Asia petrochemicals outlook, w/c Apr 13.

Petrotahlil — Asian petrochemical markets are widely expected to receive some support on stronger crude oil prices and perk up in demand in China this week.

Asian polypropylene, in particular, is expected to firm up this week amid strong demand and supply shortage for prompt raffia grade.

Crude oil futures were higher in midmorning trade in Asia Monday after an OPEC+ agreement inked Sunday.

Front-month Brent crude futures rose $1.34/b (4.26%) on Monday morning from Thursday's settle at $32.82/b.

Propylene

**The outlook for the propylene market in Asia turned bullish this week as a crude oil production cut among the major producers and improvement in downstream propylene margins supported spot buying.

**FOB Korea selling indications stood at $630/mt FOB Korea Monday, up $30/mt from Thursday's close.

Ethylene

**Asian ethylene prices are expected to receive pressure amid hike from upstream prices after the OPEC+ meeting.

**The deepsea ethylene cargoes from Europe were continually seen showing selling interest to east Asian buyers with H2 May arrival days, making supply ample.

**Asian ethylene demand is expected to be weak due to COVID-19, especially in Southeast Asia, with buyers in the region likely to make procurement decisions cautiously.

Acrylonitrile

**The acrylonitrile market showed no signs of easing this week, as a growing supply glut and weak downstream demand are expected to pressure prices.

**Supply glut is expected to exacerbate when Zhejiang Petrochemical starts its new 260,000/mt acrylonitrile plant end April.

**On last Tuesday, the CFR South Asia ACN price was assessed down $55/mt week on week at $1,015/mt, the lowest since May 17, 2016, where it was assessed at $1,035/mt.

Polypropylene

** Asian polypropylene is expected to stay firm this week amid strong demand and supply shortage for prompt raffia grade -- the benchmark grade for PP -- in China.

** Around one quarter of the Chinese PP producers have switched to produce fiber-grade PP recently, leading to supply tightness for the raffia PP grade, sources said.

** The PP May futures contract listed on the Dalian Commodity Exchange rose Yuan 545/mt from the closing of last Friday to Yuan 8,056/mt Monday morning, hitting the highest trading limit of the day.

PTA

** Asian purified terephthalic acid prices seemed directionless this week as market sentiment remains bearish, yet the room to fall further is limited at such record-low PTA prices.

** Physical spot discussions remained thin, and the PTA CFR China marker stayed stable on Monday morning, similar to last Friday's assessment at $425/mt.

Methanol

** Chinese domestic methanol prices are expected to firm this week on the back of propylene and polypropylene demand for medical masks and related accoutrements.

East China ex-tank prices were trading Yuan 45/mt higher in Monday morning trade from last Friday's Yuan 1,750/mt levels, but upsides in imported methanol prices could be capped by a surge of cargoes this month amid scarce tank storage space. About 1.1 million mt of methanol imports is expected in April, market sources said.

MTBE

**Asian MTBE is expected to be stable to firm this week amid stable-to-higher upstream crude oil prices after the OPEC+ supply cut agreement reached on Sunday.

**Physical spot discussion remained muted and the FOB Singapore MTBE marker inched up 10 cents/mt from last Thursday at $229.60/mt on Monday morning.

Benzene

**With arbitrage to Europe/US closed, producers and traders eyed demand from China despite limited storage space at commercial tanks.

**Domestic east China prices lead Asia benzene pricing, as inter-city travel bans lift and consumption gradually returns to normal.

Isomer-MX

**The international northeast Asian market continue to find support from demand in China, where gasoline blending demand and cost averaging has supported buying lately.

**Arbitrage from the US to northeast Asia remains open and may lead to more arbitrage volumes from to Asia.

**Some market participants expect prices to rise going forward on increasing China demand and firmer upstream prices.