Spot prices fall on sluggish demand and ample supply
Ample supply and sluggish demand continued to pressure prices downwards this week.
The availability of deep-sea product from Russia, Turkey, Mexico and the US weighed down buying indications.
Downstream acrylic fibre (AF) plants in China and India were running at reduced rates, with several plants in India heard running at around 50% of production capacity.
Market sentiment was bearish amid rising concerns over the US debt impasse and a potential default. The US is a major export market for downstream AF and acrylonitrile-butadiene-styrene(ABS) makers in China.
Northeast Asia
Spot trades were heard done at $2,300-2,350/tonne CFR NE Asia for late July and early August shipments. Asian cargoes were heard sold to Chinese traders at $2,320/tonne CFR NE Asia for late July shipment.
Ample supply in Asia had curbed Chinese buying interest for deep-sea ACN imports. Spot offers for deep-sea product above $2,300/tonne CFR NE Asia met with limited interest, given that it takes about 4-6 weeks for the cargo to arrive.
Demand remained subdued as the downstream AF plants in China were running at 80% of production capacity.
Chinese domestic ACN prices softened by yuan (CNY)100-200/tonne to CNY19,200-19,300/tonne ex-tank.
India
Spot prices fell to $2,250-2,300/tonne CFR India on weak demand and ample supply. Indian buying interest was subdued, with several downstream AF plants operating at reduced rates of about 50% of capacity.
Weak downstream AF prices had curbed Indian spot appetite. Downstream AF prices were heard hovering at $2.85-2.90/kg but were expected to fall to $2.80-2.85/kg in August, given the weak market sentiment.
Traders with cargoes-in-hand were heard offering material at $2,250-2,300/tonne CFR India but buying interest was limited. Buying indications dropped below $2,200/tonne CFR India, with several downstream AF makers saying they were covered for August and had limited spot appetite.
Contract
Major Japanese ACN producer has revised its FECP nomination for August down by $100/tonne to $2,550/tonne CFR Asia. Its July FECP was $2,650/tonne CFR Asia.
US July chemical grade propylene (CGP) contracts settled down by 4 cents/lb to 76.50 cents/lb. June CGP contracts were settled at 80.50 cents/lb.
The European propylene July contract price settled at €1,130/tonne FD NWE, down by €75/tonne from June.
Production news
PTT Asahi Chemical has delayed the start-up of its new 200,000 tonne/year acrylonitrile (ACN) plant in Map Ta Phut, Thailand, to August from July.
Japan's Asahi Kasei has reduced the operating rate of its 150,000 tonne/year ACN unit at Kawasaki by 30%, a company source said.
China’s Qilu Petrochemical has achieved full operating rate at its newly expanded 80,000 tonne/year ACN plant in Zibo city, Shandong province.
The producer shut the ACN plant in mid-April to expand its capacity from 40,000 tonnes/year to 80,000 tonnes/year and restarted it in mid-June.
China’s Shanghai Petrochemical, a subsidiary of Sinopec, has resumed production at its 130,000 tonne/year ACN plant at the end of July after shutting down on 15 June for maintenance.
China’s Jilin Petrochemical, a subsidiary of PetroChina, is running three lines currently at full rates after restarting them in stages in July. One 106,000 tonne/year line is still shut.
The company has four ACN lines, two with capacities of 120,000 tonnes/year each and two with 106,000 tonnes/year each. The company shut all four ACN lines on 20 June for maintenance.
($1 = CNY6.44)
This week on ICIS news ( www.icis.com):
29-Jul-11 08:25 Japan’s Marubeni fiscal Q1 net profit for chemicals soars to Y2.05bn
29-Jul-11 07:03 Thailand's IRPC Q2 net profit more than doubles on higher prices
29-Jul-11 06:29 Asia benzene hits three-month high on rising prices in US, styrene
29-Jul-11 06:22 InterviewUS Huntsman sets up textile effects production unit in Pakistan
28-Jul-11 04:55 FocusAsia BD prices may fall further in August as demand slackens
