Force majeure hits olefin markets

06 February 1997 00:00  [Source: ICB]

Naphtha rose to $191-192/tonne cif NWE but fell to $186-188/tonne cif in the week as crude lost 70-80 cent/bbl. Trade is quiet. A 7000 tonne cargo offered at $187/tonne cif NWE for 1-5 June attracted little interest. June/July swaps at $188/ tonne and $188.5/tonne cif NWE reflect a stable market.

Ethylene spot markets were quiet early in the week with buyers unwilling to commit ahead of Q3 contract talks. Veba declared force majeure on 28 May for ethylene and propylene when attempts to restart Gelsenkirchen 3 after scheduled maintenance failed. The cracker is expected to be down for two weeks. ICI's Wilton cracker is also said delayed until 2-3 June.

Propylene spot markets are lacklustre with new business confined to sales of small lots of railcar or barge material. No large quantities are changing hands, with US material uncompetitive at present.

Butadiene spot markets are quiet with European plant turn-arounds underway and supply balanced to tight. US contracts are said to have rolled over at 20 cent/lb in June despite low US inventories. Korean sellers were looking to place a June cargo in the US, but no business is done.

Benzene spot markets are quiet. Numbers are weak and offers for July are at $285-288/tonne cif ARA, with prompt higher at $290-295/tonne cif. Availability is good with 10 000-15 000 tonne arriving this week from Brazil and Israel. Condea's aromatics unit at Schwedt is down for maintenance until the end of June and Conoco's Immingham HDA and reformer units are due up this week. US spot is down to 90-91 cent/gal.

Toluene spot is firm. A 1000 tonne intertrade deal was completed at $282/tonne fob Rotterdam with other business done at $283/tonne fob for June, and a deal reported at $290/tonne fob. Problems at a NWE producer plant added to market tightness.

Xylene was sold in 1000 tonne lots at $312/tonne fob Rotterdam with a 500 tonne parcel sold at $315/tonne fob Rotterdam. Truck business at $325-330/tonne FD is stable with strong enquiries.

No business is reported in styrene. Truck business is talked at DM980-1000/tonne FCA. Prompt supply is tight with only small parcels available. A 7000 tonne US cargo due in mid-June is committed. Asian prices have fallen with $480/tonne fob Korea done for a 3000 tonne parcel.

Paraxylene remains tight and demand strong. Numbers are at $590-595/tonne fob Rotterdam, with no deals done. A trader bidding at $580/tonne fob could not find material below $590/tonne fob. A distributor said lack of ship space and PX could restrict US/ Canadian imports for July delivery.

Orthoxylene is balanced, with offers of $385/tonne meeting bids of $375/tonne fob Rotterdam. No material is being exported from Ufa in Russia. Demand is low with no reported enquiries from India.

Methanol spot business in the DM335-340/tonne fob NWE range suggests prices are softening with the market expecting a troublefree startup of the 830 000 tonne/year Statoil unit at the start of June. T2 and T1 spot material is available but buyers continue to take only contract quantities with some suggestions that demand from the formaldehyde business has softened in Q2. Prices in the US and Asia remain in the 59-60 cent/gal and $220-240/tonne CFR range.

MTBE prices rose as demand in Europe coincided with strengthening gasoline and crude. Prices look to have peaked with the highest deal confirmed at $282/tonne fob NWE. As ECN went to press falling crude and gasoline had begun to pull down prices. Traders talked offers at $281/tonne and bids at $278/tonne fob NWE. Producers say no volume is available below $281/tonne with Arco in a six-week shutdown at its Dutch unit. US prices peaked at 82 cent/gal fob US Gulf and fell to 78 cent/gal as gasoline prices fell.

Ammonia business includes 30 000 tonne sold to NWE in the $170s/tonne CFR duty unpaid and 18 000-20 000 tonne sold to Sagunto and Cartagena, Spain for mid-end June at $177/tonne CFR duty paid with 90 days. Morocco closed a tender on 28 May for 16 000-18 000 tonne for 14-16 June delivery. In Greece, PFI and Synel tendered for 8000-10 000 tonne for 26-30 June delivery and 3000 tonne for 18-23 June delivery respectively on 2 June.

Bulk chemical prices
	European contract		European  spot	Change on	US contract
	DM/tonne	$/tonne	$/tonne	last week	price $/tonne
Naphtha	n.a.	n.a.	186-188 (cif)	down 2	n.a.
Ethylene	10204	608	670-675 (cif) (nom)	no change	573-595 (Apr)
Propylene1	8754	513	560-570 (cif) (nom)	no change	468 (Q2)
Butadiene	6804	392	330-350 (fob) (nom)	no change	441 (May)
Benzene	5704	333	285-295 (fob)	down 8	315 (May)
Toluene	4354 (fob)	259	280-290 (fob)	up 3	265* (Apr)
Xylene	n.a.	n.a.	310-315 (fob)	no change	262 (May)
Styrenea	1040-10854	608-634	560-570 (T2) (fob) (nom) 540-550 (T1) (cif) (nom)	no change no change	617-661 (Apr)
Paraxylene	7954	465	575-590 (fob)	up 3	475 (Q2)
Orthoxylene	6704	399	380-385 (fob)	no change	408 (May)
Methanol	3444 (fob)	205	195-200 (T2) (fob) 190-195 (T1) (cif) (nom)	no change no change	200-204 (Apr)
MTBE	n.a.	n.a.	278-282 (fob)	up 8	n.a.
Ammonia	n.a.	n.a.	192-197+ (CFR)	no change	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, bid = 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 in this issue are based on information available on 28 May 1997. Dollar prices are based on rates of exchange on 27 May DM:$1.701; FF:$5.739; Dfl:$1.913; $:£1.629. 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. * TDI grade 1 Indicates polymer grade a Lower figure for barge price, higher figure free delivery inland + Indicates duty paid 2 Indicates Q2 contracts

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