Regressing n-Heptane Market in Asia Despite Strong Upstream Value
- 25-May-2022 5:34 PM
- Journalist: Yage Kwon
Shanghai, China: The n-Heptane market in India and China has been falling for a month due to various factors. The primary influencing factor was the unprecedently rising covid cases in China which led to prolonged lockdowns and the trade disruptions that followed.
Additionally, fluctuating Crude oil price has been putting extreme pressure upon the global market, where downstream derivative manufacturers in Asia were feeling the heat too. Brent Crude July contracts were beyond USD 114 per barrel. Most traders were afraid to commit to higher offers and remained in an intense wait-and-see state. Apparently, China's n-Heptane price witnessed a decline this week of approximately 1.4 percent.
As per our sources, while China plans to open markets and supplies are expected to continue to lag demand, the Crude prices will likely keep strengthening. This will mean that all the crude derivatives and downstream commodity prices, including n-Heptane, will move up in the coming weeks, thus putting more pressure on margins. Meanwhile, in India, the Crude oil output fell by 0.9 percent as the contribution from fields operated by the private sector wiped away the gains of Oil and Natural Gas Corporation (ONGC) and Oil India Limited (OIL), according to the Ministry of Petroleum and Natural Gas. Consequently, the domestic players in India were more anxious as the demand for n-Heptane remained sluggish in the downstream market. Thereby, the n-Heptane market dynamics were negatively impacted, and the price slid by nearly 3.4 percent this week.
Conclusively, as per ChemAnalyst, "The n-Heptane prices in Asia are relatively low, which are expected to put the regional players under significant pressure in the coming weeks. The market sentiments are also likely to remain bearish. On the other hand, soaring upstream because of easing Covid restrictions in China might further impact the Petrochemical prices across the Asian market."