Aromatics

　 Benzene prices on an FOB Korea basis and paraxylene (PX) prices on a CFR Northeast Asia basis both saw a sharp decline in prices in the latter half of the week. Crude oil prices declined further, owing to expectations of easing tensions in the Middle East and this weighed on the aromatics market. As some refineries were scheduled to complete their turnarounds in August, production of aromatics was expected to recover. Meanwhile, as demand remains weak and a bearish sentiment due to lower crude prices was expected to lead end-users to refrain from purchases, there was a view that the supply/demand balance might be on a loosening trend.

Olefins

　 Spot trade for ethylene was muted both in Northeast Asia and Southeast Asia. Ethylene makers continued production cuts, and in South Korea, several naphtha crackers were expected to be shut down in September and October due to restructuring and turnarounds. Also in Japan, naphtha crackers were expected to be shut down for repair in August and September. Although spot demand was observed, buyers were not aggressive to buy at fixed prices as derivative margins were declining, and there were expectations that prices might be lower going forward.

　 In the Asia propylene market, perception of tight supply/demand receded in Southeast Asia. In the CFR Northeast Asia market, two Taiwanese makers issued sell tenders for September loading. Meanwhile, with China domestic prices remaining firm, CFR Northeast Asia prices were supported. In South Korea, one petrochemical maker issued a buy tender. In the Southeast Asia market, Malaysia's Pengerang Refining and Petrochemical (PRefChem)'s one residue fluid catalytic cracker (RFCC) continued operations, and offers of Taiwanese origin were also seen. Meanwhile, with demand for derivatives not strong, perception of tight supply/demand receded.

　 In the Asian butadiene market, a wait-and-see mood strengthened. While crude and naphtha prices declined sharply, the direction of butadiene prices was unclear, and discussions were generally muted. In the latter half of the week, a Chinese petrochemical maker conducted export negotiations for September loading cargoes.

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