09 December 1996 00:00 [Source: ACN]
Suppliers hike propylene prices in tight markets
Naphtha: Prices of crude and naphtha were expected to ease once the UN and Iraq agreed on the terms for crude exports. However, players believe markets are unlikely to be affected before Iraqi exports actually begin. Strong demand and tight supply have kept prices steady, sources said.
Several buyers still need spot cargoes for first-half January delivery. One South Korean buyer was reportedly searching for a cargo for over a week without success.
Quotes for open-spec material were US$228-229/tonne cfr Japan for second-half January delivery. Premiums were still US$8/tonne for South Korean buyers and US$10/tonne for Japanese buyers.
Ethylene: Markets were quiet as availability remained limited. Buyer ideas in SEA were still US$450/tonne cfr or below. However, no one can sell at this level and prices of US$480-490/tonne cfr are more reasonable, suppliers said.
The Titan cracker in Malaysia has successfully restarted after an unscheduled shutdown in November, although the startup of the PE plant was not confirmed. Traders do not expect to see exports from Malaysia this month. Surplus Malaysian cargoes were reportedly shipped to India, Indonesia and Taiwan in November. South Korean producer offers are US$430-440/tonne fob Korea for December shipments, but buyer ideas are US$450-460/tonne cfr Taiwan. Buyers are pushing for December prices below the November level of US$490-500/tonne cfr Taiwan.
Japanese traders have begun contract negotiations for 1997 term supply.
Propylene: Prices in SEA rose by US$5-10/tonne. A 2000-tonne cargo was sold at US$520/tonne cfr SEA for first-half January arrival. Tight supply has limited the number of spot deals. Suppliers are aiming for US$530/tonne cfr SEA for new fixtures.
Butadiene: Suppliers in South Korea and Japan are trying to hike contract prices for 1997 term supply to Taiwan (ACN 9 December p24).
A South Korean producer has sold a 1500-tonne cargo for first-half December delivery to China. The deal was made through a trader at US$490/tonne cfr China. The producer has a second cargo of 1000 tonne available for export in second-half December and is offering at US$480/tonne cfr China.
Methanol: Suppliers are offering at US$185/tonne cfr SEA for December and early-January delivery. Few spot fixtures have been concluded in tight markets. Producers expect prices to remain at US$180/tonne cfr SEA in December.
MTBE: Prices held steady in the US$270-275/tonne fob Singapore range for December fixtures. One 1000-tonne cargo was concluded at this level for December delivery to a Singapore refiner.
South Korean suppliers have yet to determine an offer price for December exports. One producer achieved US$280/tonne fob Korea in November for exports to west-coast US. The producer said it will not export if the market price fails to meet its cash costs.
Ammonia: China Petrochemical Development Corp closed a tender on 3 December for mid-January delivery of 14 000 tonne. A second round of bidding was held on 4 December. The price was not settled as ACN went to press, but the first round of bids were in the US$290-300/tonne cfr Taiwan range.
Japanese suppliers were still talking with buyers about price hikes. Producers want to hike prices by Yen8-10 (US$0.07-0.09)/kg to cover rising raw material costs based on naphtha. Traders say negotiations are unlikely to be concluded until January or February.
|Bulk chemical spot prices - US$/tonne|
|NE Asia1||SE Asia2||US3||NWE4|
|Naphtha||228-229 cfr Japan7||-||na||na|
|Ethylene||430||470 cfr Indonesia||0.2425-0.2475/lb Oct||880|
|Butadiene||490 cfr China||-||0.21/lb||630|
|Methanol||170 cfr Korea||185||0.47-0.49/gal||247 fob|
|MTBE||280 cfr Taiwan||270-275 fob Singapore||88.5-126/gal Oct||na|
|Ammonia||276 cfr Korea||-||na||na|
|1 Prices are fob Korea unless otherwise
2 Prices are cfr SEA unless otherwise indicated
3 US prices are October contract levels on an fob basis unless otherwise indicated
4 European FD Q4 contract price in DM/tonne, courtesy of ECN
5 Polymer grade
6 No recent business
7 Quote for second half of January
MoPJ = Mean of Platt's Japan
na = not available
Prices contained in this report are obtained by the ACN team through consultation with producers, consumers and merchants in the regions indicated. They are a guide to price levels of recent business and reflect medium to large tonnage sales. Spot prices are quoted as indicated: cfr - cost and freight; fob - free on board, cif - cost, insurance and freight; FD - free delivered. Spot prices are based on information available mid-week prior to the date of issue. Dollar prices are based on prevailing rates of exchange.
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