Mixed Middle Eastern petrochemical markets; some offers increase amid blackouts in the United States


SINGAPORE (ICIS) – Petrochemical markets in the Middle East are mixed, with polyethylene terephthalate (PET) posting good sales to the Americas following Hurricane Ida, and polyethylene (PE) and polypropylene ( PP) increased amid a shortage of supplies from Saudi Arabia.

Some markets in the region are in a lull, however, in part due to high freight rates for shipments from Asia and continued uncertainty over shipping logistics.

For now, sales of PET freight to the Americas from the Gulf Cooperation Council (GCC) are healthy amid tight supply in the Americas.

DAK Americas has declared a Force Majeure (FM) event at its US plant as a result of Hurricane Ida, in addition to existing production shutdowns in the Americas, including the Indorama plant in Brazil.

Hurricane Ida struck the U.S. Gulf Coast on August 29, with Louisiana, a petrochemical hub, bearing the brunt of the force.

GCC’s offerings for PET to the GCC region were supported by good sales against a backdrop of improving net revenues in the Americas.

For September PE and PP cargoes, offers in the Eastern Mediterranean markets increased due to lack of supplies from Saudi Arabia.

A power outage in Saudi Arabia in early August interrupted production of Jubail’s main PE and PP units.

For the Middle East Toluene Diisocyanate (TDI) market, demand has gradually improved, supporting higher offers driven by high freight costs from Asia.

Some producers started offering shipments in October, but changes in sourcing fundamentals are expected as some Asian suppliers forecast fourth quarter turnarounds.

For Middle Eastern polyols, demand has been moderate as buyers are under no pressure to purchase material.

Some sellers in Northeast Asia have made offers to capture high freight costs from Asia to the Middle East and also to reflect firmer commodity prices this week in China.

For polystyrene (PS), the market is currently relatively calm as demand from the packaging and construction industries has stagnated for a few weeks.

Demand is expected to accelerate in the fourth quarter, when more tourists will be allowed to visit the Middle East.

For base oils, Group I supply from Iran is expected to remain stable, while Asian bulk supply of Group II to UAE is expected to increase.

Demand in the Middle East could improve, but slowing auto sales could dampen the recovery.

Known turnarounds at regional base oil plants are few, with spot supplies for Groups I and II improving, albeit slowly.

Flagship article of Felicia Loo

Additional reporting by Hazel Goh, Damini Dabholkar, Veena Pathare and Izham Ahmad

Photo: At Hamad Port in Doha-Qatar on June 14, 2017 (By Noushad Thekkayil / EPA / Shutterstock)

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