Aromatics

The FOB Korea benzene market softened in the second half of the week. The derivative market was dull and the upside of prices was curbed. The price spread between benzene and benchmark feedstock naphtha was still narrow. As for paraxylene (PX), profitability was still low as well. Supply for both benzene and PX was expected to increase going forward along with the restart of refineries in China and the startup of new refineries. Therefore, the market would remain curbed.

Olefins

The CFR Northeast Asia ethylene market decreased. Along with the previous rise in the ethylene market, profitability of derivatives worsened and production was reduced. Therefore, ethylene demand receded. In the previous week, a deal was reportedly done at $800/mt. This week, some end-users aimed to buy at $800/mt and below but other end-users showed views that it was difficult for deals to be done at prices below $800/mt. Sellers perceived that there were not many available cargoes and they were reluctant to sell at prices below $800/mt at present.

The Asia propylene market rose. In Northeast Asia, with facilities undergoing maintenance, supply of Asian cargoes was perceived to be tight. Further, demand in the China domestic market was firm and the market was on an uptrend. As sellers adopted a bullish stance, end-users that had to purchase necessary cargoes had no choice but to give way to sellers. In Korea, Lotte Chemical conducted a buy tender for 10,000mt for August delivery. In Southeast Asia, Thailand's PTTGC carried out a sell tender for 1,600-2,350mt loading end-July.

The Asia butadiene market moved up. Non-regional supply decreased and Asian makers were using butadiene as a feedstock and digesting it in their system by raising run rates of derivative facilities. As a result, supply was tight. Sellers therefore adopted a bullish attitude and showed no hurry to sell. On the other hand, end-users had sufficient stocks and buying interest for imported cargoes was not strong. But the market was boosted slightly by high feedstock costs.