Petrochemicals: Dec16-20: Ethylene rebounds slightly on reduction in production
Aromatics
The Asia aromatics market was firm as the Organization of the Petroleum Exporting Countries (OPEC) reached an agreement to enhance production cuts and benchmark feedstock crude and naphtha prices strengthened. Further, operation rates at aromatics facilities were seen to be lowered due to low profitability and this also supported the market.
Olefins
CFR Northeast Ethylene prices increased. Due to a fall in profitability, some makers reportedly reduced production and perceptions of ample supply receded. However, since term discussions for 2020 were still taking place, discussions on a spot basis were not active. In the second half of the week, views were heard that current possible deal levels were at around $730/mt.
The Asia propylene market moved up. In Northeast Asia, selling pressure eased and traders selling at low prices were no longer seen. But as term negotiations were not completed, spot discussions were thin. On an FOB Korea basis, talks were mainly on term cargoes and spot trade was inactive.
The Asia butadiene market declined. In Northeast Asia, China domestic prices softened and many end-users had bought necessary quantities until January. Therefore, buying interest for spot cargoes was lackluster. In Southeast Asia, one maker sold a cargo loading Dec 25-Jan 5 via a tender.
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