Asian Markets

January 21, 2019

Asia Benzene Overview

OUTLOOK ’19: Asia’s benzene to continue struggling with long supply

Source: ICIS News

2018/12/26

SINGAPORE (ICIS)–A long supply scenario aptly describes the Asia benzene market in 2018, a situation unlikely to change in 2019.

With limited outlet to the US and other destinations, most of the volume produced has remained within Asia, and in 2019 ample supply is expected with new capacity across Asia and the Middle East due to come on stream.

However, a majority of new downstream capacities of key downstream styrene monomer (SM) are also planned to come onstream from 2020 and beyond.

This lead and lag between benzene and SM start-ups is expected to cause temporary imbalances between demand-supply dynamics in 2019.

Based on the current start-up schedule, it appears that benzene supply in Asia and the Middle East will increase by 3.6m tonnes in 2019, while the total increase for SM is expected to be around 2.2m tonnes.

The benzene market has weakened from the third quarter as the US-China trade war escalated.

Spot prices, which were hovering between $800 and $900 per tonne in the first half of the year, crashed to below $700/tonne in the fourth quarter, ICIS data showed.

The temporary truce in the trade war, emanating out of the G-20 summit in Argentina in early December, is expected to buoy the market to some degree into the first quarter.

“Firmer crude futures on the trade war pause should help the benzene market in the near term,” said a trader in Singapore.

Benzene is a base chemical used to make other chemicals like styrene, phenol and caprolactam.

However, market players remained cautious after the downside volatility seen in the fourth quarter.

After all, the pause in the trade war remains temporary with no guarantee of resolution in the near term.

“Demand in China will continue to grow but is hampered by the ongoing trade dispute,” said a producer in Korea.

ICIS Editorial Chart goes here

Meanwhile, the spot east-west arbitrage window, which was not viable for most part of this year, shows little signs of opening up next year.

Demand for Asia benzene from the US remained lackluster in 2018 year with shutdowns at major SM plants.

Sellers harbor hopes that the situation may change in 2019, for if there were less SM outages next year, demand in the US for Asia benzene could revive.

“Spot arbitrage opportunities to the US was limited this year, hopefully that will change next year[2019]”, said a trader in Korea.

Focus article by Clive Ong

https://www.icis.com/explore/resources/news/2018/12/26/10299480/outlook-19-asias-benzene-to-continue-struggling-with-long-supply/?cmpid=SOC%257CRSS%257Ctwitter%257CFreeNewsFeed

January 21, 2019

China Railway to Europe

China’s Rail Freight Trips to Europe Mushroom, But Must Uncouple Subsidies

Li Xiuzhong
/SOURCE : yicai
China’s Rail Freight Trips to Europe Mushroom, But Must Uncouple Subsidies

(Yicai Global) Jan. 21 — The number of runs of the China Railway Express freight trains to Europe, which started in 2011, has risen rapidly with trade between China and Europe burgeoning.

Beijing-based China Railway Express ran 6,300 cargo trips to its western continental neighbor last year, an increase of 72 percent, official data show. However, the line must now become more market-oriented and less reliant on government handouts, insiders said.

The express ran 6,300 trips to Europe last year, almost equal to the total number of those from 2011 to 2017, with 2,690 returning trips in an over twofold rise from the previous year, per data from China Railway Group

Chengdu, Chongqing, Xi’an, Zhengzhou and Wuhan ran a total of 5,437 trips last year, making up more 80 percent of the nation’s total, while the number of trains in the western cities of Chengdu, Chongqing and Xi’an all topped 1,000.

The China Railway Express has made 12,000 freight trips thus far from 56 Chinese cities to 49 cities in 15 European countries.

Train trips to Europe ballooned last year with the Belt and Road Initiative and a fillip from local governments. The frequency of freight train runs is expected to grow by geometric progression in next three to five years, Li Muyuan, executive vice president and secretary general of the Intermodal Branch of China Communications and Transportation Association told Yicai Global.

Balancing Act

The national ratio of departing and returning trips last year was 3:2, whereas the ratio in Chongqing, Zhengzhou and Wuhan was more balanced.

