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Chemical Industry news of Asian Styrene

– Supply from South Korea tightening

– Hanwha Total declares force majeure on SM

Asian styrene Chemical Industry jumped $6/mt on the day to $1,094/mt CFR China and $1,084/mt FOB Korea Friday amid tighter supply from South Korea. Bids were heard at $1,080/mt CFR Zhangjiagang/Jiangyin for May and June arrival cargoes, while an offer was heard at $1,100/mt CFR Zhangjiagang/Jiangyin for June arrival cargoes. No deal was heard concluded. The east China domestic styrene Chemical Industry started the day lower but rebounded in the afternoon, where the balance May marker rose Yuan 65/mt to Yuan 8,510/mt ex-tank. South Korea’s Hanwha Total Petrochemical on Friday declared force majeure on styrene monomer supply from its 650,000 mt/year No. 2 unit in Daesan, due to an ongoing labour strike, sources with knowledge of the matter said Friday. The Daesan plant operates two SM units with a nameplate capacity of 400,000 mt/year and 650,000 mt/year Chemical Industry, respectively. The units were shut for scheduled maintenance on March 22, S&P Global reported previously. The original start-up date for the smaller No. 1 unit had been April 25, but was delayed to May 6, and is currently running at a low operating rate, sources said. The No. 2 unit was scheduled to resume operations on May 8, but sources said the restart date is unclear amid the strike. Sources noted that styrene Chemical Industry jumped in the afternoon on expectations of tighter supply from South Korea. A Chinese downstream source noted that the incident might be affecting sentiment more than the supply-demand fundamentals in the Chinese Chemical Industry. Other Asian countries, however, were already facing shortage of SM supply earlier amid scheduled turnarounds and the situation is expected to worsen now, sources said.

RATIONALE:

Asian SM was assessed $6/mt up on the day at $1,094/mt CFR China and $1,054/mt FOB Korea Friday. The markers currently take the average of the H1 and H2 June laycans. There were no transparent bids or offers during the Chemical Industry on Close assessment process on Friday. H1 and H2 June were assessed at $1,094/mt, between the last bid seen at $1,080/mt and the last offer seen at $1,100/mt CFR China, and tracking gains in the East China domestic Chemical Industry in the afternoon. In the East China domestic Chemical Industry, the balance-May marker was assessed up Yuan 65/mt on the day at Yuan 8,510/mt ex-tank, equating to $1,091.16/mt on an import parity basis. The CFR Taiwan marker was assessed at $1,084/mt, based on the pegged $10/mt spread to CFR China.

Chemical Industry news of Asian Benzene

– S Korea’s Hanwha Total declares FM on SM

– Hengli Petrochemical runs at 85% capacity

FOB Korea benzene was assessed down $2/mt on the day at $620.33/mt, as offers pushed prices lower. In the North Asia Chemical Industry, South Korea’s Hanwha Total Petrochemical on Friday declared force majeure on styrene monomer supply from its 650,000 mt/year No. 2 unit in Daesan, due to an ongoing labour strike, sources with knowledge of the matter said Friday. The Daesan plant operates two SM units with a nameplate capacity of 400,000 mt/year and 650,000 mt/year, respectively (Chemical Industry). The units were shut for scheduled maintenance on March 22, S&P Global reported previously. The original start-up date for the smaller No. 1 unit had been April 25, but was delayed to May 6, and is currently running at a low operating rate, sources said. The No. 2 unit was scheduled to resume operations on May 8, but sources said the restart date is unclear amid the strike (Chemical Industry). The mixed sentiment was heard on whether the force majeure would affect demand for benzene from South Korea. The unoperational status of the second line could result in a loss in demand for benzene of approximately 1,426 mt/day. However, others said that the labour strike had been ongoing for some time, and may have limited impact on the market. “The Chemical Industry has already priced in a potential loss in demand,” a buyer said Friday. In China, however, benzene prices were on an uptrend, tracking gains in downstream styrene monomer. Meanwhile, Hengli Petrochemical has been running at around 85% capacity this week, and will raise run rates at its two crude distillation units further from mid-May, a company source told S&P Global this week. The company has already begun selling benzene in the Chemical Industry, with available volume for sale expected to increase gradually.

