Market trends

07 April 1994 00:00  [Source: ICB]

Naphtha prices have weakened with crude and very poor petrochemical demand, especially in ARA, to the $163-165/tonne cif NWE range.

Ethylene sellers are still pushing for up to DM50/tonne contract hikes with markets still seen as extremely tight. The 315 000 tonne/year Böhlen cracker in eastern Germany starts its maintenance shutdown this weekend as Porto Marghera comes back into production.

Major German propylene buyers have accepted DM500/tonne FD contracts with at least one big German seller reporting contracts at this level. Others are expected to follow. One non-German buyer, citing an offer of 4000-5000 tonne of chemical-grade for July/August delivery at DM470/tonne cif, is holding out for lower contract numbers if it sees further spot price declines.

Butadiene Q3 contracts could be settled by the end of the week at around the FF1900-1950/tonne FD range with both sides in the mood for compromise. Shell, Lyondell and Oxy have nominated 19 cent/lb for July contracts, significantly below Exxon's numbers, with spot numbers as high as 25 cent/lb cif US Gulf.

Benzene spot numbers continue to firm in NWE with deals claimed at $323/tonne fob and sellers said to now be looking for $325/tonne fob. Higher numbers reflect good demand from downstream styrene operations and higher spot numbers in the US, where $1.06/gal has been done, well ahead of July contract numbers now agreed at $1.00/gal. In Europe, contract agreement has been reached at DM510/tonne, down DM40/tonne on Q2.

Toluene contract agreement is thought to be imminent with players expecting the lower benzene number to be reflected in toluene contracts. In contrast to benzene, spot numbers have weakened slightly as a shipment of Russian material for early July delivery is said to remain unsold.

Xylene numbers are also the subject of diverse pricing ideas. Traders appear to be moving material at numbers between $265 and $270/tonne with numbers closer to the lower end of the range.

Styrene barge contract agreement is rumoured but completely unconfirmed at DM1190/tonne FD, with another producer claiming a truck contract agreed at DM1230/tonne. Producers claim spot numbers are around $690-700/tonne in a market that is still short of material as prices in the US, back slightly at 29.5-30 cent/lb, and the Far East appear to preclude further sales into Europe.

Paraxylene prices are still claimed above $700/tonne with the pull from Far East markets excluding further shipments to Europe and with discussions in the Far East continuing to establish Far East PX contract prices at a 0.5-0.75 cent premium to the US number.

Orthoxylene spot material has been offered at $340/tonne but no European buyers currently appear to be looking for spot material. There is talk of traders being short of material for a shipment being put together for Asia.

Methanol spot numbers continue on their dramatic ascent with T2 deals done as high as DM570/tonne cif, the Russians demanding $250/tonne fob Kotka and Methanex posting 82 cent/gal for US July contracts. An unexpected Methanor plant shutdown and problems at an ICI unit are worsening the tightness.

MTBE markets are quiet and stable as some of the last of the contract sellers still in negotiation for Q3 hold out for numbers well above the 1.45 MTBE to premium unleaded gasoline ratio already agreed.

Ammonia activity has been muted, with material said offered but not done in the low $160s/tonne cif NWE duty-free as Med tenders were done in the high $160s/tonne. Sellers out of Yuzhnyy are looking for $130-135/tonne fob, with Russian producers saying they will reduce output to maintain these numbers, if necessary.

Bulk chemical prices
	European contract		European spot	US price
	DM/tonne	$/tonne	$/tonne	$/tonne
Naphtha	n.a.	n.a.	163-165 (cif)	n.a.
Ethylene	650a	385	355-365 (cif)	485-496 (May)
Propylene2	5001	312	315-328 (cif)	314 (May)
Butadiene	461-483a	273-283	340-360 (fob)	375 (June)
Benzene	5101	322	320-325 (fob)	300 (July)
Toluene	435a (ex works)	258	235-240 (fob)	243 (June)
Xylene	n.a.	n.a.	265-270 (fob)	258 (June)
Styrene	975-1020a	577-604	710-720 (T2) (nom) 690-705 (T1) (cif)	n.a.
Paraxylene	8971	560	700-710 (fob)	528 (Q3)
Orthoxylene	5601	350	335-340 (fob)	342 (May)
Methanol	440(fob)1	275	347-360 (T2) (fob) 295-305 (T1) (cif)	220 (May).
MTBE	1.38-1.45x1	n.a.	265-270 (fob)	n.a.
Ammonia	n.a.	n.a.	165-170 (CFR)	n.a.
Prices contained in this report are obtained by ECN 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, corn = 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 29 June 1994. Key: a Indicates Q2 contracts. 1 indicates Q3 contracts. 2 Polymer grade. Dollar prices are based on rates of exchange on 28 June: DM$1.585, FF:$5.433, Dfl:$1.779, $:£1.546. 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.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly