TDI Chemical Price in India

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.

Mixed views on impact of high inventories in China.

A lack of clarity continued to shroud the Asian benzene market Friday as dwindling demand continued to widen the spread between March and April. The H1 March/H2 March and H2 March/April spreads had been volatile since laycan declarations for March cargoes concluded Friday. The H1 March/H2 March spread stood at minus $5/mt Friday, from minus $7/mt Friday. H2 March/April was valued at minus $11/mt Friday, from minus $7.50/mt Friday. A trader noted that the Asian benzene market had been in a persistent contango for “quite some time,” as the market is structurally long while producers seek outlets beyond Asia in the US and Europe. Buying from China, the key demand center within Asia, had come to a standstill Friday, amid high inventories and a volatile yuan currency relative to the US dollar. Market sources said that East China inventory levels, defined as the sum of benzene, toluene, xylene, styrene and monoethylene glycol stocks, had hit an all-time high of more than 3 million mt. As a result, traders were heard not keen to import cargoes. Furthermore, several traders were heard turning away from the CFR China market to the FOB Korea market to sell April cargoes. A trader likened growing East China inventory to a “bubble,” with prices bound to fall quickly should bearish fundamentals arise. On the other hand, another source said that it was unlikely to occur in the benzene market, with benzene prices “still quite low,” while CFR China prices were more than sufficient to account for freight between South Korea and East China. CFR China was assessed at $611/mt Friday, $15/mt above the FOB Korea benchmark, which stood at $596/mt.

RATIONALE:

FOB Korea benzene was assessed higher by $3.83/mt on the day at $596/mt Friday. The marker takes the average of the third, fourth and fifth half-month laycans, currently H1 March, H2 March and H1 April. During the CSG Market on Close assessment process, there were no transparent bids and offers seen. The H1 March laycan was assessed at $589/mt FOB Korea, above a bid last seen at $588/mt FOB Korea. The H2 March laycan was assessed at $594/mt FOB Korea, below an offer last seen at $595/mt FOB Korea, and above a bid at $590/mt. The H1 April laycan was assessed at $605/mt FOB Korea, above a bid last seen at $604/mt. The CFR China marker was assessed higher by $3/mt day on day at $611/mt, above buy indications heard for March and April at $610/mt CFR China. The East China marker was assessed at Yuan 4,873/mt Friday, up Yuan 3/mt day on day, or $607.99/mt on an import parity basis.

Falls $12/mt on bids and offers

Asian toluene prices tumbled $12/mt over the weekend to settle at $595/mt FOB Korea and $629/mt CFR China on Tuesday amid bids and offers heard during the CSG Market on Close assessment process, though no transparent bids or offers were observed. During the CSG MOC Tuesday, a 2,000 mt bid for any March was heard at $615/mt CFR China, which was eventually brought up to $619/mt at the close. On offers, an offer for a 2,000 mt any March delivery was heard at $640/mt CFR China which was brought down to $632/mt CFR China and left standing at the close. During the CSG MOC, a bid was also heard at $625/mt CFR China for 2,000 mt, H2 February to any March delivery but CSG could not verify the buyer despite attempts to. Similarly, an offer at $610/mt FOB Korea for 2,000 mt, H1 March laycan was also heard during the MOC but the seller chose to remain unverified by CSG. Meanwhile, the Chinese market showed some activity although not all market participants were back from the Chinese New Year holidays, sources said. The East China prompt, ex-tank prices was heard discussed at around Yuan 5,000/mt to Yuan 5,100/mt in the morning, and fell slightly to Yuan 5,000/mt to Yuan 5,060/mt towards the end of the day. For those who have returned to the market, many were sidelined. “The first day after holiday, so many things need to talk, moreover the factories are mostly starting in a few days time”, a Chinese trader said Tuesday. “We have not started work yet” another toluene end-user from China said Tuesday. Meanwhile, other toluene end-users in the paint industries in East China were also heard to have accumulated enough cargoes before the Chinese New Year and are not looking to buy. “They told me they are in no rush to buy MX and toluene, with their current inventories enough to last for about a month”, a Chinese toluene trader said Tuesday.

RATIONALE:

The FOB Korea marker was assessed at $595/mt FOB Korea Tuesday, down $12/mt from Tuesday largely tracking the CFR China marker. The marker takes the average of the third and fourth half-month laycans, currently H1 and H2 March. The CFR China marker was assessed at $629/mt, between the best bid heard at $619/mt CFR China, and best offer heard at $632/mt CFR China, both for 2,000 mt any March laycan, but no transparent bids or offers were seen during the MOC process Tuesday. The H1 March and H2 March laycans were assessed at $629/mt CFR China Tuesday, maintaining a flat market structure from Tuesday.

