SE Asia IPA rebounds as supply tightens; China cargoes limited

26 July 2018 04:37 Source:ICIS News

SINGAPORE (ICIS)--Southeast (SE) Asia’s isopropanol (IPA) prices have rebounded after nearly two months of steady decline, on tightening supply due to limited cargoes being exported by China.

China is a major supplier of IPA to the region.

“Demand is bearish ... But if Chinese players have sold out for August, international prices should increase,” said a southeast Asian trader.

In the week ended 20 July, spot prices were assessed at $905/tonne CFR (cost & freight) SE (southeast) Asia, up by $10/tonne from the previous week, according to ICIS data.

The assessment took into account deal for a propylene-based material done at $940/tonne CFR SE Asia.

Spot IPA prices had fallen by about 8.2% from end-May to $895/tonne CFR (cost & freight) SE (southeast) Asia on 13 July before staging a rebound, ICIS data showed.

Availability of Chinese material for August shipping was limited at $880/tonne CFR SE Asia, while initial offers for September cargoes were at $900/tonne CFR SE Asia.

“With tight domestic supply, I don’t have any export cargoes for August shipping. I even had to delay my export contracts from H1 August to H2 August/H1 September loading,” a Chinese producer said.

In China, most propylene-based IPA plants were forced to close, with the remaining few running at reduced rates due to production losses being incurred because of high feedstock cost.

ICIS Editorial Chart goes here

IPA buyers were also preferring cheaper acetone-based material.

Coupled with a delayed plant restart of one of China’s largest IPA exporters, Chinese supply was tightened, with a handful of suppliers burdened with the whole country’s demand.

Yancheng Super Chemical’s 150,000 tonne/year IPA plant in Jiangsu has remained shut since 30 May. The plant was scheduled to resume operations in the weekend of 21-22 July, but the restart was further delayed on environmental issues, a company source said.

Domestic IPA prices in China have been rising because of limited supply despite a seasonal lull in demand, with end-users just buying on a need-to basis.

On 24 July, a supplier was able to sell a cargo at Chinese yuan (CNY) 7,200/tonne ex-tank, compared with CNY7,050-7,100/tonne ex-tank in the previous day, market sources said.

Focus article by Yuanlin Koh

($ 1= CNY6.77)

Picture: Make-up. Isopropanol (IPA) is a solvent used in many industrial and consumer products and as an extractant. Applications include cosmetics, personal care products, de-icers, paints and resins, pharmaceuticals and inks and adhesives. (Source: PhotoAlto/REX/Shutterstock)

By Yuanlin Koh