Petrochemicals: Feb 5-9: Butadiene rises further on tightening supply
Benzene prices on an FOB Korea basis were bullish owing to firmness in benzene prices in the destinations of export such as China and the US. In the US, traders had a long position since prices were expected to increase going forward. Paraxylene (PX) prices on a CFR Northeast Asia basis moved in a narrow range. Supply of prompt cargoes was seen to be in surplus and this curbed the market.
In the Northeast Asia ethylene market, trade was muted since Lunar New Year holidays would start from Feb 10. Along with a previous rise in ethylene prices, profitability was said to be recovering slightly. But since propylene prices were not strong, it was unclear whether Northeast Asian petrochemical makers would raise operation rates of naphtha crackers in March onwards.
In the Asia propylene market, a holiday mood was strong. In Northeast Asia, several players were already taking a holiday for Lunar New Year and few players were in the market. Under this situation, movements were thin.
In the Asia butadiene market, demand was strong. In the CFR Northeast Asia market, delivery of US cargoes was delayed and buying interest from end-users for Asian cargoes strengthened. In the US, Shell's butadiene facility was shut down due to malfunctions and supply for butadiene was affected. In Southeast Asia, two petrochemical makers conducted sell tenders.