This week, the focus area in the Asian petrochemical markets will be the reverberating effects of the rising yuan versus the dollar and its impact on petrochemical exports and imports. Already there is some sign of Chinese exports falling, while imports have been on the rise, according to market participants. 

Nevertheless, some market participants are taking a wait-and-see stance on supply deficiencies in other markets which would continue to buoy demand for Chinese exports in the petrochemical arena. The market sentiment was bullish overall, as most petrochemical prices for dollar-denominated cargoes in China rose last week on the back of good demand. 

Meanwhile, the US has started to recover from Tropical Storm Harvey's devastation. ExxonMobil restarted its entire plant in Beaumont and the UK-based Ineos restarted its two Chocolate Bayou steam crackers south of Houston in Alvin last Thursday. However, the impending impact of Hurricane Irma is a concern for the market still, as its impact on the petrochemicals market remains unknown as of now. 

In Southeast Asia, demand remained stable and sentiment was largely bullish on rising demand, while in Indian market was rebounding back from the impact of GST and domestic trade was healthy, although the import side had yet to see a positive sentiment, according to market participants. AROMATICS 

Asian styrene monomer prices were hovering at six-month highs last Monday, before dropping $49/mt to $1,416/mt CFR China last Friday. Firm SM futures drove the rally in prices, besides the strong support from a tight global supply and a healthy downstream demand. 

Despite the volatility, market participants expect prices to pick up this week, as low stocks in East China would continue to buoy the market. East China inventories stood last Friday at a two-year low of 32,000 mt, with the inventory last lower than that on December 11, 2015, when it was at 28,000 mt. Marginally recovering from the narrowest paraxylene-naphtha spread in 21 months last Friday, Asian PX was assessed at $830.33/mt FOB Korea and $848.33/mt CFR Taiwan/China on the back of higher buying sentiment. A late spike in upstream crude oil futures further buoyed the market. Also, India's ONGC Mangalore Petrochemicals Ltd. has concluded its latest sell tender for loading PX in the fourth quarter at a discount of $46/mt to the monthly average of the Platts CFR Taiwan/China assessments. OLEFINS 

A surge in Chinese domestic prices and tight supply caused Asian butadiene prices to spike $110/mt last Friday from Thursday last week to $1,470/mt FOB Korea and $1,520/mt CFR China. In response to the market situation, Sinopec had raised its ex-works butadiene offers in East China twice last week -- the first on Wednesday, up Yuan 500/mt, and then on Friday, up Yuan 400/mt, finally resting at Yuan 11,700/mt, equating to $1,508/mt on an import parity basis. 

Butadiene prices are expected to continue to rise this week on strong demand for October cargoes. 

As for propylene, the CFR China propylene price benchmark jumped $79/mt from last Thursday to hit a seven-month high last Friday. The market had started the week on a firm tone, fueled by supply tightness globally. 

China's local propylene supplies were also reported to be tight due to logistics restrictions in China, ahead of the National Day celebrations in October, which increased demand for import materials. However, some market participants felt that the recent price hike is likely to be temporary, citing high operating rates of propane dehydrogenation plants in China. 

China's PDH plants operated at an average rate of 81% in August, rising from 73% in July because of less maintenance-related shutdowns, according to S&P Global Platts calculations based on data provided by Sublime China Information. In addition, the downstream polypropylene market was relatively sluggish, with the CFR China PP price hovering at around $1,130/mt. METHANOL AND MTBE 

China's import price for methanol surged $36/mt week on week to $360/mt CFR China, hitting a six-month high on Middle East supply disruptions and falling East China inventories. The price was last assessed higher at $367/mt CFR China on March 9, Platts data showed. 

Sabic's Ar-Razi methanol units No. 2, No. 3 and No. 4 remained shut last week and will take an estimated 30 more days to repair, representing a production loss of up to 190,000 mt, and forcing the producer to purchase 45,000 mt of spot cargo CFR China, industry sources said on Friday. 

Asian MTBE gained strength last week as gasoline prices rose amid a fimer energy complex. It was last assessed at $686/mt FOB Singapore on Friday, up $6/mt from Thursday. POLYMERS 

Asian high-density polyethylene film prices increased last week as buying interest rose in tandem with the increase in Dalian futures, the depreciation in the yuan against the dollar, and force majeure at several US refineries. 

Actively traded January 2018 linear low-density PE futures on the Dalian Commodity Exchange increased Yuan 270/mt week on week, settling at Yuan 10,315/mt ex-warehouse by Wednesday close. More than 50% of the PE capacity in the US was heard to be down, sources said. 

Although all grades of PE were on the uptrend, HDPE was not heard to be as snug as LLDPE, hence the slightly lower prices, reversing the typical trend, traders said. 

All the producers were heard to have sold out for shipments in September, while resellers of the same cargoes were hiking up offers in view of the extremely bullish sentiment driven by the outages at PE plants in the US due to Tropical Storm Harvey.