Month: February 2019

Asian Oxo Alcohols: SEA DOP market up $50/mt on week as buying perks up

– Nan Ya to postpone restart of 2-EH unit to Mar 10
– Nan Ya to delay No.3 PA lines restart to May
The dioctyl phthalate market strengthened this week amid the return of buyers in China and Southeast Asia. “We see many buyers coming back to restock after the Lunar New Year,” said a Korean trader who sold four spot cargoes to Southeast Asian buyers this week. The CFR DOP Southeast Asia marker moved up $50/mt over the period to $1,260/mt, based on five spot trades totaling over 800 mt. Sentiment was also bullish in the 2-ethyl hexanol market as a delay in the restart of a major 2-EH plant led to tight spot supply. Sellers said that the price will move up after buyers step up their restocking. Taiwan’s Nan Ya Plastics will postpone the restart of its 2-ethyl hexanol unit to March 10 — a delay of nine days — after it was shut down unexpectedly on February 12 due to a technical issue, a company source said Friday. The 2-EH unit is located at Mailiao and has a production capacity of 205,000 mt/year. The unit was earlier scheduled to restart on March 1. “This is an unexpected shutdown. So, we need more time to deal with the technical issue. We are delaying restart of the plant to March 10,” said the company source. Nan Ya Plastics is the largest 2-EH producer in Taiwan. Phthalic anhydride supply is also reported tight in the spot market. Also, Nan Ya Plastics will delay the restart of its No. 3 phthalic anhydride (PA) lines from end February to early May. Nan Ya owns and operates four PA lines in Mailiao, each with a capacity of 60,000 mt/year, and an annual output capacity of 240,000 mt/year. Nan Ya shut down No. 1 and No.3 PA units last year and in January this year, respectively. “We initially plan to restart No. 3 PA unit by end February, but given the tight OX feedstock, the No. 3 PA unit will be under maintenance in early April and restart in early May instead,” the company source said. Nan Ya Plastics is the largest PA producer in Taiwan.
RATIONALE:
Dioctyl phthalate was assessed up $10/mt week on week at $1,045/mt CFR China Friday, based on a trade concluded at $1,045/mt CFR China. The CFR Southeast Asia marker was assessed up $50/mt over the same period at $1,260/mt, based on five spot trades totaling over 800 mt in the range of $1,240-$1,270/mt CFR SEA. Phthalic anhydride was assessed up $5/mt on week at $875/mt CFR China, as price discussions were heard at around $870-$880/mt CFR China. The CFR SEA marker was assessed unchanged on week at $970/mt CFR SEA, based on three spot trades concluded at $950-$980/mt CFR SEA. 2-EH was assessed unchanged on the week at $1,045/mt CFR China, below selling indications heard at $1,080/mt CFR China, and price discussions for 2-EH stood at $1,045/mt CFR China. The Southeast Asia marker was assessed unchanged on week at $1,085/mt as price discussions were heard at $1,085/mt CFR SEA. Normal butanol was assessed unchanged on week at $910/mt CFR China and CFR Southeast Asia on muted trading.

Asian CPL: Rose $50/mt on week amid firm demand

– Caprolactam operating rate hits 81% in China
– Market direction seems positive amid peak season
Asian caprolactam prices rose week on week on firm demand. Previously in December and January markets were weak so most downstream producers’ demand was low and ended up with low inventories but now they have emerged with buying needs post Lunar New Year Year holidays. The overall operating rate of caprolactam and nylon sectors in China were heard at around 81% and 88% of total capacity respectively. Meanwhile, the downstream textile operation rate was hovering around 30%. The market is anticipating a return to full force post Chinese Lantern Festival Friday. Chinese domestic prompt caprolactam price soared to Yuan 13,800/mt ex-works Friday, up almost Yuan 1,000/mt from end-January, a source said. Trade participants took a bullish market view for the coming weeks amid the traditional peak season from February to April. “Even though the US-China trade discussions have not been finalized, the direction seems positive,” a source said.