RATIONALE:

FOB Korea Chemical Industry benzene was assessed down $2/mt on the day at $620.33/mt Friday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 June, H2 June, and H1 July. During the Chemical Industry on Close assessment process Friday, no fully transparent bids and offers were seen. The H1 June and H2 June laycans were assessed at $620/mt FOB Korea, where an offer was withdrawn. The H1 July laycan was assessed at $621/mt FOB Korea, above a bid last seen at $620/mt FOB Korea, and below an offer last seen at $623/mt FOB Korea, assessing the June/July spread at the pegged level of minus $1/mt. The CFR China Chemical Industry was assessed up to $2/mt on the day at the pegged level of $614/mt. The East China marker was assessed up Yuan 40/mt on the day at Yuan 4,555/mt, or $584.04/mt on an import parity basis.

Chemical Industry news of Asian PX

– June cargo trades twice in MOC at $910/mt, $908/mt

– Isomer-grade MX gains $6/mt

Asian paraxylene prices were assessed up $1/mt from Thursday at $904.75/mt CFR Taiwan/China and $885.75/mt FOB Korea Thursday, supported by buying interest for June delivery cargoes, with two June cargoes traded in the Chemical Industry on Close assessment process, with both cargoes bought by Mitsubishi Corp. at $910/mt CFR Taiwan/China, and $908/mt CFR Taiwan/China, respectively. Chemical Industry participants attributed the pick up in buying interest for June to Japan’s JXTG Nippon Oil & Energy shutting its Kawasaki-based aromatics unit following a mechanical glitch at its absorbent tower. “The duration of the shutdown is unclear, but it will likely last at least two weeks,” a company source said. The limited price movement in CFR Taiwan/China PX prices this week was attributed to a wait-and-see approach, as clearer price direction was expected after the conclusion of US-China trade talks later this week. In the related Asian isomer-grade mixed xylene Chemical Industry, prices rose $6/mt day on day to $690/mt FOB Korea, and up $5/mt at $709/mt CFR Taiwan on Thursday. Traders and producers eyed the improved Chemical Industry conditions and downstream paraxylene seemed to have found support above $900/mt CFR Taiwan/China. Demand for isomer-MX may improve in the third quarter as spot buying from end-users in Taiwan and China is expected to increase, Chemical Industry sources said. In China, Sinopec is expected to import around 20,000 mt/month of isomer-MX after its Sinopec Hainan No. 2 PX plant comes into production, while Taiwan’s Formosa Chemicals and Fibre Corp. may also return to the spot Chemical Industry in July-August, sources said, following a hiatus due to the closure of its fire-hit No. 3 aromatics plant in Mailiao, Taiwan, since April 7.

RATIONALE:

Asian PX Chemical Industry were assessed up $1/mt from Thursday at $904.75/mt CFR Taiwan/China and $885.75/mt FOB Korea Thursday. The markers take an average of the H2 June, and H1 and H2 July laycans. The H2 June laycan was assessed at $906.75/mt, above an outstanding Asian origin June bid from Mercuria at $889/mt, and below an outstanding June offer from OTI at $907/mt (Chemical Industry). The bid was normalized due to a restriction in origin. The July laycans were assessed at $903.75/mt, above an outstanding Asian origin July bid from Mercuria at $885/mt, and below an outstanding July offer from BPSG at $904/mt. The July laycans were also assessed at a $3/mt backwardation to the H2 June laycan, below an outstanding June/July timespread offer from BPSG at $4/mt. The above rationale applies to the following Chemical Industry data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

Imported Data NWE Styrene

– Benzene trades at $745/mt

– Europe-Asia spread narrows

The European styrene spot price fell Wednesday amid a lack of buying activity. Offers were heard for May, June and July cargoes but buyers were absent from the market (Imported Data). “There are no bids out there,” a trader said. Styrene has turned bearish following the Easter holiday period. “[Prices are] creeping down,” a source said. S&P Global assessed styrene for loading 5-30 days forward at $1,081.50 /mt FOB ARA Wednesday, down $23/mt Imported Data from Wednesday. No assessment was made on Wednesday due to a public holiday in the UK. Upstream, prices picked up through the day on Wednesday for the European benzene market, with activity focused on May — though prompt value made an appearance for June. May trading was heard on Wednesday at $745/mt by Imported Data, with an offer at $760/mt. In Asia, styrene prices rebounded $7/mt on the day to $1,077/mt CFR China. The rise narrowed the spread to Europe to $4.50/mt, suggesting Asia could return to the highest priced region globally. According to Chinese market sources, an increase in styrene supply is expected in the coming months after the completion of scheduled plant maintenances in Asia this month, and shipments in China will return to normal.

