futures market and resistance from downstream buyers.