Deals/discussions for the week ended 29 July
$1,100-1,120/tonne FOB NE Asia, 1 lot, any Aug loading, no details
$1,150/tonne CFR Taiwan, 1 lot, Aug arrival
Selling ideas: $1,180-1,200/tonne CFR NE Asia
Buying ideas: close to $1,150/tonne CFR NE Asia
Selling ideas: $1,250-1,260/tonne CFR SE Asia
Buying ideas: high $1,100s-1,200/tonne CFR SE Asia
Ethylene market players sidelined, all eyes on Formosa
Discussions generally took a backseat this week following news that a fire had broken out at a hydrogen pipeline in the vicinity of Formosa Petrochemical Corp’s (FPCC) petrochemical complex in Mailiao.
Some buyers in Taiwan had already bought spot cargoes before this incident because of upcoming cracker turnarounds next month. FPCC is slated to shut its 1.2m tonne/year No 3 cracker in Mailiao for a 40-45 day turnaround in mid-August. CPC Corp also plans to shut its 500,000 tonne/year cracker in Kaohsiung during the same period.
FPCC had earlier planned to restart its 700,000 tonne/year No 1 cracker in Mailiao at the end of the month following an outage in May to prevent any feedstock shortage before its 1.2m tonne/year No 3 cracker is shut for a turnaround. However, market sources said the cracker restart will be delayed because of the incident, and they are awaiting more clarity regarding the situation. As such, both buyers and sellers were generally sidelined during the week.
On the Middle East front, one 9,000 tonne spot parcel was heard to have arrived into the region but it was not clear where the cargo has landed. Possibilities raised included China and southeast Asia but the buyers could not be located. It also remains a mystery whether the cargo has been sold or not. Some said the landed cargo was being offered in the low $1,100s/tonne CFR Asia although this also could not be confirmed.
Another similar-sized spot parcel from the Middle East is expected to be loaded soon and some end-users in the region said they were asked by traders if they could receive the cargoes in the middle to late August. Discussions have been hindered mainly because of the large cargo size.
Other market participants said this cargo may eventually go to Europe, where prices are on the rise.
In derivative markets, high density PE (HDPE) rose by $20/tonne to $1,380-1,430/tonne CFR NE Asia, while polyvinyl chloride (PVC) edged up by $10/tonne to $1,100-1,110/tonne CFR China this week.
Northeast Asia
Spot prices gained $10/tonne, reflecting buy-sell ideas in the absence of trade.
One spot cargo was heard sold at $1,150/tonne CFR Taiwan for August arrival but further details were not available and the parties involved could not be reached for comment. Another deal was also heard done at above $1,150/tonne CFR Taiwan but there were also no further details.
Selling ideas were heard at $1,180-1,200/tonne CFR NE Asia. Selling indications for a Middle East cargo arriving around middle to late August were heard at $1,180/tonne CFR NE Asia. Some said the cargo was also offered on a formula basis referencing a mix of published CFR NE Asia and CFR SE Asia numbers.
Another 2,300 tonne regional cargo for August arrival was heard available for sale at $1,200/tonne CFR NE Asia but buying interest was heard at close to $1,150/tonne CFR NE Asia.
Buying interest from the key China market remains muted because most of the end-users have sufficient cargoes and are not looking for spot material. The recent turnarounds and outages at several derivative plants in the country also saw some end-users deferring the delivery of their term cargoes. As such, this was partly responsible for the limited spot discussions.
In the FOB NE Asia market, one regional cargo was heard sold within the above published range for August loading but further details were not available.
Southeast Asia
Spot prices are assessed in a tighter range to reflect discussions in the market. Most end-users are covered for August while September discussions have yet to begin.
Selling indications were heard as high as $1,250-1,260/tonne CFR SE Asia while buying ideas ranged from the high $1,100s/tonne to $1,200/tonne CFR SE Asia.
One potential buyer said it received selling ideas for a Middle East cargo at $1,200/tonne CFR SE Asia for arrival in the second half of August but was confident of purchasing the cargo at below $1,200/tonne CFR SE Asia. However, limitations in receiving this cargo hindered discussions, the buyer said.
No deals were heard in the FOB SE Asia market.
Contract pricing in Taiwan
June settlements were heard settled at below $1,300/tonne although this could not be immediately confirmed with the producer. May – $1,387/tonne. April – $1,405/tonne. March – $1,344/tonne tonne. February – $1,300/tonne. January $1,252/tonne.
Freight rates
Intra southeast Asia spot freight rates were heard at $60-80/tonne.
Intra northeast Asia spot freight rates were at $70-80/tonne.
Southeast Asia to northeast Asia spot freight rates were heard at around $100-150/tonne.
Production news
China’s Zhongyuan Petrochemical – a subsidiary of Sinopec – is planning to restart its cracker and derivative plants at Puyang in Henan on 20 September after the facilities were shut for maintenance and expansion in early May, a company source said. The nameplate ethylene capacity of the cracker is expected to be increased to 300,000 tonnes/year from 180,000 tonnes/year.
Japan’s Mitsui Chemicals plans to restart its 617,000 tonne/year naphtha cracker in Chiba on 29 July following a turnaround this month, a company source said on Thursday. The cracker was taken off line on 1 July for scheduled maintenance.
South Korea’s Daelim Industrial said it has won a $920.3m (€635m) contract to build the main mixed-feed cracker for what will be the world’s single largest petrochemicals construction project.
The cracker will be able to produce 1.5m tonnes/year of ethylene and 400,000 tonnes/year of propylene and will be used to feed a $20bn petrochemical complex being built at Al-Jubail on Saudi Arabia’s Gulf coast by Sadara Chemical Company, a joint venture between state energy giant Saudi Aramco and US company Dow Chemical.
Discussions for the week ended 22 July
$1,260/tonne CFR SE Asia, 1 lot, H2/ late Aug arrival
1-2 cargoes sold on formula to Taiwan, H2 Aug arrival
$1,210/tonne FOB SE Asia, 3,000-3,500 tonnes, mid/H2 Aug loading, confirmed
$1,200/tonne FOB SE Asia, 3,000-3,500 tonnes (2 lots), H2 Aug loading, done week of 15 Jul, confirmed
Selling ideas: $1,170-1,200/tonne CFR NE Asia
Buying ideas: low to mid $1,100s/tonne CFR NE Asia
Buying ideas: $1,150-1,200/tonne CFR SE Asia
This week in ICIS news:
28-Jul-11 04:46 Japan’s Mitsui Chemicals eyes Chiba cracker restart on 29 July
27-Jul-11 16:46 S Korea's Daelim to build $920m Sadara cracker in Saudi Arabia
27-Jul-11 11:40 Qatar’s Qatofin shuts Mesaieed LLDPE plant on cracker issues
27-Jul-11 08:39 China’s Zhongyuan Petrochemical to restart Puyang units in late Sep
27-Jul-11 04:52 Taiwan's Formosa may delay restart of No 1 cracker after fire
