Month: November 2018

Stabilizing Benzene Prices bringing Relief to Suppliers

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Benzene prices noticed stable to higher in the last couple of days which makes the market more stable and other chemicals prices also expected stable to the uptrend in coming days.

Benzene prices assessed around $710/mt CFR India.

Downstream aromatics prices noticed stable in Indian market on a day to day trading.

Toluene prices noticed at Rs 58000/mt at Ex-Kandla, Mix xylene noticed around 62000/mt Ex-Mumbai and styrene prices traded at Rs 87000/mt on Tuesday.

Asian benzene was assessed stable to higher from Monday despite the fall in upstream crude oil. The FOB Korea marker was assessed at $680/mt Tuesday, up$1.67/mt from Monday, while the CFR China marker was assessed flat at$713.50/mt Tuesday.

In the FOB Korea market, strong buying interests were heard for January cargoes while there were more offers heard for H2 December cargoes, however, no deals were heard concluded.

At 4:30 pm Singapore time(0830 GMT), ICE January Brent crude futures were down 48 cents/b (0.709%) from Monday’s settle at $67.21/b, while the NYMEX December light sweet crude contract fell 19 cents/b (0.331%) to $57.14/b.

In the East China domestic market, the benzene prices marker was assessed at Yuan 5,863/mt, up Yuan 10/mt from Monday. According to market sources, benzene inventories in China were recorded at 149,000 mt Tuesday, 13,000 mt higher on the week. As compared to the same period last year, inventories increased 3,000 mt.

The SM-benzene spread is flat from Monday at the 17-month low of $344/mt Tuesday, S&P Global CSG data showed. Elsewhere, in the US market, US November DDP spot benzene price was assessed up 4 cents on the day at 213.50 cents/gal DDP, down 34cents on the day, amid increased December activity.

RATIONALE: FOB Korea benzene was assessed up to $1.67/mt from Monday at $680/mt Tuesday. The marker currently takes the average of the third, fourth and fifth half-month laycans, H2 December, H1 January and H2 January.

During the CSG Market on Close assessment process on Tuesday, there were no transparent bids and offers seen.

The H2 December laycan was assessed at $670/mt FOB Korea, below the best offer heard at $671/mt with no bids heard. H1 and H2 January laycans were assessed at $685/mt, above the best bid heard at $684/mt with no offers heard.

The CFR China marker was assessed flat from Monday at $713.50/mt Tuesday, above the buying indication heard at $690/mt. The East China marker was assessed at Yuan 5,863/mt, with its import parity equivalent assessed at $715.65/mt.

Domestic Phenol Prices went down week on week

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Phenol prices showed continues downtrend in the Indian market and down Rs 2/kg from day to day to Rs 120/kg at Ex-Kandla. Phenol prices went on low trend due to poor demand in the domestic market which downward International prices.

“Prices also went down due to piling inventory at major ports of India.”- source.

Current ports prices noticed between Rs 120-121/kg  Booking price assessed between $1420-1425/mt CFR India down $10/mt.

Indian major producers have declined their prices as follows:

  • HOC – Rs 126/kg down by Rs 3/kg as on 15/11/2018
  • Deepak Phenolics- Rs 124/kg down Rs 8/kg as on 30th Oct’18
  • Herdilia- Rs 130/kg down Rs 10/kg as on 29th Oct’18.

International updates:

Sentiment in the phenol market turned bearish in the week to Thursday as feedstock benzene and propylene prices were weakening. Moreover, downstream markets such as polycarbonate and bisphenol-A also saw lukewarm buying interest, “BPA is about $1,300/mt now and if you subtract $300/mt for production costs, phenol prices should be around $1,000/mt CFR Northeast Asia,” a market source said.

CFR China phenol was assessed lower by $50/mt week on week at $1,400/mt, reflecting tradable indications heard at this level. Meanwhile, CFR Southeast Asia prices fell $20/mt to $1,350/mt, amid price declines heard in the other market. In India, tradable indications were heard at $1,500/mt CFR India, though buying interest was thin at this price. The CFR India market was assessed lower by $10/mt at $1,420/mt, in line with general price declines in the adjacent markets.

Toluene Prices Showed Downtrend in the Indian Market

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Toluene prices in India showed downtrend due to slow demand in the domestic market. Current toluene prices in the Indian market noticed around Rs 58/kg down by Rs 7/kg in last two weeks.

RIL  declined its manufactured toluene price by Rs 8.45/kg to Rs 57/kg.

Asia toluene was assessed up on the back of crude rise and in line with higher domestic price levels in China. Domestic toluene cargoes in China were heard sold at Yuan 6,150/mt, up Yuan 50/mt from Thursday, but down almost CNY 600/mt on week.

This was equivalent to $723.56/ mt on an import parity basis, sources said, after deducting CNY 100/mt for tank charges. ICE January Brent crude oil futures rose $1.10/b day on day but fell $3.93/bbl on the week to $67.69/b at 0830 GMT in Asian trade Friday.

Inventories were heard stable in China week on week, at 20,000 mt in the east and 6,000 mt in the south. However, buying interest was thin as market participants were largely adopting a wait-and-see approach.

Although upstream naphtha and crude oil futures regained some lost ground on Friday, it failed to bolster demand or sentiment in the weekly toluene market on the back of high inventories. Both producers and traders concurred they were unable to sell, as buyers held back purchases expecting prices to fall.

Rationale

The FOB Korea marker was assessed at $650.50/mt FOB Korea, up $1.50/mt day on day. The marker takes the average of the third and fourth half-month laycans, currently H2 December and H1 January.

During the CSG Market on the Close assessment process, no bids, offers or deals were seen. Earlier, a January bid was heard at $650/ mt FOB Korea, January was assessed at $651/mt FOB Korea while H2 December was assessed at $650/mt FOB Korea, changing the H2 December/January market structure from a backwardation to a contango.

The CFR China markers were assessed at $690.50/mt, up $1.50/mt in line with price gains in the domestic market.

 

Acetic acid prices showed mixed trend this week

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Acetic acid went down in the Indian market at the beginning of this week and traded between Rs 49-50/kg on Tuesday but on Saturday market recovered and quotation of the material up by the suppliers between Rs 50.5-51/kg.

“Acetic acid prices dropped on higher suppliers’ inventories. Supply is ample with slow downstream demand amid falls in feedstock methanol prices and the weak macroeconomic situation”- the source said.

Indian manufacturer of AA GNFC also reduced their prices on import parity by Rs 2.54/kg to Rs 52.25/kg as on 14/11/2018.

Current booking level assessed between $620-630/mt CFR India down $10-20/mt from previous assessments.
Demand in the Asian acetic acid market was flat in the week to Thursday as high methanol prices and flat demand in the downstream purified terephthalic acid market weighed on buying interest.

“AA supply could tighten next year as the market moves to the traditional turnaround period every two years but this year, supply is mostly balanced to short,” a market source said on the sidelines of the IMPCA conference held in Singapore over November 7-8.

Meanwhile, in the Asian vinyl acetate monomer market, downstream ethylene-vinyl acetate for the solar panel industry was weakening and that dampened buying interest for VAM after the Chinese government imposed some restrictions, a market source said. But this could not be confirmed.

Moreover, upstream ethylene prices were softening and VAM buyers expected further cuts in VAM prices in the coming weeks. The CFR Northeast Asia ethylene price was stable week on week at $920/mt Thursday, though prices have fallen sharply in the past few weeks.