Activity pick-up sends Asian spot C3 market into recovery mode
China’s propylene market hit a three-month high a week prior to the Lunar New Year, helped by tightening supplies amid lower cracker operations and regional plant shutdowns. However, things took a turn for worse following the outbreak of the coronavirus.
With travel curbs extending across the country and key manufacturers shut down, the virus outbreak made shipping and logistic operations more complicated in China. In addition, several neighbouring countries, including Vietnam, responded with border tightening or closures with mainland China, further impeding the supply chains. This in turn negatively affected the buying sentiment and spot prices in China shed 15% of their value within a span of four weeks, stretching from January into February.
The number of workers resuming work increased notably as of last week, in line with the Chinese Ministry of Commerce’s notice published on February 23. The ministry urged the local authorities to promote an orderly resumption of work and production, adding that the resumption of work had already reached more than 70% in the country’s top exporting provinces.
The easing of travel bans and higher operating rates spurred buying interest in the spot propylene market and spot prices ended last week $15-20/ton higher at $790/ton CFR China and $780/ton FOB Korea basis.
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