Singapore (ICIS)-The petrochemical market in the Middle East is facing a tight supply situation, mainly due to the shortage of containers, and shipping difficulties continued until March.

The shutdown of Asian factories has exacerbated the tight supply situation and concealed a shift from strong to stable demand in certain industries in the Middle East.

Due to the decrease in crude oil production, there is a severe shortage of base oil supply.

Many manufacturers are trying to keep up with the backlog of contract requirements, so they are not allocating anything to the spot market.

Iran is one of the largest suppliers in the region, and their shipping company is sanctioned by the United States.

In terms of polyethylene, due to strong demand for regional goods in major export markets, supply in the Middle East is still limited, while the lack of export supplies in the United States has caused major regional producers to sell out key-level configurations.

With regard to polypropylene (PP), the reduction in spot supply this month means that most suppliers have sold out their quotas and are preparing to announce February prices later this month.

Market participants in Jordan look forward to better demand in February as the government announced the phased removal of pandemic restrictions and the weekly curfew on Friday has also ended.

The supply conditions of base oil in the Middle East are more severe, and there is a severe shortage in the region.

The spot supply of any major producer in the Middle East or Asia continues to face extreme shortages.

In fact, Iranian refiners are more motivated to export base oil cargoes to India instead of the UAE, thus exacerbating the scarcity of supplies.

At the same time, in terms of crude oil prospects, with the rapid spread of new highly infectious coronavirus strains around the world, demand may again face some negative pressures in the short term.

Many countries, including the United Kingdom, Germany, and Japan, have reintroduced or expanded restrictions. If the number of cases continues to rise, more countries may follow suit.

However, the market will see significant support from Saudi Arabia's plan to cut production by 1 million barrels per day in February and March.

In terms of other chemicals, the weak consumption of polymeric methylene diphenyl diisocyanate (PMDI) still exists in the Middle East.

Demand from the GCC construction industry has not rebounded and is still on a downward trend, concealing the prospect of container shortages in the coming weeks.

However, on the other hand, toluene diisocyanate (TDI) in the Middle East is supported by improved demand for downstream polyurethane (PU) foam.

The supply of 10-13.5% polyether polyol (POP) in the Middle East is tight, and the demand remains stable.

South Korean producers have mostly sold out January and February shipments, thus keeping the situation tense, which has been aggravated by the continuing shortage of containers.

Buyers of polyethylene terephthalate (PET) in the Gulf Cooperation Council (GCC) region are delayed by about one to two weeks in receiving their previously booked Asian goods. Given the recent tight container and shipping supply, this situation has been Become common.

A series of improvements in Asia means that Asian suppliers have less sales pressure to sell products to the Middle East, which is consistent with buyers' more willingness to purchase regional goods to improve the safety of goods delivery.

In China, Zhejiang Wankai New Materials closed its 400,000-ton/year plant for maintenance in November last year. The closure lasted for more than a few months, and no restart date was seen.

China Resources Chemical closed its 400,000-ton/year plant for one-month maintenance, which began at the end of December.

A factory in Taiwan plans to perform maintenance around mid-January, and the maintenance time may exceed one month.

India's IVL Dhunseri started to maintain a PET production line in early December last year and postponed the expected restart date to the end of January.

Additional reporting by Veena Pathare, Izham Ahmad, Prateek Pillai and Hazel Goh

The focal story of Felicia Loo

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