china

Asian Styrene: Rises $7/mt to $1,083/mt CFR China, $1,043/mt FOB Korea

– Spot cargo availability limited elsewhere in Asia

– Styrene monomer production margin $90.80/mt

Asian styrene monomer extended its gains from Tuesday by $7/mt to $1,083/mt CFR China and $1,043/mt FOB Korea Tuesday on continuing optimism that fundamentals will improve from late March due to the scheduled turnarounds. Discussions were thin in the physical market. In the east China domestic market, prices rose from the start of the day, with the prompt marker assessed up Yuan 100/mt at Yuan 8,460/mt ex-tank. “Chinese market participants are hoping for a jump in prices to support the market, even though tank space is full,” said a Chinese trader. A source noted that while there were expectations that the high inventory in east China would ease this week, there is no progress yet. Spot cargoes availability, however, is limited elsewhere in Asia, in particular South Korea, Taiwan and Japan. Besides the stockpiles issue, the US-China trade negotiation remains as another concern in the market. In the feedstock markets, benzene fell $3/mt from Tuesday to $629/mt CFR China on the high inventory in China while ethylene dropped $20/mt from Tuesday to $1,130/mt CFR Northeast Asia Tuesday on softer demand from the SM market. This brings the SM production margin to $90.80/mt Tuesday, up $19.20/mt on the week but down $36.90/mt on the month. Operating rates of SM plants in China remain high with healthy demand from downstream plants, said market sources.

RATIONALE:

Asian SM was assessed up $7/mt from Tuesday at $1,083/mt CFR China and $1,043/mt FOB Korea Tuesday. The CFR China and FOB Korea SM markers currently take the average of the H1 and H2 April laycans. There were no transparent bids and offers during the  Market on Close assessment process on Tuesday. H1 and H2 April were assessed at $1,083/mt CFR China, tracking weaker sentiments in the east China domestic market in the afternoon. In the East China domestic market, the prompt marker was assessed at Yuan 8,460/mt ex-tank Tuesday, up Yuan 100/mt from Tuesday. On an import parity basis, this is approximately $1,066.40/mt. FOB Korea marker was assessed at $1,043/mt Tuesday, based on the pegged $40/mt spread to CFR China, while CFR Taiwan marker was assessed at $1,071/mt Tuesday, based on the pegged $12/mt spread to CFR China.

Asian phenol and acetone prices rose this week, supported by bullish sentiment in China

Asian phenol and acetone prices rose this week, supported by bullish sentiment in China as markets reopened after the Lunar New Year holidays and tight supply in India. Upstream benzene was assessed down $3.67/mt from Friday last week at $596.33/mt Friday, while propylene, another feedstock, was assessed up $10/mt over the same period at $925/mt FOB Korea.

PHENOL: CFR India phenol was assessed up $50/mt from Friday last week at $1,250/mt Friday amid plant issues in the Middle East, which left supply tight in South Asia. India’s domestic phenol market rose to Rupees 111/kg last week before paring back to Rupees 104/kg this week, market sources said. Multiple trades were heard concluded at $1,250/mt CFR India, equating to Rupees 100/kg. Several market participants were expecting sentiment to weaken going forward, saying prices had recently risen too much too fast. On the other hand, keen buyers were still heard in the market, with one buyer saying there were no ready sellers at $1,300/mt CFR India. Nonetheless, March material was still heard available and tradable indications continued to hover at $1,250/mt CFR India. East China domestic discussions supported the price of import material to China, with East China prices heard up Yuan 125/mt from Friday last week at Yuan 8,500/mt Friday, as sentiment was firm after the Lunar New Year holidays. However, the restart of a major phenol producer in China in January contributed to expectations of growing supply, as commercial sales from the plant should begin soon, sources said. Downstream products such as caprolactam and bisphenol-A were heard unable to support further increases in feedstock phenol prices, resulting in thin spot demand.

ACETONE: Despite thin trading in acetone delivered in Asia, market sources said prices had risen $10-$20/mt recently as producers were keen to seize on an open arbitrage between Asia and the US and Europe. Shipping sources said 5,000 mt of acetone was quoted from Yeosu in South Korea to Houston, while 2,000 mt was heard shipped from Singapore to Rotterdam at a rate of $95/mt. FOB Rotterdam acetone prices stood at $570/mt last Friday. This resulted in a pickup in demand for Asian material, and CFR China prices were assessed up $15/mt from Friday last week at $460/mt Friday, while CFR India was assessed up $5/mt over the same period at $505/mt.