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dummy-man

RATIONALE:

CFR FE Asia Caprolactam price was assessed up $50/mt week on week at $1,700/mt on Friday, reflecting tradable discussion heard at this level. CFR SE Asia Caprolactam marker was assessed up $50/mt at $1,680/mt over the same period, reflecting tradable discussion heard at this level

NWE MTBE/ETBE – Ratio to Eurobob firm on muted activity

– MTBE factor flat at 1.154
– Absence of buying interest
The European MTBE market was mostly quiet Friday, according to sources, maintaining a steady relationship to Eurobob gasoline. The MTBE factor, the ratio of MTBE to Eurobob gasoline, was assessed flat on the day at 1.154 Friday. A prompt offer was left outstanding during the Market on Close assessment process and no product was heard changing hands, market participants said. There were mixed views on the demand side. A broker said Friday that there was little stock on offer but that buying had dropped off sharply. Friday’s lower factor had limited affect on buying appetite, a blender said. MTBE’s outright price increase came on the back of an uptick in crude, with the ICE Brent London 16:30 assessment at $67.10/b Friday, up from $66.95/b Friday. In Asia, MTBE was assessed up $10/mt on the day at $647/mt FOB Singapore Friday, largely tracking 92 RON, while the Asian MTBE factor rose to 1.140 from 1.139 Friday.
RATIONALE:
S&P Global assessed the European MTBE factor at 1.154 Friday, unchanged from Friday. An outstanding offer made by Finco during the Market on Close assessment process at $660/mt for front-end loading did not disprove the existing factor. The ETBE premium over MTBE was assessed stable at $213.25/mt, with no disproving indications.

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US MTBE: Differential to Northwest Europe moves into premium

– Last heard spot deal heard at FOB ARA plus 4-5
– Asian, European MTBE firm on day
Spot Gulf Coast MTBE’s discount to Northwest Europe reversed into a premium Friday on the back of the last heard spot deal. After nearly three weeks of being seen at a discount to the FOB ARA marker, FOB USG was assessed at a 4-cent premium. A spot deal was heard done at an equivalent of a 4- to 5-cent premium to Northwest Europe, a level later confirmed notionally by a separate market participant. A notional offer was then talked early-afternoon at 5 cents over Northwest Europe. No activity was seen in the Market on Close assessment process. In related energy, NYMEX March RBOB was up 1.63 cents on the day. Blended and shipped values were last estimated at near 223 cents/gal while the MTBE factor relative to gasoline was at 1.1591. In other regions, the
FOB Singapore marker was up $10/mt to $647/mt while the FOB ARA marker was up 2.04 cents/gal to 183.81 cents/gal.
RATIONALE:
Spot USG MTBE was assessed Friday at 187.81 cents/gal FOB USG, up 7.21 cents on the day. The differential to the FOB ARA marker moved up to a 4-cent premium, based on the last heard spot deal at an equivalent 4-5-cent premium. *Daily prices can be found on PCA 205.

Asian MTBE: Rises $10/mt tracking 92 RON gasoline higher

– Gasoline fundamentals improve
– 92 RON-Brent spread flips to positive
Asian MTBE prices rose $10/mt to $647/mt FOB Singapore Friday, largely tracking 92 RON gasoline prices higher in thin trade. There were no bids or offers during the Market on Close assessment process. Tradable indications on a CFR Singapore basis were heard at a $10-$15/mt premium to FOB Singapore. “Chinese firms are buying,” one producer source said. The MTBE factor, which measures the ratio between the daily assessments for FOB Singapore MTBE and Mean of Singapore 92 RON gasoline, edged up to 1.140 from 1.139 on Friday. Gasoline fundamentals improved Friday, with the 92 RON-Brent crack rising 23 cents/b to 12 cents/b, reversing the negative spread seen since last Friday. Inter-RON gasoline spreads widened from the day before, with 95/92 RON at $1.69/b, 97/92 at $3.24/b and 97/95 RON at $1.55/b. Flat prices for 92 RON, 95 RON and 97 RON rose to $67.16/b, $68.85/b and $70.40/b respectively. Naphtha was up 47 cents/b on the day at $58.73/b FOB Singapore. The 92 RON-FOB Singapore naphtha spread, which can indicate the viability of using MTBE as a blend component, rose to $8.43/b from $7.94/b the day before, while the MTBE-naphtha crack rose $6/mt over the same period to $150.73/mt.
RATIONALE:
MTBE was assessed up $10/mt day on day at $647/mt FOB Singapore Friday, largely tracking the 92 RON higher in thin trade. The MTBE factor rose to 1.140 from 1.139 day before. There were no bids or offers during the Market on Close assessment process. The H1 March, H2 March and H1 April laycans were each assessed at $647/mt FOB, maintaining a flat structure.

