Petrochemicals: May 24-28: Butadiene increases on maintenance and strong Europe and US market
The FOB Korea benzene market softened. In Europe and the US, supply tightness was easing and the market declined from previous high levels. The CFR Northeast Asia paraxylene (PX) market decreased slightly, weighed down by a fall in profitability of derivative PTA.
The CFR Northeast Asia ethylene market decreased. As profitability of derivatives was falling, buying interest receded. Korea's LG Chem and GS Caltex were scheduled to start up new ethylene facilities in June. Since supply would become more ample, views were heard that prices might fall going forward. In trade this week, a deal for delivery to China in the second half of June was reported at $1,020/mt.
In the Asia propylene market, buying interest receded due to bearish sentiment. In Northeast Asia, two new facilities in Korea would start up from June onwards and supply was expected to increase. Further, derivative polyethylene prices softened and buying interest slackened. In Korea, Lotte Chemical bought June cargoes from overseas and in the domestic market at $1,170-1,180/mt. In Southeast Asia, Thailand's PTTGC conducted a sell tender for June loading.
The Asia butadiene market turned bullish. In Northeast Asia, spot supply was limited and sellers were inactive in spot sales. End-users, on the other hand, were unsure of future market directions and were cautious about buying. Under this situation, no deals were reported and a wait-and-see mood was strong. Nevertheless, as butadiene prices were relatively low compared synthetic rubber prices, the market was on an uptrend.