The Asian petrochemicals market is likely to continue witnessing logistical issues in the trading week ending Aug. 27, as regional governments impose containment measures to curb the COVID-19 spread.
Toluene** Selling pressure is seen from South Korea, which may pull Asian complex lower. Some India-based importers noted that pre-festive sales were proving to be weaker-than-usual. Sentiment remained bearish on the Southeast Asia front, with term buyers, particularly in the Vietnam market, heard requesting sellers to redivert their cargoes elsewhere, sources said.
** Domestic China market was also stable-to-weaker, with domestic east China prompt ex-tank prices assessed lower. China's toluene price in local currency is relatively weak with sellers talking about export intentions.
Isomer-MX** Isomer-MX prices may remain under pressure as the spread to paraxylene has narrowed in recent weeks, and the October supply-demand balance is expected to be a tad long compared to September due to end-users' maintenance shutdown.
** The market last week flipped from flat to backwardation and is likely to remain in such structure due to the difference in market balance in September and October.
** With a steep fall in prices globally last week -- down $60/mt at $763.50/mt FOB Korea -- an arbitrage from South Korea and Japan might open up if domestic Chinese MX prices remain stable to firm.
MEG** Asian monoethylene glycol might extend falls on weak demand due to lower consumption in east China, given the resurgence of COVID-19.
** Logistical issues persisted since many provincial borders were closed to contain the spread of the virus.
Methanol** The Asian methanol market will look to Europe for price direction in the week to Aug. 27.
** FOB Rotterdam methanol prices may have been stable at Eur425/mt or $496.44/mt on Aug. 20, but any upside in Europe will compel Asian methanol prices to move higher.
** The availability of spot cargoes in China, South Korea, Taiwan and India remain tight as Middle Eastern producers allocate spot volume to Europe.
** Southeast Asian, Taiwan and South Korean methanol were assessed $4-$10/mt higher on the week at $390-$395/mt Aug. 20.
Solvent-MX** The solvent-MX market in Asia is likely to continue taking cues from crude oil prices and the entire aromatics complex in the week to Aug. 27.
** The weakness in downstream demand for solvent-MX and higher inventory in China have been putting a downward pressure on prices.
