Asian Petrochemicals: Key market indicators | S&P Global Platts

Asian Petrochemical markets are experiencing high volatility, following the price crash in the upstream oil sector, with most downstream prices in petrochemicals are under pressure.

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With the new Omicron variant of the coronavirus, the markets are monitoring closely on the development of global downstream demand changes.


** Sentiment remains bearish on eroded upstream and downstream margins. Some crackers in Northeast and Southeast Asia have reduced run rates, while several downstream facilities have cut operating rates amid weak profitability.

** Spot offers are likely to remain thin due to a lack of vessel space. The ongoing river port congestions in China have limited vessel availability for months, and several market sources have said this is expected to continue into early 2022.

** Supply expected to lengthen in view of lackluster demand. Active inquiries are few, with most buyers saying contractual volumes were sufficient amid operating rate cuts.


** Asian polyethylene prices were stable in the week to Nov. 24. The demand for PE remained positive in 2022 despite the effect of the coronavirus crisis, as packaged goods contributed to overall strength.

Recycled PE

** The outlook was stable, as Asian recycled low-density polyethylene prices were stable amid thin trading. Liquidity remained thin due to a lack of raw material


** Asian PP prices are expected to stay under pressure due to bearish sentiment, lackluster demand and increasing sales pressure for some Northeast Asia PP sellers.

** Trade participants are closely monitoring the upstream feedstock cost, hoping the fall in raw materials could lend some support on PP profit margins.

** New monthly offers from the Middle East will drives prices in South Asia this week. Offers are expected to be lower than last month amid a general bearish sentiment in Asia.

Monoethylene Glycol

** More US and Saudi monoethylene glycol supply to Asia was expected, given EU antidumping duty investigations against the countries and new capacities in the US, sources said. Asian monoethylene glycol was assessed stable in the week ended Nov. 26 on prevailing discussions.

Purified Terephthalic Acid

* Asian PTA prices are likely to take cues from upstream oil and paraxylene prices in the week starting Nov. 29 amid unclear directions.

* Overall Chinese PTA sentiment is weak, as sources expect demand to slow down soon after a major few polyester producers announced plans to cut operation rates due to poor sales, sources said.

* Buyers are likely to remain cautious this week amid volatile crude prices. Most buyers are also covered until December with not much pressure to buy.


** Chinese methanol prices are expected to trend higher during the week if Iran cuts natural gas supply from its industrial sector and diverts it to household heating, thereby limiting methanol production.

** In South Korea and Taiwan, healthy demand from higher-end applications is expected to keep methanol prices supported in the coming weeks.

** In India, prices will likely remain stable in the week with term contract negotiations for 2022 underway.


** Toluene could see more downward pressure amid slow demand, tepid spot discussions this week as most buyers are well-placed through the year-end, sources said.

**Term contract negotiations are continuing to be delayed with the freight component being a major factor. Crude sell-off over the weekend continues to pressure prices further on toluene.

** Term sellers are waiting for one another to finalize their own contracts, sources said. No one wants to be the first to lock in for 2022 amid the highly volatile and fluctuating upstream prices, sources added.


** The Asian benzene market will be looking for direction in the US benzene market as well as China’s benzene and styrene markets this week after prices tumbled at the end of week to Nov. 27.

** The Chinese market sentiment appears weak at the moment with benzene inventory recently seeing an increase, and downstream styrene monomer physical and futures prices under pressure.

Styrene Monomer

** The Asian SM markets are expected to be under pressure following the weak upstream prices and ample supply.

** Buyers are likely to hold back amid uncertain outlook from the demand side due to the new Omicron variant of the coronavirus.


** Fundamentals-wise, bearishness in isomer-MX may continue in the medium-term, given that demand for both PX production and gasoline blending has not been upbeat, according to sources.

** While lower demand for MX cargoes is seen contributing to the bearish sentiment, the market is also likely to track the recent volatility in crude on the back of the new Omicron variant of the coronavirus.


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