SINGAPORE--The Chinese petrochemical industry seems to have missed the traditional rally ahead of the Golden Week holidays as the widespread bearish sentiment forced prices to remain depressed, market sources said on Wednesday.
The country celebrates the Golden Week in the first week of October.
"Prices would usually rise in the two-three weeks towards Golden Week as people start stocking up to ensure ample inventories but market conditions in the third quarter were far from the traditional peak," said a Shanghai-based styrene monomer trader.
Trade had been sluggish given the acute lack of buying interest from downstream end-users as China reeled from slowing exports to the US, its biggest market.
Soft demand prompted most petrochemical companies to run plants below full capacity.
"We will continue to operate at reduced rates for cost efficiency. The holidays have had little effect on the market. The overriding factors are now the credit and crude crisis leading to a weak economy and thus low consumption," a methanol producer said in Mandarin.
Deals on CFR (cost and freight) basis have been few and far between in the past three months as Asian sellers faced the impact of a drawdown in import demand from China, the largest market for toluene, said domestic traders.
The continued sluggishness in the markets was due to the persisting weak demand from downstream segments as consumption fell in line with the slowdown in the economy, they added.
Official trade statistics from South Korea showed a marked decline in China-bound petrochemical cargoes in the past two months.
No pre-buying interest was evident in the ethylene spot market, sources said.
All purchase activities had stopped and discussions were underway to postpone delivery of contractual cargoes, said a China-based importer.
"Monoethylene glycol (MEG) end-users who needed supplies have bought cargoes a few weeks ago as they were afraid sellers would capitalise on the market closure during the Golden Week to lift prices," traders said.
Market analysts forecast supply and demand fundamentals to remain poor in the next six months as global financial markets continued to reel under the weight of the US financial woes.
"I don t think things will be any better after the holidays," said a manager from a chemical storage company in Zhangjiagang
The country celebrates the Golden Week in the first week of October.
"Prices would usually rise in the two-three weeks towards Golden Week as people start stocking up to ensure ample inventories but market conditions in the third quarter were far from the traditional peak," said a Shanghai-based styrene monomer trader.
Trade had been sluggish given the acute lack of buying interest from downstream end-users as China reeled from slowing exports to the US, its biggest market.
Soft demand prompted most petrochemical companies to run plants below full capacity.
"We will continue to operate at reduced rates for cost efficiency. The holidays have had little effect on the market. The overriding factors are now the credit and crude crisis leading to a weak economy and thus low consumption," a methanol producer said in Mandarin.
Deals on CFR (cost and freight) basis have been few and far between in the past three months as Asian sellers faced the impact of a drawdown in import demand from China, the largest market for toluene, said domestic traders.
The continued sluggishness in the markets was due to the persisting weak demand from downstream segments as consumption fell in line with the slowdown in the economy, they added.
Official trade statistics from South Korea showed a marked decline in China-bound petrochemical cargoes in the past two months.
No pre-buying interest was evident in the ethylene spot market, sources said.
All purchase activities had stopped and discussions were underway to postpone delivery of contractual cargoes, said a China-based importer.
"Monoethylene glycol (MEG) end-users who needed supplies have bought cargoes a few weeks ago as they were afraid sellers would capitalise on the market closure during the Golden Week to lift prices," traders said.
Market analysts forecast supply and demand fundamentals to remain poor in the next six months as global financial markets continued to reel under the weight of the US financial woes.
"I don t think things will be any better after the holidays," said a manager from a chemical storage company in Zhangjiagang