Asian EDC/VCM: SE Asia EDC/VCM firmer amid tight supply

– FE Asia stable amid stable offers for Mar PVC
– VCM supply tightens on Asahimas outage
EDC: Asian ethylene dichloride was assessed stable to $15/mt higher week on week Friday. While an additional 5,000-10,000 mt of spot supply would be available every month from March in Far East Asia, the EDC market would likely remain tight due to limited deepsea supply from the US, market sources said. On Friday, the FOB USG EDC price was assessed unchanged week on week at $340/mt, S&P Global data showed. Related caustic soda market was firm as well, rising $27/mt week on week to be assessed at $357/mt FOB Northeast Asia Friday, data showed. VCM: Asian vinyl chloride monomer was assessed unchanged to $10/mt higher week on week Friday. In Far East Asia, trade activities were limited as buying and selling indications were wide apart. PVC producers were reluctant to buy spot VCM actively as fresh PVC offers announced for March were stable from February. PVC demand was heard as bearish for March, which also limited buying interest for VCM. On the other hand, supply of VCM in Far East Asia was seen as tight for March during the VCM plant turnaround season. Market sources said currently, supply in the Southeast Asian market is tighter than Far East Asia because of plant hiccups. Indonesia’s Asahimas Chemical has been running its 250,000 mt/year No. 2 VCM unit at Anyer below 50% since early this week due to mechanical issues, a company source said Friday. It is unclear when the plant will start operating at full capacity, he added. The company also plans to shut its 400,000 mt/year No. 3 VCM unit at the same location from the beginning of March for around three weeks of annual maintenance, the source said. No spot offers were heard on a CFR Southeast Asia basis due to limited supplies. In related statistics news, Japan’s VCM production in January fell 4.3% from a month earlier to 235,426 mt, the Vinyl Environmental Council, or VEC, said in a statement Friday. Japan’s VCM exports also fell 2% to 74,019 mt during the same period, it noted.
RATIONALE:
EDC: The CFR Far East Asia price assessed stable week on week at $410/mt Friday, with a tradable level heard at $410/mt CFR Far East Asia. The CFR Southeast Asia price rose $15/mt week on week to be assessed at $420/mt, below an offer at $430/mt CFR Southeast Asia. VCM: The CFR Far East Asia price was assessed unchanged week on week at $725/mt Friday. A buying idea was heard at $710-$720/mt CFR Far East Asia against a sell idea at $770/mt CFR Far East Asia. A tradable level was heard in a range of $720-$730/mt CFR Far East Asia. The CFR Southeast Asia VCM price rose $10/mt to $750/mt during the same period, reflecting firmer sentiment amid tight supply.

The CFR China propylene market remained stable

The CFR China propylene market remained stable Friday in thin trade, but some participants were expecting activity to pick up next week on restocking by Chinese buyers. The Shandong propylene price was down Yuan 50/mt on the day at Yuan 7,550/mt, while the East China domestic price remained stable over the same period at Yuan 7,600/ mt. “Downstream polypropylene has not been faring well this week, so sellers are lowering offers to entice buying,” said a Chinese producer who sells propylene in Shandong. Other sources were bullish about an uptick in demand for imported propylene as some Chinese end-users were low on inventory and would need to restock soon. However, buying interest for propylene was reportedly weaker in Taiwan this week. A buyer in Taiwan said a local producer had surplus supply to sell to term customers, rendering imports unnecessary. In plant news, South Korea’s LG Chem plans to shut its naphtha-fed steam cracker in Daesan for scheduled maintenance and debottlenecking on March 5, a company source said Friday. In addition to the maintenance, it will raise the ethylene production capacity at its Daesan steam cracker by 230,000 mt/year, taking its total ethylene capacity to around 1.3 million mt/year. Its propylene capacity will increase by 115,000 mt/year to around 615,000 mt/year. Rationale Propylene was assessed unchanged day on day at $945/mt CFR China Friday, below a selling indication at $960/mt CFR China. Price discussion was heard around $940-$950/mt CFR China. The FOB Korea marker was assessed unchanged over the same period at $920/mt, below a selling indication at $950/mt FOB Korea and above a buying indication heard at $910/mt FOB Korea. The CFR Taiwan marker was assessed up $10/mt week on week at $940/mt, as price discussion was around that level. The CFR Southeast Asia marker was assessed up $15/mt on the week at $865/mt, with discussions heard at that level. The FOB Japan marker was assessed up $10/mt on the week at $905/mt on stronger adjacent markets. In China, the Shandong domestic price was assessed down Yuan
50/mt on the day at Yuan 7,550/mt as discussions were heard around that level, while the East China price was assessed unchanged on the day at Yuan 7,600/mt and heard tradable at that level.

Take Decisions Based on Data
Take Decisions Based on Data

Asian monoethylene glycol prices edged $2/mt higher day on day

Asian monoethylene glycol prices edged $2/mt higher day on day, supported by the firmness in the Dalian Commodity Exchange. The most actively trade June futures contract on DCE closed Yuan 27/mt higher than Thursday at Yuan 5,142/mt Friday. MEG supply a hit record high of around 1.191 million mt at eastern ports of China. It would take some weeks to clear the inventories despite the expected rising polyester demand and the recent news of MEG plants shutdown in Taiwan and South Korea, sources said. Cash flow remained generally positive for coal-based MEG producers in China, though many would be facing losses if depreciation cost was included, sources said. “Demand for coal-based MEG is still good, there is no production cut plan heard from major coal-based MEG producers despite squeezed margin,” a MEG consumer said. The margin of Asian Naphtha-based MEG, ethylene-based MEG and coal-based MEG were calculated to be averaged minus $2/mt and minus $271/mt and minus $18/mt respectively this week. Market sources were eying on the startup of Petronas’ new 740,000 kt/year MEG unit at Malaysia. Considering the environment of high ethylene price and poor MEG profits, market sources were unsure if the plant would indeed start up. In other plant new, South Korea’s Lotte Chemical has reduced MEG and maximized ethylene oxide production instead for its both plants at Daesan and Yeosu with total capacity of around 1.1 million mt/year, amid negativemargin of naphtha-based MEG, sources close to the company said. There is no change in the company’s initial plan of shutting its 120,000 mt/year No. 2 MEG line at Yeosu for catalyst change-out for around 19 days, starting from end March, as Platts reported earlier. Thailand’s TOC Glycol Co. Ltd., or TOCGC, a subsidiary of PTT Global Chemical PLC, plans to restart its 395,000 mt/year MEG plant at Map Ta Phut in the first week of March after a five-week planned maintenance since early February, a company source said. Rationale CFR China MEG price was assessed up $2/mt on day at $610/mt on Friday for 15-30 days forward cargoes, reflecting tradable discussion heard at this level, below offer heard at $615/mt and above bid heard at $608/mt. The Chinese domestic price was assessed up Yuan 27/mt at Yuan 4,980/mt over the same period, reflecting tradable discussions heard at Yuan 4,950-5,010/mt. CFR Southeast Asia MEG was assessed down $3/mt week on week at $615/mt on Friday for 15-30 days forward cargoes amid thin trade discussion, reflecting the spread heard at $5/ mt higher than CFR China marker.