RATIONALE:

S&P Global assessed styrene for loading 5-30 days forward at $1,081.50/mt (Imported Data) FOB ARA Wednesday, down $23/mt from the previous assessment. May was assessed at $1,084/mt, down $22/mt on the day, $1 below the outstanding offer at $1,085/mt. June was assessed at $1,074/mt, down $10/mt on the day, $1 below the outstanding offer at $1,075/mt (Imported Data). The backwardation between May and June narrowed to $10/mt on Wednesday.

Chemical Industry NWE Benzene

– Prompt Chemical Industry appears for June

– May trading quickly superseded by bids

Prices picked up through the day on Wednesday for the European benzene Chemical Industry, with activity focused on May — though prompt value made an appearance for June. May trading was heard on Wednesday at $745/mt, with an offer at $760/mt. This quickly ramped up until bids for the month lay over the previous offer level. No specific prompt demand was apparent however. A slight $10/mt backwardated structure appeared for June, suggesting a slight buy preference for the start of the month. The 5-30 days forward loading assessment was up $12.50/mt from Wednesday to $752/mt on Wednesday. No assessment was made on Wednesday due to a public holiday in the UK. In Asia, prices rose $11/mt on Wednesday to $620/mt FOB Korea due to strong demand from Taiwan. A trader in the Chemical Industry said this had caused some uncertainty on Wednesday, due to the upwards movement being opposite to a slip in upstream energy. The 16:30 London assessment of ICE Brent crude was down $1.21 on Wednesday to $70.13/b.

RATIONALE:

S&P Global assessed benzene Chemical Industry for delivery 5-30 days forward at $752/mt CIF ARA Wednesday, up $12.50/mt from Wednesday. May was assessed up $18.50/mt at $761/mt. Indications for H1 May, 15-20 May and full month showed a flat bid level at $760/mt. June was assessed up $14.50/mt at $718.50/mt, based on a curve and within an indicated spread to May of minus $30-$45/mt (Chemical Industry). H1 June was assessed at $721/mt, above a bid at $720/mt. H2 May was assessed at $716/mt, within a bid-offer range of $715-$725/mt. July was assessed up $14.50/mt at $712.50/mt, within a bid-offer range of $710-$720/mt and within an indicated spread to June of minus $5-$15/mt. August was assessed flat to July, with a bid-offer range $710-$715/mt (Chemical Industry). September was assessed flat to August. FOB was assessed at $752/mt, flat to CIF.

– June cargo trades at $909/mt CFR Taiwan/China

– Hengyi Brunei receives first crude shipment

Asian PX prices were assessed down $0.25/mt from Wednesday at $903.75/mt CFR Taiwan/China and $884.75/mt FOB Korea Wednesday, shrugging off the uptick in crude oil futures. The June/July backwardation continued to widen further. The July ICE Brent crude oil futures rose $1.19/b day on day to $76.10/b at 0830 GMT in Asian trade Wednesday. However, Market sentiment remained bearish, despite a slight pick up in downstream Chinese purified terephthalic acid Markets. The most actively traded September PTA futures on China’s Zhengzhou Commodity Exchange rose Yuan 24/mt from Wednesday to close at Yuan 5,884/mt Wednesday. During the Market on Close assessment process, a solitary June cargo was traded at $909/mt CFR Taiwan/China. Meanwhile, an outstanding Asian origin June bid from Hengli at $906/mt stood at close of MOC without any traders expressing interest. July was offered down aggressively, with an outstanding July offer from BP Singapore at $902/mt failing to attract any buying interest, while the June and July backwardation widened to $6/mt on the day. In Market news, the Greenfield Hengyi refinery in Pulau Muara Besar, Brunei, received its first crude shipment late last week, signaling petrochemicals production is moving closer. The first phase of the project, is set to have crude processing capacity of 8 million mt/year, producing 1.5 million mt/year of PX and 500,000 mt/year of benzene. Expectations are mixed on when the plant will start commercial sales. A PX Market participant was “confident” late Wednesday that the first sale would likely be in July. However, a benzene Market participant said that Q4 2019 was more probable.

