The impact of Hurricane Harvey's damage continues to reverberate throughout Asia's petrochemical markets, leaving trade participants perturbed over deepsea supply for October arrival.
Most products rose last week on impending short supply and anxiety from traders although the long-term impact has yet to be felt.
Several steam crackers were shut in Texas last week, prompting concerns of ethylene supply disruption from the US. Some market sources said ethylene supply from the US to Asia would likely be delayed because of port and plant closures.
Meanwhile in Southeast Asia, prices have risen on healthy demand as market participants in the region are returning in force, procuring cargoes to meet demand for goods just in time for the year-end festivities.
AROMATICS
Firm buying interest for October would likely extend into the Asian styrene monomer market this week, as news of several plant outages already prompted end-users to actively seek additional September cargoes.
SM prices rallied $136.50/mt week on week to $1,381.50/mt CFR China and $1,354.50/mt FOB Korea last Thursday. Chinese domestic prices followed suit, surging Yuan 250/mt day on day to Yuan 11,050/mt, or $1,390/mt on an import parity basis, last Thursday.
The strength seen in downstream SM prices reverberated into the Asian benzene market, as prices last Thursday rose $9.50-$17/mt from August 25, following firmer sentiment amid supply disruption in the USGC.
While there was uncertainty over the extent of the disruption in USGC benzene supply, prices in Asia still tracked USGC prices closely. But with the arbitrage window to the USGC still closed, trade participants in Asia were cautious, which capped FOB Korea prices at close to import parity prices into China.
OLEFINS
Trade activities in the Asian ethylene market were quiet throughout last week as market participants decided to take a wait-and-see stance, assessing possible impact from the aftermath of Harvey.
Market sources said the Asian ethylene market would likely remain at high levels -- currently at five-month highs -- with support seen from a strong downstream market. Asia's SM market was particularly strong, with styrene production margin nearing $200/mt last week, S&P Global Platts data showed.
Rising demand for downstream polypropylene buoyed the propylene market as the CFR China marker rose $6/mt to $931/mt last Thursday. Demand from downstream acrylonitrile, another key derivative, was also firm because of limited supply from the US.
Butadiene prices hit a five-month high last Thursday on concerns over tight supply, as well as demand for September cargoes, with demand from downstream Chinese synthetic rubber producers heard as particularly strong.
Spot prices had skyrocketed $50/mt to $1,360/mt FOB Korea and $40/mt to $1,410/mt CFR China last Thursday. Several market participants said that although September cargoes were mostly sold out, there were inquiries for cargoes for the laycan and emerging buying interest for early October cargoes.
METHANOL AND MTBE
Firmer gasoline prices propped up Asian MTBE prices last week as the impact from the USGC refinery output pushed up arbitrage demand for gasoline.
Methanol prices in Asia leaped last week, as the CFR China marker surged $14/mt to $324/mt last Thursday and the Chinese domestic price spiked Yuan 170/mt to Yuan 2,790/mt, or $332/mt on an import parity basis.
Southeast Asia was no exception, as prices firmed $16/mt to $321/mt CFR Southeast Asia, because of the unplanned shutdown of Malaysia's Petronas Chemicals 1.7 million mt/year No. 2 methanol plant. The plant has since been restarted and is expected to ramp up to 90% of capacity on Tuesday.
POLYMERS
In the PVC spot market, producers halted spot offerings globally amid concerns over tight supply from the US after the hurricane forced some PVC plants to be shut.
Formosa Plastics last Tuesday declared force majeure on chlor-alkali and specialty PVC products produced at its petrochemical complex in Point Comfort, Texas, citing fallout from the aftermath of Hurricane Harvey.
As a result, the CFR China PVC price benchmark rose $10/mt week on week to a five-month high of $945/mt last Wednesday.
