China Market Reports 24 Sep 2017

Chine PE Market Forecast

Supply: Less maintenance will be in next week. The 60kt/a FDPE unit at PetroChina Lanzhou Petrochemical will keep shut. The 100kt/a LDPE unit at Sinopec Shanghai Petrochemical will keep shut. The 300kt/a FDPE unit at Shenhua Baotou Energy will be maintained. The 300kt/a HDPE unit at PetroChina Dushanzi Petrochemical will be restarted on this weekend. The 150kt/a PE unit at Shanghai Golden Phillips Petrochemical will be parked from Sep 17 to mid-October. The 250kt/a LDPE unit at Sinopce Maoming Company will be maintained for 3 days from Sep 27. The expected decreases in supply will be 13.8kt. The import volume in the next week will be stable. The overall import volume in September is predicted to be less than that in August, but the volume will be in high level.

Demand:In terms of the agricultural film, demand from shed plastic film users continued to rise, and the demand for mulching film warmed up. The number of orders and operating rates from producers increased somewhat, which would support the feedstock market.

Overall, the up stream crude oil prices kept volatile, giving limited support to the PE market. On the supply side, the overall market supply was ample. In recently, the inventory level at petrochemical companies increased. For consuming the inventory before the National Day holiday, petrochemical companies adjusted down the ex-works prices actively. From the demand side, some downstream users stocked up when the PE prices were low, but the overall market trading actively was thin. In general, petrochemical companies keep the ex-works prices stable at the end of the month, but it is not ruled out that some ex-works prices will fall further under sales pressure. The PE market will keep week next week. The LLDPE prices will be RMB 9,400-10,000/mt.

China SM Market Forecast

If the embargo on styrene through Yangtze Estuary during the 19th National Congress come into effect, the replenishment of imported resources will be impacted to a big extent. The arrivals of imports will sharply decline or the imports should be unloaded to other regions before being transported by truck. Either approach will aggravate the tight supply and arouse a new round of price rises. However, a large amount of imports will arrive intensively in November, resulting in great growth in supply. While November will be the traditional demand off season. The forward-month futures will probably face downward pressure.

International Methanol Market Review

The prices for imported methanol fluctuated downwards this week, and the negative import profit still curbed the purchasing. Earlier this week, most players held wait-and-see attitudes. Some offers for end-September to October arrival cargoes were heard at $360/mt, and a few counter offers were $340-345/mt. 15kt of late September arrival Iranian cargoes were traded at $350/mt, and 7kt of end-September to early October arrival cargoes from Venezuela were also dealt at $350/mt. A few formula-basis offers for October to November arrival cargoes were at a premium of 4%, but no deals were heard earlier this week. Later this week, more offers forimported methanol were heard, but the mainstream prices fell back, influenced by the slump in the futures prices and the worry about the October closure of navigation in Jiangsu. H1 October and October arrival cargoes were offered at $350-355/mt or a premium of 3%-3.5%. A few bidding offers were $330-335/mt. However, no deals were heard by the end of Thursday.

China Methanol Market Forecast

In the major producing areas, the methanol supply is stable, and the purchasing from local olefin plants is also steady. Thus, local methanol prices may adjust at a high level next week, and there is also a possibility for small price rise. In other inland areas, the suppliers sell goods cautiously considering high cost. However, the downstream stocking is near the end. The supplyis stable-to-rising, and some downstream plants hold high inventory levels. Thus, the trading volume can hardly increase notably. It is predicted that the prices will be in the range of RMB 2,700-2,870/mt in Shandong and RMB 2,550-2,590/mt in Inner Mongolia next week.
In the coastal areas, although the macro environment is not as good as expected, the methanol prices may mainly adjust in the range of RMB 2,700-2,950/mt next week, bolstered by the downstream rigid and speculation demand. The players are paying attention to the latest news about the regulations on the ship navigation, loading and unloading during the 19thNational Congress.

Sep 24, 2017 13:47
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