Aromatics

The Northeast Asia aromatics market moved in a narrow range but the spread with feedstock costs was widening. As profitability of aromatics was low, production cuts by makers were prolonged and supply was limited. Further, since term discussions had not been concluded, available cargoes hardly appeared in the spot market. For these reasons, the market was firm. Regarding supply, on-spec of aromatic products produced at a facility that Zhejiang Petrochemical in China was currently starting up was said to have been confirmed.

Olefins

CFR Northeast Asia ethylene prices decreased due to slack supply/demand. As for demand, buying interest was receding since profitability of derivatives was decreasing. Supply was seen to be ample since cargoes from Europe and the US were expected to be delivered in January. However, as the spread between ethylene and benchmark feedstock naphtha prices was also shrinking, petrochemical makers started considering to reduce production of ethylene. In the middle of the week, information was heard that cargoes to be delivered in China in January were traded at $710/mt and $730/mt.

The Asia propylene market fell. In Northeast Asia, with China domestic prices softening due to perceptions of ample supply, buying interest from end-users for imported cargoes was thin. On the other hand, sellers still had availability for December and market sentiment weakened. On an FOB Korea basis, spot discussions were not heard as term negotiations for 2020 were ongoing. In Southeast Asia, spot demand was not observed while some makers had surplus cargoes. As a result, supply/demand was slack.

The Asia butadiene market was unchanged. In Northeast Asia, with domestic supply in China recovering, buying interest from Chinese end-users was not as strong as before. On the other hand, as term negotiations were not yet concluded, sellers had few spot cargoes on hand and showed no hurry to sell. Under such circumstances, few bids and offers were heard and a wait-and-see mood pervaded the market. In Southeast Asia, a Thai maker sold a spot cargo loading January via a tender. In addition, an Indian maker also conducted a sell tender for second-half December loading.

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