Market sentiment in the Asian ethylene market was seen to be positive last week, while methanol markets were weaker.
AROMATICS
Paraxylene markets were firmer last week on bullish purified terephthalic acid futures in China.
The extended shutdown of major Chinese PTA producer Hengli Petrochemical's 2.2 million mt/year No. 1 PTA line at Dalian until mid-August took the market by surprise this week and exacerbated an already tight inventory situation among China's PTA producers, a PTA producer said.
As such, the market structure in China's much-watched PTA futures on the Zhengzhou Commodity Exchange flipped to a highly unusual backwardation for September to January over the last week, caused in part by PTA plant shutdowns and tight spot supply, market sources said.
Amid firmer Asian benzene markets last week, there was a caution mood.
Market sentiment was bearish amid a supply overhang and weak Chinese import demand. Inventory levels at main eastern Chinese ports were heard to have risen 5,300 mt week on week to around 113,800 mt as of last Friday.
In the absence of spot demand from the US Gulf Coast, participants mostly sought direction from the Chinese market.
In toluene markets, demand firmed slightly last week for FOB Korea cargoes as some market participants were covering their short positions.
Toluene inventories in east China stood at 80,000 mt last week, down 5.88% week on week while south China inventories rose 33.33% to 12,000 mt as of last Friday.
OLEFINS
Market sentiment in the Asian ethylene market was seen to be positive last week, as a firmer ethylene derivatives market prompted buying appetite for spot ethylene cargoes.
However, the healthy demand would likely be covered by rising ethylene supply from the Middle East and Europe.
Deepsea ethylene cargoes were seen to be coming from the Middle East and Europe, where supply was ample with the end of the turnaround season.
But the propylene market was not rosy as market sources noted that demand for propylene was lukewarm.
"Downstream polypropylene demand is slow as this is not the peak season," said a Chinese propylene buyer. "There should be a pick-up in PP around August, because of seasonal interest."
Butadiene prices in Asia were lower last week because of ample deepsea cargoes.
"There seems to be more supply, with deepsea cargoes from the US and Europe," a market source said.
Another source said these cargoes were earmarked to offset gaps from earlier turnarounds.
METHANOL AND MTBE
Methanol markets were weaker last week, following a decline in Chinese domestic spot prices.
Demand in Southeast Asia was weak, and producers and traders diverted spot cargoes to China and South Korea in search for better netbacks, sources said.
Asian MTBE prices rose $1/mt week on week to $579/mt last Friday, amid a rebound in crude oil and gasoline prices last week. Amid the volatility in the energy markets, participants stayed on the sidelines last week, awaiting a clearer market direction.
Some inquiries emerged last week for first-half August loading cargoes from Singapore, with discussions heard at premiums in the low-$20s/mt to Mean of Platts Singapore MTBE assessments on a FOB basis.
POLYMERS
Asian high density polyethylene film prices were stable to lower last week as markets remained sluggish amid a traditional off-peak manufacturing season.
India rolled out a new goods and services tax regime July 1 and polymer demand is now uncertain as a result, with smaller converters and polymer traders in the unorganized sector affected, an Indian producer said.
PE demand from the downstream plastics sector has taken a hit to date in 2017 due to a slowdown in China's GDP growth.
Meanwhile, Asia's PE-ethylene margin was negative because of weak PE demand and a strong feedstock ethylene market, S&P Global Platts data showed.
In the PP market, firmer prices were seen in China last week amid market concerns that July was typically a season of low demand for PP, because of wet weather conditions.
"Buying interest will pick up in August," said a trader. Other sources noted that domestic PP supply and inventory levels in China were still firm, and fewer imports were being procured.
OTHERS
Acrylonitrile prices in Asia declined last week because of lackluster downstream demand.
"The market is not too good, as acrylic fiber demand is weak," said a buyer, with another source saying a "Pick-up [in demand] for acrylic fiber is expected in September."
Nevertheless, market sources said that interest in acrylonitrile-butadiene-styrene, another major derivative, remained stable.