Though 6,300 trips ran last year, the total transit scale was only equivalent to 600,000 twenty-foot equivalent units, which is insignificant compared with the 246 million TEU of China-Europe sea transport last year, Li added. Thus, the cross-continent express trains have much room for improvement.

Huge capital investments from local governments underpins the swift growth of express trains. It is common for governments to invest to build transit channels and logistics networks via infrastructure construction subsidies, but local subsidies now usually go to defray operating costs, Li told Yicai Global.

Several city governments are committed to attracting goods and expanding the transport scale of trains to Europe. Some have cut train cargo costs to make them lower than sea freight to gain price advantages. The risk of this can be very great, however.

It has led to subsidy dependence for the major domestic and international operators of the China Railway Express, Li told Yicai Global, adding operations will be unsustainable once subsidies fall by the way.

The government should clearly manage subsidies and evaluate their effects, she said.

China Railway Express would not survive without subsidies, which help operators to do business until attaining business efficiency of a certain scale, Wang Guowen, director of the Logistics and Supply Chain Management Institute of the China Development Institute, told Yicai Global. China Railway Express is now developing in a balanced manner.

Weaning Off Handouts

Government subsidies need not be completely eliminated but can be reduced in the future like other subsidies with gradual adjustments and reductions, Wang believes.

The success of China-Europe express depends on whether it promotes regional economic industrial clusters, Wang said, adding that competition between cities is not about the number of trains. If so, this would only be a difference in financial resources, which are ultimately limited.

The key is to form a market-oriented model for China Railway Express’ operation as soon as possible to lead the next stage of the development process and the local industry transformation and upgrading, Wang added.

Editor: Ben Armour

https://yicaiglobal.com/news/china-rail-freight-trips-to-europe-mushroom-but-must-uncouple-subsidies

January 21, 2019

China Railway to Europe

China’s Rail Freight Trips to Europe Mushroom, But Must Uncouple Subsidies

Li Xiuzhong
/SOURCE : yicai
China’s Rail Freight Trips to Europe Mushroom, But Must Uncouple Subsidies

(Yicai Global) Jan. 21 — The number of runs of the China Railway Express freight trains to Europe, which started in 2011, has risen rapidly with trade between China and Europe burgeoning.

Beijing-based China Railway Express ran 6,300 cargo trips to its western continental neighbor last year, an increase of 72 percent, official data show. However, the line must now become more market-oriented and less reliant on government handouts, insiders said.

The express ran 6,300 trips to Europe last year, almost equal to the total number of those from 2011 to 2017, with 2,690 returning trips in an over twofold rise from the previous year, per data from China Railway Group

Chengdu, Chongqing, Xi’an, Zhengzhou and Wuhan ran a total of 5,437 trips last year, making up more 80 percent of the nation’s total, while the number of trains in the western cities of Chengdu, Chongqing and Xi’an all topped 1,000.

The China Railway Express has made 12,000 freight trips thus far from 56 Chinese cities to 49 cities in 15 European countries.

Train trips to Europe ballooned last year with the Belt and Road Initiative and a fillip from local governments. The frequency of freight train runs is expected to grow by geometric progression in next three to five years, Li Muyuan, executive vice president and secretary general of the Intermodal Branch of China Communications and Transportation Association told Yicai Global.

Balancing Act

The national ratio of departing and returning trips last year was 3:2, whereas the ratio in Chongqing, Zhengzhou and Wuhan was more balanced.

Though 6,300 trips ran last year, the total transit scale was only equivalent to 600,000 twenty-foot equivalent units, which is insignificant compared with the 246 million TEU of China-Europe sea transport last year, Li added. Thus, the cross-continent express trains have much room for improvement.

Huge capital investments from local governments underpins the swift growth of express trains. It is common for governments to invest to build transit channels and logistics networks via infrastructure construction subsidies, but local subsidies now usually go to defray operating costs, Li told Yicai Global.

Several city governments are committed to attracting goods and expanding the transport scale of trains to Europe. Some have cut train cargo costs to make them lower than sea freight to gain price advantages. The risk of this can be very great, however.

It has led to subsidy dependence for the major domestic and international operators of the China Railway Express, Li told Yicai Global, adding operations will be unsustainable once subsidies fall by the way.

The government should clearly manage subsidies and evaluate their effects, she said.

