Asian ** market is expected to boost in the second half of the year

According to reports, industry sources said last week that with the start-up of several new phenol plants in China in the second half of the year, Asian demand will be boosted, and the operating rate of equipment in the region will also increase. Ewe Ee Foong, vice president of ICIS Consulting Asia in Asia, said at the ICIS Asian Chemicals Market Symposium held in Seoul: “The low utilization rate of equipment in Asia** at the beginning of this year is expected to improve by the end of the year, and production in Northeast Asia will increase. Some 5.5 million tons in the first quarter surged to nearly 5.8 million tons at the end of the fourth quarter of this year."

According to market sources, the phenol production in the Chinese market will increase significantly in 2015, and three world-scale phenol/** units will be built in the first quarter. The three new installations increased the phenol production capacity in China by 46% to 2.53 million tons per year. At the same time, the average utilization rate of equipment in Northeast Asia is expected to rise steadily, from about 77% in the first quarter of this year to about 80% in the fourth quarter.

According to Ewe Ee Foong's report, compared with the same period of last year, the demand for pure benzene from downstream styrene grew at a low rate because of the weak demand for polystyrene and styrenic resin in China. According to the ICIS data, due to the high inventory levels in April, China's spot demand for pure benzene has slowed down and prices have been suppressed. Afterwards, the price of pure benzene in Asia is expected to increase. With the improvement in the demand for styrene monomer in the downstream of May, many styrene producers in the region will gradually complete the overhaul of the equipment, thus driving the demand for benzene to warm up.

According to the ICIS analysis, the profitability of the local styrene plant was improved in the second quarter due to the profitability of the downstream industry in Taiwan, which is expected to drive the activity of pure benzene spot trading. In other aromatics markets, Asia's toluene prices will continue to follow the trend of downstream p-xylene (PX) in the second quarter of this year, because the price gap between PX and naphtha will narrow, and this correlation may be weakened. The Asian toluene market players are still basically positive about June price hikes, and most of them are hoping that the Chinese market will drive buying. However, other market participants are cautious and believe that the downstream market is unlikely to drive a sharp rise in prices.

As for the PX market, most market participants believe that the current PX spot price trend is mainly influenced by the downstream PTA prices and market sentiment.