LOS ANGELES
,
April 1, 2022
(Industry Intelligence Inc.)
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US Resins During the week of March 21, US PE prices reached their highest point thus far in 2022 as logistic issues and warehousing backlogs continue. Still, producers are holding off on releasing their excess supply to market, instead building up their inventories and enjoying the continued high pricing. A US$0.04/lb PE contract increase for March is expected to go through. Proposed increases for April range $0.06-$0.07/lb. Meanwhile, PP supply remains strained, bringing spot prices up by about $0.12/lb since the start of the year. One major producer has announced an additional $0.04/lb increase between March and April. Rising prices are partly supported by increasing polymer-grade propylene, which has risen $0.20/lb since the start of 2022. Another contract increase of $0.08-$0.10/lb is on the table for March. The primary source of this information is Plastics Today. Japan’s naphtha-fed steam crackers have been gradually reducing their operating rates, dipping from 97.4% in December 2021 to 92.4% in February 2022, according to data from the Japan Petrochemical Industry Association. In addition, about 37% of Japan’s steam cracking capacity was offline for maintenance during March. As more capacity comes back online, crackers may further reduce their operating rates in response to the downward pressure on their margins. Feedstock naphtha averaged US$1,012.40/tonne through March, compared to January’s average $769.86/tonne. Market players declined to make definitive predictions due to volatility in upstream materials, but expect ethylene supply to improve as more crackers return to operations. Meanwhile, downstream products such as HDPE and MEG face negative margins. HDPE film margins were calculated at negative $300/tonne on March 28, while MEG margins were at negative $265/tonne. The primary source of this information is S&P Global Platts. Chinese propane dehydrogenation operators grapple with rising LPG feedstock costs, leading at least one plant to suspend operations. Tianjin Bohai Chemical shut a 600,000-tonne/year plant in North China on March 23 due to poor margins. The company plans to restart the facility on April 7. Propane prices hit their highest level in nearly a decade on March 7 at US$1,029.50/tonne CFR North Asia. Overall, China’s PDH plants operated at an average of 80% capacity in February. The primary source of this information is S&P Global Platts.
Japan Petrochemicals
China Propylene
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