Market trends

24 January 1994 00:00  [Source: ICB]

Naphtha remains weak at $129-131/tonne cif NWE, with Med numbers $3-4/tonne weaker and barge prices also under pressure at $126-128/tonne cif.

Ethylene remains quiet with suggestions of slight firming, despite estimates of $190/tonne production costs derived from the low naphtha levels and a trader-arranged spot cargo from Sines to Croatia thought to have been sold well below the prevailing $245-255/tonne cif range. The BASF cracker is finally onstream with commercial product as US producers hope for January contract roll-over at 20.5 cent/lb (ECN 24 January p10).

US propylene shipments to the Far East, based on a relatively stable 9.5 cent/lb fob US Gulf, dominate that market, although material is now being offered to an NWE producer out of Marcus Hook at a reported DM435/tonne cif.

The butadiene market is characterised by Korean contract and Saudi spot flows to the US, on which the last deal - done in December at $240/tonne cif US Gulf - is now arriving. A 2000 tonne Saudi cargo is to sail under tender to Petkim some way below prevailing numbers. Shell's Moerdijk hydrogenation unit has been down since the weekend for an undefined period as problems with product selectivity are addressed. US January contracts have been agreed at 15 cent/lb.

Benzene prices continue firm in moderate demand with some German purchasing understood to cover BASF's HDA outage, said to be priced $256-259/tonne fob. Another purchase is reported at $260/tonne fob and is thought to reflect more difficult port conditions.

Toluene is weakening now the requirements for the Indian and Far East shipments have been fulfilled with product currently said offered in the $180-185/tonne range.

Xylenes are also weakening but with widely divergent prices claimed - one player claiming deals done in the $240-245/tonne fob range and another seeing offers at $245-250/tonne. Two 6000 tonne shipments from the Hesse refinery to Italy are said underway as players suggest falling US spot prices and lack of transpacific shipping could see further US to Europe movements.

Europe's major styrene contract buyer has agreed Q1 contracts with his suppliers up DM20/tonne at DM845/tonne FD in acrimonious discussions (ECN 24 January p4). A range of DM845-885/tonne now appears to have been established. BP is set to close one styrene train at Baglan Bay, reducing production by around 140 000 tonne/year. Some T2 spot business has taken place in the $500-505/tonne range.

Paraxylene prices have slipped, with one buyer claiming a purchase below $500/tonne and offers available at $490-500/tonne cif Algeciras. European sellers still claim prices in the $500-510/tonne fob Rotterdam range.

Bulk chemical prices
	European contract		European spot	US price
	DM/tonne	$/tonne	$/tonne	$/tonne
Naphtha	n.a.	n.a.	129-131 (cif)	n.a.
Ethylene	650a	402	245-255 (nom)	474 (Dec)
Propylene2	4501	263	240-250 (cif)	281 (Dec)
Butadiene	4631	266	240-250 (nom)	331 (Jan)
Benzene	4351	250	255-260 (fob)	255 (Jan)
Toluene	3401 (ex works)	195	180-185 (nom)	n.a.
Xylene	n.a.	n.a.	240-245 (fob)	243 (Jan)
Styrene	845-8851	483-506	500-510 (T2) (fob) 475-485 (T1) (fob)	573 (Dec)
Paraxylene	8181	470	490-500 (fob)	490 (Q1)
Orthoxylene	5151	295	290-295 (nom)	314 (Dec)
Methanol	285(fob)1	166	167-172 (T2) (fob) 145-155 (T1) (cif)	176 (Dec)
MTBE	1.29-1.38X1	n.a.	197-202 (fob)	n.a.
Ammonia	n.a.	n.a.	130-140 (CFR)	n.a.
Prices contained in this report are obtained through consultation with producers, consumers and merchants across Europe. They are intended as a guide to price levels of recent business in Europe and reflect medium to large tonnage sales. Spot prices are quoted fob (free-on-board) NW European port, cif (cost, insurance and freight), FCA (free carrier), CFR (cost and freight). T1 = imported material subject to EC common external tariffs, T2 = EC material, not dutiable, bld = blending grade, com = commercial grade, nit = nitration grade. European contract prices are quoted on a free delivered basis (FD) unless otherwise stated, initial but unfixed negotiating range is indicated (nom), n.a. = not applicable, m = monthly contracts. Spot prices contained in this issue are based on information available on 19 January 1994.   Key: a Indicates fourth quarter contracts. 1 Indicates Q1 contract agreements. 2 Polymer grade.   Dollar prices are based on rates of exchange on 18 January: DM$1.749, FF:$5.933, Dfl:$1.958, $:£1.497. The dollar equivalent range is based on exchange rates prevalent at the time of contract closure if available, or an average rate for the quarter.

Orthoxylene is said to have tightened slightly following completed Indian shipments, with prices quoted $5/tonne up at $490-495/tonne - but with European demand absent those prices are nominal.

European MTBE spot activity is confined to US-bound traffic, which is estimated at 40-50 000 tonne over the week, mainly for the US east coast, which together with a rumoured closure at Arco's Fos unit has kept markets tight.

Methanol markets are quiet but tight with small parcels at DM330/tonne FCA. Condea's Wesseling unit is running at two-thirds of capacity (ECN 24 January p10).

Ammonia markets are steady, with numbers slightly weaker at $107-l08/tonne fob Ventspils and in the very low $100s/tonne fob Yuzhnyy, translating into $130/tonne CFR NWE pre-duty.

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