Ethylene Market Review
The Asian ethylene prices kept rising slightly this week. As of May 3, closing prices rose by $5/mt to $1,209.5-1,211.5/mt CFR NEA, and closing prices rose by $15/mt to $1,074.5-1,076.5/mt CFR SEA. The ethylene supply kept insufficient, due to the intensive turnarounds. Besides, the ocean cargos from Middle East were transferred to Europe, where the selling prices were higher than that in Asia. In terms of the maintenance, the naphtha cracking unit at Idemitsu will be shut formaintenance from September to late October.
China Polyethylene Market Review
The Chinese PE prices were mixed this week. Early in the week, the LLDPE futures prices fluctuated at highs, supporting the spot PE prices rose slightly. Then the LLDPE futures prices edged down. The PE ex-works prices at petrochemical companies were mixed. The market trading atmosphere was weak due to the cautious attitude. As of May 4, the mainstream LLDPE offers up by RMB 50/mt to RMB 8,800-9,300/mt. The LDPE offers slipped by RMB 100/mt to RMB 10,050-10,400/mt. All grades of HDPE offers down by RMB 50/mt, except for injection materials which down by RMB 250/mt.
Chine PE Market Forecast
Supply: In the next week, the 60kt/a old FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 450kt/a PE unit at Sinopec Shanghai Petrochemical entered into maintenance. The 300kt/a FDPE unit at China National Coal Group Yulin Energy keep in maintenance. The 270kt/a LDPE unit at Shenhua Xinjiang Energy keep in maintenance. The restarting time of 200kt/a LLDPE unit at Sinopec Yangzi Petrochemical delayed to May 7. The expect decrease in supply will be 23.5kt. The PE import volume is expected to decrease as a whole in recently, but the import volume in the next week is expected to be stable from last week. Less LDPE sources will arrival in recently.
Demand: In terms of the agricultural film, the mulch film demand gradually decreased with the finish of April. The operating rates at film factories kept dropping, which couldn’t support the spot PE market.
To sum up, the sluggish crude oil market depressed the confidence of PE market players somewhat in recently. In terms of the spot PE market, although the LLDPE futures rose notably at the end of April and at the beginning of May, the spot PE market performed not optimistic. The market was still in the situation of oversupply. The supply pressure will still exist in May. The demand kept weak. The transaction volume of spot goods ran at lows, which was hard to support the spot PE prices effectively. The PE market will remain weak next week. The mainstream LLDPE prices may move within the range of RMB 8,750-9,300/mt.
China Styrene Market Review
East China: The styrene price soon dropped to around RMB 9,000/mt before the May Day holiday, dragged down by the slightly rising stocks at the main ports of East China, the successive arrival of deep-sea shiploads as well as the weak demand. The styrene price slumped after the holiday with mainstream negotiating prices falling to RMB 8,600-8,750/mt. Major suppliers undersold their spots amid a strong bearish atmosphere. However, May 3 saw slight rallies in the styrene prices, supported by the styrene stocks at the main ports of East China and the demand for short covering.
South China: The South China styrene market kept going lower this week. Mainstream negotiating prices for styrene were constantly declining, resulting from the downward styrene market in the East China and the supply growth of imported resources. Downstream users mainly stayed sidelined and purchased styrene on a need-to basis.
On May 3, styrene stocks at the ports in South China decreased 2.9kt to 26.7kt, and the volume of spot commodity for sale decreased 0.5kt to 9.5kt.
China SM Market Forecast
The benzene and ethylene markets fail to provide strong cost support for the styrene market.
The supply side still faces notable pressure, as most styrene units that took maintenance in earlier days will restart in May and the stock level at the main ports of East China remain high. Additionally, some deep-sea shiploads will arrive in China in succession.
The demand is not likely to recover as most downstream producers hold ample stocks and show weak buying appetites for styrene. With the U.S.-Asia arbitrage window open, more styrene resources from the U.S. will flow into Asia. On the whole, Chinese styrene prices will probably hover at RMB 8,600-8,900/mt next week.
Expandable Polystyrene market Review
The Chinese EPS market continued decreasing this week. EPS producers kept cutting their offers, given lower costs and the muted demand. Most trading prices were lower than the offers. Sparse trades were concluded, as downstream users delayed their purchases for fear of further decreases. Traders rationally controlled their stocks to avoid risks. Players’ confidence was greatly dampened. On May 4, prevailing EXW offers (in cash) for general materials at large-scale and small-scale manufacturers Jiangsu (East China) stood at RMB 9,900-10,200/mt and RMB 9,700-10,000/mt respectively, with negotiable space in dealing prices.
Polystyrene market Review
Prevailing Chinese PS market prices first held stable and then lost ground this week. the PS market held stable last Friday in line with stable ex-works prices. However, Chinese PS producers cut their offers early this week, responding to the slumping styrene prices. PS market offers went lower accordingly. Transactions failed to see any improvement. On May 4, the offer for general-purpose GPPS was RMB 10,050/mt, down 1.47% from last week. The price for HIPS was at RMB 11,800/mt, up 0.85% from last week.
International Methanol Market Review
This week the prices of imported methanol fluctuated in line with market changes, and the sales were put first. Earlier this week, the suppliers maintained stable offers. May and June arrival cargoes were offered at a premium of 2.5%-3% or $290-295/mt. The negotiation prices were heard at a premium of 1.5%-2%. A few May arrival Iranian cargoes were transacted at $285/mt, and a few non-Iranian cargoes were dealt at a premium of 1.5%. H2 May arrival non-Iranian cargoes from Middle East were dealt at $281/mt (5,000mt). Later this week, a few suppliers lacking confidence cut prices to stimulate sales. A few H2 May arrival SE Asian cargoes were transacted at $270/mt (5,000mt). The negotiation prices for May and June arrival cargoes slipped to a premium of 1%-2%. However, the buyers were cautious about bidding.
China Methanol Market Forecast
The inland areas the traditional downstream demand can hardly improve, curbed by the environmental protection inspection. Moreover, the previously-stopped methanol units will restart, and newly added units will be put into operation successively. Thus, the methanol supply is expected to increase further, so the buyers still hold wait-and-see attitudes. It is predicted that the mainstream dealing prices in the methanol market may continue to slip next week amid bearish sentiments, and some producers in the major producing areas will be forced to cut offers. The prices are estimated to be in the range of RMB 1,800-1,900/mt in Inner Mongolia and RMB 2,100-2,200/mt in Shandong. In the coastal areas, the methanol market is dominated by unfavorable factors, and the downstream purchasing is sluggish. Meanwhile, the traders also show limited interest in operating due to lacking speculation spaces. The methanol sales are tough overall. The methanol prices will continue to move downwards in the coastal areas in the near term. RMB 2,400-2,450/mt will be a support level.