The supply and demand fundamentals in the petrochemical market would remain weak for the next six months, said some market distributors.
The Chinese petrochemical industry missed the traditional peak up season ahead of the National Day holidays as the widespread bearish sentiment forced prices to remain depressed. The country celebrates the National Day holidays during 29 September to 5 October. Prices would usually rise in the two-three weeks towards the holidays as people start stocking up to ensure ample inventories but market conditions in the third quarter were far from the traditional peak.
However, soft demand prompted most petrochemical companies to run plants below full capacity. No pre-buying interest was evident in the benzene spot market, and only a few interesting in the toluene and xylene spot market. 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.
The short-lived rebound in crude values had a positive psychological effect on demand but in consensus, they had an uncertain near-to-medium term outlook against the backdrop of a slowing global economy.