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(ICIS) -- Spot
prices of petrochemicals in Asia may get a good nudge up following an expected
virtual halt in trades next week as the region celebrates the Lunar New Year,
with most market players hoping for a strong pick-up in buying
activities.
Prices of some petrochemical products in the region have
either been falling or trading sideways since the start of the year, as demand
traditionally weakens in the weeks leading to the Lunar New Year celebration,
which is happening a bit early in 2012.
Some propylene sellers in
northeast Asia expect prices to move up, to track the rising values of feedstock
naphtha.
An expected tightness in regional supply because of a slew of
cracker turnarounds due in March should also give propylene prices a further
boost, market sources said.
Spot propylene prices were quoted at USD
1,350-1,400/tonne (EUR 1,040-1,078/tonne) CFR NE Asia at midday on
Friday, while naphtha values were at USD 960.50-962.50/tonne CFR
Japan.
In the purified terephthalic acid (PTA) market, some sellers have
taken a similar stance on transactions.
Expectations that China, the biggest petrochemical importer in Asia, will
adopt a more loose monetary policy going forward will boost trade in the
commodities market.
The upbeat sentiment that the domestic credit crunch in
the world’s second biggest economy will ease was reflected in trades at the
linear low density polyethylene (LLDPE) futures market at the Dalian Commodities
Exchange this week.
“Everything is so uncertain and we are not sure
whether demand for synthetic rubber will rebound after the Lunar New Year,” a
Chinese synthetic rubber producer said. Synthetic rubber producers in Asia are
in a bind because of high production costs caused by soaring prices of feedstock
butadiene (BD) and their inability to hike product prices amid strong resistance
from downstream tyre makers.
Soaring feedstock BD costs have climbed
to USD 3,100/tonne CFR NE Asia and have eroded the margins of synthetic
rubber producers in Asia.
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