Linear Alpha Olefins Market goes Bullish in The Asia Pacific Region

Owing to the rising cost pressure from upstream olefins amid significant volatility in crude oil, Linear Alpha Olefins (LAO) market has been termed as robust in the Asia Pacific market. Both LAO producing nations as well as importing nations have witnessed strong pricing sentiment.

Linear Alpha Olefins market in Japan has been termed as firm to strong in early Q2 due to rising prices of crude oil and other energy feedstocks globally, as per the latest assessment by ChemAnalyst. As of the week ending 8th April 2022, Linear Alpha Olefins C10 blends prices were assessed at USD 1386 per MT, while C16-18 prices were settled at USD 1574 per MT on FOB basis. Idemitsu, a key producer in the Far East Asian region, has been observing strong cost pressure from upstream and soaring energy costs which increased the overall cost of production. Consequently, Idemitsu has maintained healthy pricing sentiment in the domestic and international markets.

In China, prices of Linear Alpha olefins have been firm despite the recent decline in demand from downstream industries. Resurgence in covid cases in the recent weeks has hampered the normal functioning of several key markets, including petrochemical. Crude oil prices have been assessed at record highs in March and in early April, culminating in strong cost pressure on downstream Linear Alpha Olefins. The lockdown has adversely hit transportation and logistics in the key cities of Shenzhen and Shanghai. Far East Asia and Middle East Asia are key exporters of Linear Alpha Olefins to China. Firm energy prices and feedstock olefins prices have been keeping the prices of the imported material on the higher side.

Meanwhile, demand from downstream Lubricants, Surfactants, and other industries has been weak as both traders and buyers take the wait and see approach. Furthermore, exports to China have dropped in the light of increased restrictions in the key cities of China. Hence, as of the week ending 8th April 2022, LAO C10 blend prices were assessed at USD 1464 per MT on CFR basis, while C16-18 blends settled at USD 1694 per MT on CFR basis.

As per ChemAnalyst, “The Linear Alpha olefin market is expected to remain robust in the coming weeks as the crude oil prices have been in the USD 100/b range despite a recent decline in prices. Demand fundamentals are expected to remain firm in Japan while extended lockdowns in China may curtail demand dynamics.”