S&P Global CSG assessed benzene for delivery 5-30 days forward at $591/mt

 

S&P Global CSG assessed benzene for delivery 5-30 days forward at $591/mt Tuesday, up $2/mt from Tuesday’s assessment. Market participants described the benzene market as quiet Tuesday, with one source saying that he had seen “very few” prices indicated on the market. Another source added that “the period after Chinese New Year was supposed to give some direction to the market, but I haven’t seen anything for now.” In addition to muted market activity, a third source said that no benzene trades were conducted Tuesday, although buying activity on the downstream styrene market picked up. Furthermore, the benzene market saw outstanding bids and no offers, with a fourth source commenting that, in his opinion, this was the result of “a thin market and expectations that prices have to recover.” Meanwhile, sources said that the benzene market remained long. The benzene-naphtha spread was seen at $116/mt Tuesday, down from $127.50/mt Tuesday, indicating the persistence of significant supplies of benzene in the market. Upstream, on the crude oil market, the 1630 GMT ICE Brent crude oil futures assessment fell to $61.28/b Tuesday from $61.74/b Tuesday.

RATIONALE:

S&P Global CSG assessed benzene for delivery 5-30 days forward at $591/mt CIF ARA Tuesday, up $2/mt from Tuesday’s assessment. February was assessed at $586/mt, up $1/mt day-on-day, above the most competitive bid of $585/mt. March was assessed up $1/mt from Tuesday’s assessment at $596/mt, above the most competitive bid of $595/mt and based on a stable February-March contango of $10/mt. April was assessed up $1/mt on the day at $606/mt, above the most competitive bid of $600/mt and based on a stable March-April contango of $10/mt. May and June were assessed flat to April. FOB was assessed at $591/mt, flat to CIF.

toluene price updates
toluene price updates

Acetic acid and VAM market update

Asian acetic markets were steady this week, and had yet to catch up with upstream methanol markets, which have firmed over the past two weeks oversupply issues. A stronger Chinese yuan lent support to China’s domestic and FOB prices in the past month. As such, domestic prices this week were little changed from last week, at around Yuan 3,150/mt Friday, up Yuan 50/mt on week. The Chinese yuan has risen 3.3% since October on optimism that the US-China trade tensions will ease, and the two major economies could reach a trade deal soon. Meanwhile, demand for acetic acid across Northeast Asia, Southeast Asia and South Asia was stable amid ample supplies. “We have to wait for real market direction after the Lunar New Year,” a trader said.

VAM: Upstream ethylene prices have firmed considerably over the past nine weeks, and ethylene-based vinyl acetate monomer producers were feeling the pinch to raise prices, trade sources said. The CFR Northeast Asia ethylene marker was assessed at $1,075/mt Friday, up $35/mt from Thursday, and was last higher at $1,090/mt CFR on October 19,   data showed. Trade sources said they expect Asian VAM markets to become tighter after the Lunar New Year holidays, as producers prioritize shipments to Europe, as the first non-EU 350,000 mt imports enjoy tax concessions. RATIONALE: AA: The CFR Far East Asia and the Southeast Asia AA markers were both unchanged from last week at $445/mt CFR, based on stable market fundamentals. The FOB China price was up $2/mt at $401/mt, against buying indications hear around $395/mt FOB, and discussions at $400-$405/mt FOB. The CFR South Asia marker was assessed at $435/mt, unchanged from last Friday, against offers heard at $430-$440/mt CFR India. VAM: CFR China was assessed at $930/mt Friday, stable from last Friday, amid thin trading. The CFR Southeast Asia and CFR South Asia prices were unchanged week on week at $895/mt and $830/mt, respectively, amid stable market fundamentals.

US MTBE prices went down

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Spot USG MTBE pricing slipped for the third consecutive session Friday amid sustained weakness in its Northwest European counterpart. With the premium to the FOB ARA marker unchanged at 10 cents, spot pricing followed Europe down 1.69 cents on the day. No activity was seen in the Platts Market on Close assessment process and spot trading activity was limited. Related energy was slightly stronger on the day, inching up 19 points to $1.3876/gal. Blended and shipped values were last estimated near 203 cents/gal while the MTBE factor relative to gasoline was at 1.1987. In other regions, the FOB Singapore marker was down $13/mt to $561/mt while the FOB ARA marker was 1.69 cents weaker at 156.44 cents/gal.  RATIONALE: Spot USG MTBE was assessed Friday at 166.44 cents/gal FOB USG, down 1.69 cents on the day. The assessment was based on a 10-cent premium to ARA, where the netback was last talked.