Rising Feedstock Cost Drives Up Cyclopentane Prices in Asia
- 02-May-2023 6:03 PM
- Journalist: Xiang Hong
The cost of Cyclopentane witnessed an upward trend in April 2023 due to the rising feedstock prices in the Chinese market. The raw material Benzene prices in the Chinese market remained stable to strong due to high crude values in April. Further, the upstream Crude oil prices fluctuated in a positive direction as OPEC+ announced production cuts kicked in.
Along with the increase in industrial activity, the raw material supply chain remained constrained. Middle Eastern nations announced a reduction in Crude Oil production, which affected the Crude Oil (upstream) pricing in the Asian market correspondingly and increased the price of Benzene. Globally, downstream petrochemical commodities, including the market for Cyclopentane, are being seriously impacted by this price increase.
On the other hand, a similar price pattern was followed in India, where the price of Cyclopentane increased by 1.8% on an Ex-Mumbai basis.
OPEC, led by Saudi Arabia, declared earlier in April 2023 that it would reduce oil output by 500Mb/d for the rest of 2023. Experts claim that OPEC's most recent action suggests that they anticipate a decline in demand over the next months.
However, the OPEC+ production cutback would lead Chinese and Indian refiners to request more Crude barrels from Russia, which might restrain Saudi Arabia's price increase. Meanwhile, rising Crude Oil costs could reduce consumption and increase inflation.
According to ChemAnalyst, the cost of Cyclopentane hovered around USD 1540/MT on a FOB Shanghai basis during the week ending 28th April 2023.
The Cyclopentane price is expected to incline in the Asia-Pacific market due to the volatility in crude values and increase in raw material costs. The trading environment in the market has improved at the moment, and industry confidence has grown. Under the influence of favorable factors, the Cyclopentane market price is expected to rise in the short term. The Cyclopentane price was appreciated in April 2023 by 4% in the Chinese market, respectively.