RATIONALE:

Asian PX prices was assessed down $0.25/mt from Wednesday at $903.75/mt CFR Taiwan/China and $884.75/mt FOB Korea Wednesday. The markers take an average of the H2 June, and H1 and H2 July laycans. The H2 June laycan was assessed at $907.75/mt, above an outstanding Asian origin June bid from Hengli at $906/mt, and below an outstanding June offer from OTI at $908/mt. The bid was normalized due to a restriction in origin. The July laycans were assessed at $901.75/mt, above an outstanding Asian origin July bid from Mercuria at $898/mt, and below an outstanding July offer from BP Singapore at $902/mt. The July laycans were also assessed at a $6/mt backwardation to the H2 June laycan, up to $3/mt from Wednesday. The above rationale applies to the following Market data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

Chemical Industry news of Asian Iso-MX

– Crude, PX weakens

– East China domestic price dips

Asian isomer-grade mixed xylene prices slipped $7/mt from Tuesday to $690/mt FOB Korea and $709/mt CFR Taiwan on Tuesday. Prices slipped as the MX Chemical Industry still seemed bearish amid lower upstream and downstream prices. July ICE Brent crude oil futures fell 41 cents to $69.78/barrel at 0830 GMT in Asian trade Tuesday, and downstream paraxylene prices were also seen under pressure. China Chemical Industry has returned on Tuesday after last week’s holoday, and the June CFR China bids were heard to have dropped before the holidays, which started May 1. A trader said June bids were now around $700/mt CFR China. The prompt domestic price of isomer-MX in East China Chemical Industry slipped Yuan 60 from April 30 to Yuan 5,570-5,590/mt on Tuesday, or about $706.60/mt

RATIONALE:

Asian isomer-MX was assessed down $7/mt from Tuesday at $690/mt FOB Korea and at $709/mt CFR Taiwan on Tuesday. The Chemical Industry take the average of the third and fourth half-month laycans, currently the two June half-months. No bids or offers were registered during the Chemical Industry on Close assessment process. During the MOC process, an offer for June loading cargo was heard lowered to $692/mt FOB Korea, without atttacting any bids. The June laycans were assessed below the offer, at $690/mt FOB Korea. No bids or offers were heard on a CFR Taiwan basis, but the marker was assessed down in line with the FOB Korea Chemical Industry. The above rationale applies to the following market data codes: PHAUV00 for FOB Korea and PHAUT00 for CFR Taiwan.

Chemical Industry news of Asian PX

– July trades at $903/mt CFR Taiwan/China in MOC

– JXTG shuts Kawasaki aromatics unit due to glitch

Asian PX prices were lower by $7.33/mt from Tuesday at $904/mt CFR Taiwan/China and $885/mt FOB Korea Tuesday, on the back of bearish sentiment amid steep falls in the upstream Chemical Industry. The July ICE Brent crude oil futures fell 41 cents/b from last Tuesday to $69.78/b at 4.30pm, at the close of Asia trade on Tuesday. Chemical Industry activity was again muted during the day but discussions picked up during the market on Close assessment process, with bids emerging for both June and July laycans. Early in the MOC, a June/July Asia origin timespread was traded at $1/mt, while July was traded at $903/mt CFR Taiwan/China just before the close of MOC, between Mercuria and BP Singapore Chemical Industry. Meanwhile, an outstanding Asian origin June bid from Glencore at $907/mt stood at the close of MOC without any traders expressing interest. In plant news, Japan’s JXTG Nippon Oil & Energy has shut the Kawasaki-based aromatics unit over the weekend following a mechanical glitch at its absorbant tower said a company source Tuesday. “The duration of the shutdown is unclear, but it will likely last at least two weeks,” he added. The company previously announced a decision to reduce PX production by 10%-20% of total capacity because of the current squeezed PX-naphtha margin (Chemical Industry). JXTG Nippon Oil & Energy also recently shut its China-based aromatics plant on April 26 after a mechanical glitch, S&P Global reported earlier. Meanwhile,  Formosa Chemicals and Fibre Corporation’s fire-hit No. 3 aromatics plant in Mailiao, Taiwan, could remain shut until the fourth quarter of this year, much longer than previously anticipated, Chemical Industry sources with knowledge of the matter said Tuesday.   A company source declined to confirm the restart date of the plant but said FCFC has plans to ramp up production of related orthoxylene — a byproduct from paraxylene production — in June from two aromatics units in Mailiao.