Asian ethylene was assessed stable day on day

Asian ethylene was assessed stable day on day Friday. From a week earlier, spot prices inched up $5/mt. Asian ethylene started firmer this week, with a deal heard to have been done at $1,200/mt CFR Northeast Asia earlier this week. After the spot price hit the four-month high, the price increase has stalled amid narrowing margins for downstream production. Asian styrene monomer margin narrowed to around $50- $60/mt this week compared to $120-$140/mt earlier this month, S&P Global Platts data showed. Monoethylene glycol margin has been hovering at around minus $260/mt this week, according to Platts data. Taiwan’s ethylene demand is also seen to be bearish as Taiwan’s CPC currently shut its ethylene pipeline in Kaohsiung until end of March. The pipeline, which connects its offshore tank and its downstream customers, was closed since Monday due to maintenance work. There are several ethylene pipelines in Kaohsiung connecting CPC and its downstream customers. Another pipeline is due to be closed from the middle of April to end May for maintenance. In Southeast Asia, downstream plant hiccups in Indonesia also weakened ethylene demand. Indonesia’s Asahimas has reduced its operations at its 250,000 mt/year No. 2 vinyl chloride monomer unit in Anyer below 50% due to some mechanical problems. It is unclear when Asahimas will be able to start full operations again. The company also plans to shut its 400,000 mt/year No. 3 VCM unit at the same location from the beginning of March for around three weeks of annual maintenance. “The market sentiment started weakening this week. But spot discussions (on fixed price basis) were very thin. Players prefer to trade on a formula basis,” a market source said. Some market sources said there are deepsea cargoes available in the market. But it is still unclear if deepsea supplies from Europe will return fully. Italy’s Versalis complex in Priolo has been seized Thursday as part of an investigation, due to concerns the emission of polluting material, Platts reported previously. The cracker, with 490,000 mt/year ethylene capacity, was shut on January 10 after the fire. In related statistics news, the average operating rate of Japan’s naphtha-fed steam crackers in January stood at 98.4% compared with 97.4% from a month ago, and 98.9% a year ago, the Japan Petrochemical Industry Association said in a statement late Thursday. Rationale The CFR Northeast Asia ethylene price was assessed unchanged day on day at $1,200/mt Friday. A buying idea was heard below $1,200/mt CFR NE Asia versus an offer at $1,250/mt CFR NE Asia. Meanwhile, the CFR Southeast Asia ethylene price was also stable at $1,080/mt during the same period, with no fresh bids and offers were heard.

The China methanol market was assessed stable Friday on thin trade.

The China methanol market was assessed stable Friday on thin trade. Week on week, ample supply from China hurt prices. The most active May contract on Zhengzhou Commodity Exchange settled Yuan 7/mt higher at Yuan 2,522/mt Friday. This, however, was not a significant change, said most market players. Inventories in China were
heard high, and most buyers were not keen to import methanol, preferring instead to purchase domestically. Meanwhile, inventories outside of China was described as low. Some traders were also in discussions to re-export cargoes to Southeast Asia, given that the arbitrage was wide open with the China-Southeast Asia freight differential at $50/mt. In South Korea, demand was heard healthy from the formaldehyde, MTBE and fuel-blending sectors. In China, talk of an Iranian cargo being discussed at $275/mt CFR China was heard, but could not be confirmed. A number of trade participants in China and India said a new Iranian methanol producer with a production capacity of around 2 million mt/year was starting up, but this could not be confirmed. There were also shutdowns in the Middle East and Southeast Asia that should balance supply, the sources said. In plant news, Brunei Methanol Company will shut its 850,000 mt/year plant in Sungai Liang Industrial Park in early March for 55 days of scheduled maintenance, a source close to the company said. Malaysian Petronas Chemicals’ 1.7 million mt/year No.2 methanol plant in Labuan is currently operating at 50% capacity due to a technical issue, company sources said. Rationale Methanol was assessed stable day on day at $285/mt CFR China Friday for cargoes delivered 20-50 days forward in between a deal and a bid. A buying idea was heard as high as $295/mt CFR China for openorigin cargo, while a deal was heard at $275/mt CFR. Domestic China parcels traded at Yuan 2,400/mt ex-tank, down Yuan 50/mt on the day. The CFR Southeast Asia marker was assessed up $1/mt on the day at $336/mt, above a bid at $335/mt CFR SE Asia. The CFR Korea marker was assessed $7/mt higher week on week at $326/mt, above a buy idea at $325/mt CFR, and similarly reflecting a trade at $327/mt CFR Korea, which was normalized down to $326/mt CFR as it was a small parcel size. The CFR Taiwan marker was assessed down $3/mt week on week at $306/mt, above a bid at $300-$305/mt CFR.

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