China Railway Express would not survive without subsidies, which help operators to do business until attaining business efficiency of a certain scale, Wang Guowen, director of the Logistics and Supply Chain Management Institute of the China Development Institute, told Yicai Global. China Railway Express is now developing in a balanced manner.

Weaning Off Handouts

Government subsidies need not be completely eliminated but can be reduced in the future like other subsidies with gradual adjustments and reductions, Wang believes.

The success of China-Europe express depends on whether it promotes regional economic industrial clusters, Wang said, adding that competition between cities is not about the number of trains. If so, this would only be a difference in financial resources, which are ultimately limited.

The key is to form a market-oriented model for China Railway Express’ operation as soon as possible to lead the next stage of the development process and the local industry transformation and upgrading, Wang added.

Editor: Ben Armour

https://yicaiglobal.com/news/china-rail-freight-trips-to-europe-mushroom-but-must-uncouple-subsidies

January 11, 2019

TDI Overview in China

An Overview of China’s TDI Imports and Exports in 2018
2019-01-08    [Source:PUdaily]
share:

PUdaily, Shanghai– 1. China’s TDI imports and exports in 2018

According to China Customs, China’s TDI imports totalled 52,457 tons for the January-October period. The volume of TDI imports for the full year is estimated to reach 62,949 tons, increasing by 20,122 tons from last year, or 47%. South Korea and Saudi Arabia make the biggest contribution to the growth. For the January-October period, China’s TDI exports amounted to 73,391 tons. The volume of TDI exports for the full year is estimated to reach 88,068 tons, decreasing by 36,097 tons from prior year, or 29%. The decrease is mainly due to the manufacturers’ limited willingness to export their products thanks to the high domestic prices.

2. Imports from main import sources in 2017 and 2018

South Korea remained the biggest source for China’s TDI imports, accounting for around 58% of its total TDI imports. With the start-up of Sadara’s facilities, China’s imports from Saudi Arabia rose to 14,000 tons. The figure is likely to continue rising in 2019. In 2018, Saudi Arabia accounted for about 23% of China’s TDI total imports.

3. Exports from China’s TDI exporters in 2017 and 2018

Covestro remained China’s biggest TDI exporter. Its export volume for 2018 is estimated to reach around 62,000 tons, down by 37.7% and accounting for about 70% of China’s total TDI exports. At the same time, thanks to the high domestic prices, other manufacturers also saw moderate volume of exports. They exported a total of 261.7 million tons in 2018, up by 1,463 tons, or 6%.

http://www.pudaily.com/News/NewsView.aspx?nid=75613

January 11, 2019

TDI Overview in China

An Overview of China’s TDI Imports and Exports in 2018
2019-01-08    [Source:PUdaily]
share:

PUdaily, Shanghai– 1. China’s TDI imports and exports in 2018

According to China Customs, China’s TDI imports totalled 52,457 tons for the January-October period. The volume of TDI imports for the full year is estimated to reach 62,949 tons, increasing by 20,122 tons from last year, or 47%. South Korea and Saudi Arabia make the biggest contribution to the growth. For the January-October period, China’s TDI exports amounted to 73,391 tons. The volume of TDI exports for the full year is estimated to reach 88,068 tons, decreasing by 36,097 tons from prior year, or 29%. The decrease is mainly due to the manufacturers’ limited willingness to export their products thanks to the high domestic prices.

2. Imports from main import sources in 2017 and 2018

South Korea remained the biggest source for China’s TDI imports, accounting for around 58% of its total TDI imports. With the start-up of Sadara’s facilities, China’s imports from Saudi Arabia rose to 14,000 tons. The figure is likely to continue rising in 2019. In 2018, Saudi Arabia accounted for about 23% of China’s TDI total imports.

3. Exports from China’s TDI exporters in 2017 and 2018

Covestro remained China’s biggest TDI exporter. Its export volume for 2018 is estimated to reach around 62,000 tons, down by 37.7% and accounting for about 70% of China’s total TDI exports. At the same time, thanks to the high domestic prices, other manufacturers also saw moderate volume of exports. They exported a total of 261.7 million tons in 2018, up by 1,463 tons, or 6%.

http://www.pudaily.com/News/NewsView.aspx?nid=75613