RATIONALE:

Asian PX prices were assessed down $7.33/mt from Tuesday at $904/mt CFR Taiwan/China and $885/mt FOB Korea Tuesday. The Chemical Industry take an average of the H2 June, and H1 and H2 July laycans. The H2 June laycan was assessed at $906/mt, above an outstanding Asian origin June bid from Glencore at $907/mt, and below an outstanding June offer from OTI at $911/mt. The bid was normalized due to a restriction in origin. The July laycans were assessed at $903/mt, at the level of the last July trade between Mercuria and BP Singapore Chemical Industry, above an outstanding Asian origin July bid from Glencore at $903/mt, and below an outstanding July offer from OTI at $910/mt. The July laycans were also assessed at a $3/mt backwardation to the H2 June laycan, based on Chemical Industry feedback, and also considering an earlier June/Jul time spread for Asia origin which was traded at $1/mt and normalized due to a restriction in origin. The above rationale applies to the following Chemical Industry data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

Chemical Industry news of Asian Styrene

– Tracks weaker upstream benzene, crude

– SM inventory drops 17,000 mt on week to 298,000 mt

Asian styrene monomer prices fell $8/mt from Tuesday to $1,070/mt CFR China and $1,030/mt FOB Korea Tuesday, tracking weaknesses in the upstream crude and benzene Chemical Industries. In the east China domestic market, the June marker fell Yuan 60/mt from Tuesday to Yuan 8,230/mt ex-tank Tuesday. A market participant noted that the decline is on the back of a softer macroeconomic situation. There was an increased Chemical Industry focus on the progress of the US-China trade negotiations after US president Donald Trump threatened to impose additional tariffs on China. However, some sources said that any price movement in styrene and its downstream Chemical Industry due to the potential trade limitations is sentiment-driven. “There is no impact on supply-demand fundamentals at the moment,” a trader said. At 4:30 pm Singapore time (0830 GMT), the July ICE Brent crude oil futures dipped 41 cents/b from Tuesday’s settle to $69.78/b Tuesday. According to market sources, total SM inventory in China declined 17,000 mt on the week to 298,000 mt Tuesday. A Chinese trader noted that downstream demand was stable with no significant change after the Chemical Industry returned from holiday. While buying interest would resume after the break, downstream producers are holding relatively high SM inventory as operating rates were lowered during the holidays, the trader said. Further, styrene shipments into China are expected to be relatively concentrated in early May. In statistics news, India’s styrene imports surged 49.7% on the month to 89,657 mt in February. Total imports have increased 28% year on year.

RATIONALE:

Asian SM was assessed $8/mt down from Tuesday at $1,070/mt CFR China and $1,030/mt FOB Korea Chemical Industry Tuesday. The markers currently take the average of the H1 and H2 June laycans. There were no transparent bids or offers during the Chemical Industry on Close assessment process on Tuesday. H1 and H2 June were assessed at the pegged level of $1,070/mt. In the east China domestic Chemical Industry, the June marker was assessed down Yuan 60/mt from Tuesday at Yuan 8,230/mt ex-tank, equating to $1,060.28/mt on an import parity basis. The FOB Korea marker was assessed at $1,030/mt, based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,060/mt, based on the pegged $10/mt spread to CFR China.

– Benzene imports pressure pricing

– Europe remains the preferred destination for US SM

US prompt spot benzene prices moved lower Tuesday as May barrels on a FOB and DDP basis were assessed down 1 cent on the day to close at 232 cents/gal. May was heard traded at the assessed level. The Market maintained a backwardated structure, with June barrels on both and FOB and DDP basis discounted to May by 4 cents at 228 cents/gal. Sources said that pressure remained from lofty imports after nearly 113,000 mt landed on US shores in April. Sources anticipated continued length, with some sources expecting another 100,000 mt to load out of Asia during May. Derivative demand was improved and there was unconfirmed talk that LyondellBasell may have returned from a planned maintenance. Confirmation and details were unavailable at time of publication. Sources said that Europe remained the preferred netback. Prompt spot styrene was assessed flat Tuesday at $1,025/mt FOB USG, while June was assessed unchanged at $1,010/mt. In energy, crude rose slightly as June WTI futures gained 31 cents on the day to settle at $62.25/barrel.

RATIONALE:

US May benzene on a DDP USG basis was assessed down 1 cent on the day at 232 cents/gal on a bid-offer range last seen at 231-233 cents/gal and considering a reported trade at the assessed level. The May FOB price was assessed level to the DDP price. June benzene fell 1 cent on the day and was assessed at 228 cents/gal on a bid-offer range last seen at 227-229 cents/gal. The May FOB assessment closed level to the DDP price, maintaining the structure seen the previous day. Prompt-month (May) styrene pricing was assessed at flat $1,025/mt (46.49 cents/lb) FOB USG amid pricing indications last heard at $1,025-$1,030/mt FOB USG. Forward-month (June) pricing was assessed flat at $1,010/mt (45.81 cents/lb) FOB, USG maintaining the structure seen the previous day.