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China Market Reports 11 June 2017

Chine PE Market Forecast

Supply: In the next week, the 60kt/a old FDPE unit at PetroChina Lanzhou Petrochemical keeps in maintenance. The 150kt/a PE unit at Shanghai Jinfei Petrochemical will be restarted on Jun 12. The 940kt/a PE unit at PetroChina Fushun Petrochemical will be maintained for a month in June. The 200kt/a LDPE unit at BASF-YPC will be maintained from Jun 12 to Jun 16. The 110kt/a old LDPE unit at Sinopec Maoming Company will be halted for 2 days. The 300kt.a HDPE unit at Sinopec SABIC TianJin Petrochemical will be maintained from Jun 13 to Jun 18. The 450kt/a FDPE unit at Sinopec Zhenhai Refining & Chemical will be maintained from Jun 13 to Jun 19. The 300kt/a LLDPE unit at Zhongtian Hechuang Energy will be maintained from Jun 11 to the end of June. The expected decrease in supply will be 73kt, therein, the decreases in HDPE takes up most of the total. The import volume is expected to increase next week.

Demand: In terms of the agricultural film, the demand is in the off season. Many producers stopped production for maintenance due to the less orders. The market players held wait-and-see sentiment due to the unclear feedstock market outlook. The low buying activity will give less support to the feedstock market.

To sum up, the upstream crude oil market kept volatile, giving limited guidance to the PE market. In terms of the spot PE market, although the decreases in supply amid maintenance will increase next week, the high inventory pressure is hard to be eased. Besides, the demand keeps weak. Affected by the environmental protection inspections, the operating rates at many downstream factories were restricted. The PE prices will fluctuate narrowly next week.

China SM Market Forecast

Suppliers may try to push their styrene offers higher next week, supported by the constantly decreasing stocks at the main ports of East China, tight spot supply in Jiangsu as well as bullish stances at Huaxicun Commodity Contracts Exchange. However, the decreasing benzene and ethylene prices cause lower costs for styrene. Moreover, users were cautious about purchasing high in the demand off season. Thus, the upward extent should be limited for styrene prices.

Polystyrene market Review

The Chinese PS market was said week this week. PS prices rallied slightly in certain regions after a slide. Prices of some grades of PS surrendered the rises gained before the Dragon Boat Festival holiday in line with the bearish external environment and lower styrene prices. Most PS producers kept ex-works prices stable on Monday. PS prices stopped decreasing as styrene prices rallied from Monday to Wednesday. However, end users showed strong resistance to the high price. Selling prices from traders were at lows. Players adopted wait-and-see stances given the slump seen in crude oil prices.

China Methanol Market Forecast

In the inland areas, the methanol offers at the major producing areas had no price adjustments temporarily, as the inventory pressure was tolerable. However, the purchasing pace from the major consumption areas slowed down, and some traders provided discounts. At present, there is basically no arbitrage space between the producing areas and the consumption areas. Moreover, the end demand can hardly improve. Therefore, the market players still hold some bearish attitudes towards the methanol offers at the major producers. It is predicted that the inland market will fall back next week, and the prices are estimated in the range of RMB 2,200-2,300/mt in Shandong and RMB 1,980-2,050/mt in Inner Mongolia.
In the coastal areas, tightened spot supply and continuous futures price rises quickly pushed up local methanol prices this week. However, the traders and downstream users still operated cautiously. Once the profit-taking activities occur, the market trend will change accordingly. In the near term the methanol prices in the coastal areas will adjust at a high level, and RMB 2,350-2,360/mt will be a support level.

Jun 12, 2017 13:32
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