Chinese prices firms on tight supply
The spot prices of acrylates in the key China market continued to gain ground during the week ended Wednesday, as local suppliers maintained strict price discipline and raised their offers while citing lean inventories. The tight availability of spot molecules because of preceding and ongoing turnarounds at several domestic facilities exacerbated the situation, they added.
Taiwanese major Formosa Petrochemical Corp (FPCC) shut its 540,000 bbl/day refinery in Mailiao in the wake of a fire during the weekend. The producer subsequently declared a force majeure on all grades of petroleum products on 2 August.
No damage was reported on the 100,000 tonne/year crude acrylic acid (CAA) unit, which is located in the same complex. Operating rates were maintained at 100%, a company source said.
However, this development failed to lift market sentiment as demand from the downstream super absorbent polymer (SAP), adhesives, paint and coatings segments is stable. Chinese end-users expect the snug supply to ease soon as a number of plants have recently been restarted.
Furthermore, most buyers preferred to adopt a cautious stance as they are increasingly concerned about the debt crisis in the US and eurozone and how it could potentially slow down business activity in the near term.
Participants agreed that the bulk of transactions were concluded on the local front, while imports deals remain sporadic.
As the outlook for FPCC’s operations remains uncertain, regional producers are worried that a longer-than-expected disruption to feedstock supply could cause raw material costs to rise further and increase their cost pressure. Sellers said that there will be no choice but to pass on the higher costs down the supply chain.
Meanwhile, in southeast Asia, the bearish sentiment in the west has taken a toll on the take-up rate, suppliers said. Buyers in Indonesia and Malaysia reiterated little appetite for fresh material as consumption is low amid the Muslim fasting month of Ramadan in August.
In addition, sources said that there was availability of deep-sea parcels from the US in the region and that exerted further downward pressure on acrylates prices.
GAA
Discussions for GAA imports in drums for August shipment to China were at $2,650-2,700/tonne CIF CMP. Other selling indications at above $2,750/tonne CIF CMP were snubbed by buyers.
On the local front, GAA prices rose by yuan (CNY) 100-300/tonne to CNY19,800-20,200/tonne DEL, in line with firmer offers. Suppliers insisted that there was no pressure to offload material because their inventories are lean.
In contrast, the prices of GAA in drums were assessed as lower at $2,700-2,780/tonne CIF SE Asia, down by $70/tonne at the high end of the price range. Sellers attributed the weaker buying sentiment from the derivative SAP sector as key reason for the decline in prices.
BA
BA bulk imports in China for August delivery were booked at $2,630-2,650/tonne CIF CMP. Another northeast Asian supplier was heard to have concluded material in iso-containers and drums at $2,650-2,700/tonne CIF CMP.
In the eastern part of the country, BA prices for bulk material gained CNY200/tonne to settle at CNY19,500-19,800/tonne DEL, supported by healthy demand and snug supply.
Weak demand in southeast Asia led BA spot prices for August parcels to drop to $2,700-2,800/tonne CIF SE Asia, down by $50/tonne week on week. The majority of regional sellers agreed that it was difficult to conclude fixtures at above $2,800/tonne CIF SE Asia.
Separately in India, bulk parcels, which are subject to import duties, were sealed at $2,650/tonne CIF India for August shipment.
EA/MA
Trade for EA and MA imports in China remains muted as most buyers reiterated no appetite for regional parcels and continued to favour local material. Hence, in the absence of trade, EA and MA spot prices are assessed as stable at the published range, in line with buying and selling notions.
Activity in the domestic market was equally subdued. Bulk EA and MA parcels were heard to have changed hands at CNY17,700-18,300/tonne and CNY17,400-17,500/tonne DEL, respectively.
The low take-up rate for EA and MA parcels in southeast Asia led sellers to reduce their offers. Sporadic fixtures and discussions were at $2,500-2,600/tonne and $2,450-2,500/tonne CIF SE Asia, respectively, down by $70-150/tonne from the previous week.
2EH-A
Regional parcels in China were transacted at $2,700-2,730/tonne CIF CMP for August delivery. Suppliers said the demand from end-users is weak.
In contrast, local prices rose by CNY100-300/tonne to CNY20,500-20,800/tonne DEL as suppliers raised their offers in tandem with the rising feedstock 2-EH costs.
The prices of spot 2EH-A trade in southeast Asia dropped by $100-130/tonne to $2,750-2,850/tonne CIF SE Asia, weighed down by the poor buying sentiment.
($1 = CNY6.44)
This week on ICIS news ( www.icis.com) :
02-Aug-11 10:45 South Korea’s KCC runs joint venture polysilicon plant at 100%
02-Aug-11 10:44 Taiwan’s FCFC runs Mailiao phenol-acetone plant at full capacity
02-Aug-11 09:29 NewsFlashInitial Europe August PX settles up at €1,120/tonne
01-Aug-11 10:42 China’s PP market sentiment strengthens following Mailiao pipeline fire
01-Aug-11 10:28 China’s Sichuan Yongxiang boosts polysilicon ops, eyes expansion
