Olefins

The CFR Northeast Asia ethylene market decreased as buying interest receded. Since crude prices fell from previous high levels, derivative styrene monomer (SM) prices softened. Along with this, buying ideas for ethylene receded. In discussions this week, a deal for delivery at the end of August was reported at $970/mt. Regarding facilities, Korea's LG Chem would reportedly reduce operation rates of its naphtha crackers from August.

The Asia propylene market weakened. In Northeast Asia, with COVID-19 spreading in China, demand receded. On the other hand, availability from Taiwan and Rabigh increased and perceptions of slack supply/demand emerged. Under this situation, the market moved down. On an FOB Korea basis, one maker sold a cargo loading September via a tender.

The Asia butadiene market was firm. In Northeast Asia, supply remained tight and this supported the market. Further, butadiene prices in Europe and the US were firm and the arbitrage from Asia to the US was open. On the other hand, end-users had not finished buing necessary cargoes and supply/demand was tight.