Asia's benzene and toluene prices to slide from October

(ICIS) -- Asia's benzene and toluene prices are expected to slide from October on the back of increased supply after a turnaround season and slower demand from downstream sectors, traders and producers said on Friday.

Prices of benzene were steady on Friday morning at USD 1,150-1,155/tonne (EUR 805.00-808.50/tonne) FOB (free on board) Korea, while toluene prices were unchanged from Thursday at $1,130-1,140/tonne FOB Korea, according to ICIS data.

Benzene prices in Asia could soften from October when demand from the styrene monomer (SM) sector is expected to decline as the seasonal peak production period comes to an end, said traders.
Benzene supply, which is tight at present, is expected to mount from October following the end of turnarounds at GS Caltex's No 1 aromatics and JX Nippon Oil's Mizushima-based facilities, traders said.

MRC

(MRC) -- Long-run declining LDPE prices began growing unexpectedly for many Russian market players. Volatility of PE supplies, which caused these changes, may lead to further price increase, according to ICIS-MRC Price report.

In June on the back of excess LDPE supplies to the Russian market, LDPE prices gradually went down. Demand for finished films this summer did not meet market players' expectations. Last year record hot summer provided a significantly high consumption of finished films in many sectors, such as shrink films.

Low demand for LDPE, as a result of low demand for finished films, as well as an excess PE supplies in the Russian market in mid-August resulted in decrease of 158 LDPE prices to RUB 54.500-57.500/t, including VAT, CPT Moscow.

Scheduled shutdowns of Tomskneftechem in July-August and Ufaorgsyntez in late August resulted in reduction of LDPE excess in Russia. However, the main driver in the current price rise was ethylene shortage at Kazanorgsyntez which affected reduction of LDPE supplies to the domestic market in late August.

MRC

(MRC) -- PET granulate prices for September remain unchanged in the Russian market due to a weak demand amid oversaturated market, according to ICIS-MRC Price report. Despite quotations growth in Asia, Russian producers do not raise PET prices in the domestic market. The main reason is weak demand from PET converters.

In August ongoing slumping sales forced regional producers to produce to stock. According to market players, there is no use to rise granulate prices. Today PET prices of Russian production make RUB 59.000-62.000/t, including VAT, CPT Moscow. Increased feedstock prices in Asia also make traders thin margins. Prices of Asian polyethylene terephthalate make RUB 59.000-61.000/t, including VAT, CPT, Moscow.

According to market players, at the moment PET demand is weak amid oversaturated market. Further cutting of prices will not boost demand, but will just lead to financial losses. That is why many market players say about necessity to raise granulate prices - to ensure the minimum required level of profitability. According to MRC analysts, in early September growing TFA prices in Asia and Europe will force some Russian producers to increase PET prices around by RUB 1.000/t.

MRC

(ICIS) -- German major BASF faces volume growth pressure and declining petrochemical margins in 2012 because of deteriorating economic conditions, Bernstein Research said on Thursday. Based on this outlook, Bernstein downgraded the company to ⌠market-perform from ⌠outperform and dropped its target share price to EUR 56 (USD 80) from EUR 74.

BASF's chemicals ⌠Verbund part of its business - chemicals, plastics, performance products and functional solutions - will be most at risk, the analysts said.

⌠We believe that chemicals Verbund' volume growth and petrochemicals margins, which were key reasons for our outperform rating, will come under pressure in 2012 due to deteriorating economic conditions, Bernstein said in its research note.

MRC

(ICIS) -- China's purchasing managers' index (PMI) rose by 0.2 percentage points from July to 50.9% in August, according to the China Federation of Logistics & Purchasing (CFLP) on Thursday.
This is the first time the PMI has rebounded after declining for four consecutive months, raising expectations that the Chinese economic recovery is gradually stabilising, said Zhang Liqun, an analyst from CFLP.

Among the PMI sub-indices in August, the new order index remained stable at 51.1% in July, while the country's production index increased by 0.2 percentage points from July to 52.3%, according to official data from CFLP.

The slight increase of 0.2 percentage points stopped the consecutive decline of China's PMI. In addition, the increase shows that the manufacturing sector has rebounded despite the government's tightening monetary policy and slowing global economic growth, said an analyst from Zhicheng Securities.

Meanwhile, China's increasing purchasing index showed that cost pressure still weighs on small and medium-sized enterprises, Zhang added.

MRC