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Platts Snapshot


Asian petrochemical H1 outlook: Aromatics in focus

With Gustav Holmvik, Team Leader, Asian Petrochemicals

February 01, 2018 03:00:41 EST (3:17)

Many of Asia’s petrochemical markets have put behind them a good year for producers, who have mostly been seeing good margins for their products. But there are some dark clouds appearing on the horizon.


In this video, Gustav Holmvik, Team Leader - Asian Petrochemicals, looks at the factors that could affect the region's aromatics market, including expansions in China, plant shutdowns, as well as anti-dumping investigations.

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Download S&P Global Platts: Asian Petrochemical Outlook H1 2018

Equities and crude oil prices have surged at the start of 2018 - but will Asian petrochemical markets follow suit? And will the Year of the Dog see the tides of Chinese imports turn, and see the Asian giant start to increase its export volumes? Many challenges and opportunities face these markets in the year to come, such as the potential for anti-dumping duties and rising cost of production.

Read this special report by the Asian Petrochemical Team to learn more about the outlook in Asia for the year ahead.

Download report


Video Transcript


Asian petrochemical h1 outlook: Aromatics in focus

By Gustav Holmvik, Team Leader, Asian Petrochemicals


Welcome to The Snapshot, a series examining the forces shaping and driving global commodities markets today.


Many of Asia’s petrochemical markets have put behind them a good year for producers, who have mostly been seeing good margins for their products. But there are some dark clouds appearing on the horizon -- supply is increasing both internationally as well as within the key import market China. And crude oil prices have risen to above $70/barrel in January.


Benzene and paraxylene feedstocks such as toluene and mixed xylenes have seen large expansions in China in 2017, which in part have led to lower imports of those products by the Asian giant. But, this could be good news for producers of benzene and PX. Could new tax rules being implemented by China in March bring MX and toluene back into favor for Chinese importers? That’s something we’ll be watching out for.


Paraxylene, a key market in Asia, has recently seen its demand boosted by restarts of idled PTA plants in China. Going forward supply could be snug amid several paraxylene plant maintenance shutdowns. But new plants are expected to start production soon in the Middle East and Southeast Asia, adding more supply to the market.


However, the biggest threat is yet to come. Chinese PTA producers are building their own paraxylene plants. When these juggernauts start production - some possibly from the end of this year - the paraxylene market may start to change in a dramatic way.


In benzene, another key market, the expansion of downstream capacities in China and its growing appetite for benzene as a feedstock is expected to remain as the main market driver this year. New styrene monomer and caprolactam plants will form the bulk of the new demand, estimated to increase by up to 1 million mt in China in 2018. However, Asia remains long on benzene and therefore sellers will continue to seek out arbitrage opportunities to the US Gulf Coast.


Now, we mentioned new capacities of styrene monomer coming up in China. Ahead of this, Chinese styrene producers have set in motion an anti-dumping investigation against styrene imported from South Korea, Taiwan and the US. The market is still grappling with the possible implications of the potential anti-dumping duty, expected to be announced in February.


We take a look at these and other factors moving the Asian aromatics market this year in our 2018 outlook report for Asian petrochemicals. This report may be downloaded for free on Platts.com.


Until next time on the snapshot – we’ll be keeping an eye on the markets.





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