Weak demand in Asia, petrochemical market is in slump

According to recent news from "Acoustics Weekly", due to the epidemic and container shortages continue to plague the Asian region, the Asian petrochemical market is in a predicament of sluggish demand.

Bearish sentiment spread in the Asian polyethylene (PE) market. Analysts said that as some Asian countries restart lockdown measures due to the epidemic, demand for PE in Asia may remain weak in the short term, but due to the increase in new capacity in Asia for the rest of this year, the supply will also increase, but low-density polyethylene (LDPE) short-term The supply is still tight. It is expected that when the US arbitrage window to Asia reopens, US imports will increase in the fourth quarter.

In the Asian acetic acid market, the downstream consumption will continue to decrease. The production of vinyl acetate monomer (VAM) in Southeast Asia and China declined due to planned and unplanned shutdowns and production issues. Concerns about the epidemic in India further suppressed buying sentiment. Inventory pressure on China's downstream industries of acetic acid has risen because exports are affected by the shortage of containers, which will curb demand for acetic acid and increase the cautious sentiment of buyers. In addition, the capacity utilization rate of some ethyl acetate and butyl acetate facilities in India and Southeast Asia has been affected by factors such as the rainy season and the substitution of raw materials since late July.

Southeast Asian countries continue to respond to the epidemic, and the demand for polypropylene (PP) may remain weak in September, which is traditionally the peak demand season. The newly-built PP production capacity in Southeast Asia and China is about to be put into production, which has also added challenges to the Asian PP market. As usual, PP demand will improve in September and October, because inventory needs to be replenished before the year-end holiday. However, some market participants believe that due to the impact of the epidemic, this may not happen this year.

The Asian Acrylonitrile Butadiene Styrene (ABS) market seems to be bucking the market, as demand is strong before the traditional peak season. In addition, logistics challenges have increased, resulting in tight market supply.