Asian petrochemical markets expected to slow down in Oct
September 25, 2009 - Asia
Industry resources and analysts aver that, with National Day holidays just round the corner, a significant slowdown can be expected in sales of petrochemical goods, more so, to do with the continuous fall in prices of key petrochemical products.
Chinese National Day holidays will be from October 1 to 8 and the entire Chinese market will be closed in that period and the likelihood of a strong recovery in demand after the holidays, does not seem in sight, observe the experts.
Since July, Asian propylene prices fell for the first time below the psychological mark of US $1,000 per ton (CFR China), due to strong resistance from buyers before the holidays. Surplus floating stocks of propylene continues to increase.
While at the same time demand from downstream manufacturers of acrylonitrile, propylene oxide and phenol in downstream industries is projected to decline in October. Overall transactions of styrene-butadiene rubber (SBR) in Asian markets have also weakened.
Meanwhile, spot transactions of benzene and toluene in Asia market have fallen; because most of the demand has been covered by long-term contracts as the holiday are approaching.
Market participants say, they hope that the price has bottomed out and expect a price rebound after China’s holidays. Over the past two weeks, toluene price (CFR China) has dropped by US $20-40 per ton to $760 per ton CFR China on Wednesday.
Market transactions of propylene glycol also have synchronized to a slow down, but price has shown an upward trend since August due to tight supply. Ex-factory price of propylene glycol in China was quoted at 10,300-10,500 Yuan per ton.