Market players told SSESSMENTS.COM that positive sentiment is ongoing in the Northeast Asia propylene market. The bullish trend is driven by China market after government relaxes lockdown measure across the country with the latest price recorded at $748-754 on CFR Basis on May 13. Starting from April 21, propylene prices have been gradually moving in an upward movement. Moreover, a series of planned turnarounds in China at local producers’ cracker unit further support the hikes.
International market developments also influenced Northeast Asia propylene market dynamics, SSESSMENTS.COM noted. The rise in crude oil prices is driven by the decision of OPEC and its allies for extended supply curbs, with production slashed by 9.7 million barrels per day in May and June, in addition to U.S. crude inventories unexpectedly moving down as according to the U.S. Energy Information Administration report. Brent crude futures rose 6 cents, or 0.2%, to $29.25/barrel while West Texas Intermediate (WTI) crude futures were up 8 cents, or 0.3%, to $25.37/barrel. All numbers are recorded on May 13, U.S. time.
While crude oil prices have risen in the past two weeks as some countries lifted coronavirus restrictions and lockdowns, caution was issued by analysts that prices may fall back as a result of the second wave of COVID-19 cases. In China market, SSESSMENTS.COM recognize anticipation of increase spot supply as Tianjin Bohua, the country’s major propane dehydrogenation plant, restarted on May 7 and expected to reach full production rate this week. Despite prospects on higher spot propylene supply and second wave of COVID-19 cases, prices continue to edge higher on both CFR China and FOB Korea basis. Propylene price on FOB Korea broke above $700/ton threshold on May 11 while CFR China on May 6.
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