SINGAPORE--Styrenic resin values in China are expected to rebound ahead of other petrochemical goods after the Beijing Olympics on 8-24 August, industry players said on Wednesday.
Resins traders said they expected pent-up demand to combine with traditional peak demand and manufacturing season in the third quarter to drive a sharp rebound in prices.
State-imposed transport and trade controls in a bid to stem pollution and improve air quality ahead of the Olympics had hurt the petrochemical sector by curbing output and limiting deliveries.
Manufacturing had been particularly low key ahead of the Olympics as several plants were shut during July and will remain closed throughout August.
With successive price hikes for most resins from May to July severely eroding margins for finished goods, moulders had either cancelled orders or started re-negotiating with overseas clients to increase prices, a trader in southern China said.
Most moulders would have spoken to their clients about price hikes by September and this was likely to accelerate manufacturing to meet the year-end holiday demand, he added.
Trading in the acetic acid, phenol, acetone and methanol markets is also expected to pick up as transport restrictions are lifted and normal cargo routes are reopened after the Beijing Olympics ends in late-August.
However, styrene butadiene rubber (SBR) players in Shandong province were less optimistic about the impact of the resumption of cargo routes.
Olympics related transport and other regulations were not the key factors for suppressed market conditions, a Shandong-based SBR trader said, adding that the key issue that couldn t be changed or ignored were skyrocketing feedstock prices.
Feedstock butadiene values surged beyond $3,000/tonne in the past year, bolstered by tight crude C4 supply and soaring crude and naphtha prices.
High inventory levels and weak downstream demand also clouded the post-Olympics outlook for the olefins and polyolefins markets, industry sources said.
The current polypropylene and polyethylene inventory levels are really high, a Shanghai-based trader said.
What is going to happen after the Olympics is that sellers will scramble to offload all these built up stock. I do not think the market will recover so soon, he added.
While prices seeming to reaching a bottom, traders were unwilling to commit on when values may rebound for polyolefins.
Resins traders said they expected pent-up demand to combine with traditional peak demand and manufacturing season in the third quarter to drive a sharp rebound in prices.
State-imposed transport and trade controls in a bid to stem pollution and improve air quality ahead of the Olympics had hurt the petrochemical sector by curbing output and limiting deliveries.
Manufacturing had been particularly low key ahead of the Olympics as several plants were shut during July and will remain closed throughout August.
With successive price hikes for most resins from May to July severely eroding margins for finished goods, moulders had either cancelled orders or started re-negotiating with overseas clients to increase prices, a trader in southern China said.
Most moulders would have spoken to their clients about price hikes by September and this was likely to accelerate manufacturing to meet the year-end holiday demand, he added.
Trading in the acetic acid, phenol, acetone and methanol markets is also expected to pick up as transport restrictions are lifted and normal cargo routes are reopened after the Beijing Olympics ends in late-August.
However, styrene butadiene rubber (SBR) players in Shandong province were less optimistic about the impact of the resumption of cargo routes.
Olympics related transport and other regulations were not the key factors for suppressed market conditions, a Shandong-based SBR trader said, adding that the key issue that couldn t be changed or ignored were skyrocketing feedstock prices.
Feedstock butadiene values surged beyond $3,000/tonne in the past year, bolstered by tight crude C4 supply and soaring crude and naphtha prices.
High inventory levels and weak downstream demand also clouded the post-Olympics outlook for the olefins and polyolefins markets, industry sources said.
The current polypropylene and polyethylene inventory levels are really high, a Shanghai-based trader said.
What is going to happen after the Olympics is that sellers will scramble to offload all these built up stock. I do not think the market will recover so soon, he added.
While prices seeming to reaching a bottom, traders were unwilling to commit on when values may rebound for polyolefins.
