C2 slips further

20 July 1998 00:00  [Source: ACN]

Ethylene production rises slightly as antifreeze canning gets underway

Ethylene: Production for June was 4.4bn lb (2m tonne), up about 3% daily compared with the previous month. Operating rate was 92.2% of nameplate capacity in June.

Ethylene consumption in Q1, as calculated from a survey, was 141.6m lb/day. Consumption in Q2 is closer to 143.4m lb/day. Last quarter, the price of ethylene was falling rapidly. It was prudent for buyers to minimise ethylene purchases and work off higher cost inventories.

PE demand is typically stronger at this time of year and the antifreeze canning season has just begun. The estimate from the survey for Q2 may be too conservative.

The contract price for ethylene for April was settled at 20-20.5 cent/lb. Negotiations for May have not been completed. Discussions are on a 0.75 cent/lb drop in May, followed by another fall of 0.5 cent/lb in June to 19.25 cent/lb and 18.75 cent/lb respectively.

Cash costs for producing ethylene decreased for various feedstocks. The rank order was:

Natural gasoline

5.6 cent/lb

Gas oil

6.3 cent/lb

Propane

6.7 cent/lb

Butane

7.2 cent/lb

Ethane (spot)

10.1 cent/lb.

Propylene: Contract prices for June for chemical- and polymer-grade propylene were established at 12.5 cent/lb and 14 cent/lb, respectively.

Refinery-grade propylene contract prices were 8.5-9.5 cent/lb in June.

Butadiene: The June contract price was 17 cent/lb, unchanged from May. Inventories have been declining since March. They dropped 17m lb to 184m lb in June. Coproduction rose as steam-cracker operating rates were higher.

Imports of pure butadiene have been increasing since March. However, crude butadiene prices have been declining, but are expected to reverse course in July.

Methanol: Supplies were more than ample due to increased imports. Large buyers were paying 35-38 cent/gal. Spot prices were in the 24-26 cent/gal range.

MTBE: Production fell to 195 000 bbl/day in May, down by 14 000 bbl/day from April. Stocks fell by 625 000 bbl to 8.4m bbl. June prices were in the 67-69 cent/gal range.

Acrylonitrile: Prices for export were in the US$490-510/tonne fob USGC range.

VCM: Attempts to raise PVC prices in April and May were unsuccessful. VCM formula prices settled at 16.75 cent/lb in April and are projected to be 16.3 cent/lb in May. EDC export prices were US$110-120/tonne fob US Gulf in June. VCM export prices were US$250-270/tonne fob US Gulf in June.

Ethylene glycol: Fibre-grade ethylene glycol (EG) prices for Q2 are 27 cent/lb. Net prices were lower after discounts. Antifreeze EG prices were 18-20 cent/lb with producers attempting to raise prices by 2 cent/lb. Prices are forecast to remain stable.

Benzene: June benzene contract prices settled at 75 cent/gal, a fall of 2 cent/gal from May. Spot prices were 73-74 cent/gal.

Toluene: Spot prices continue to track gasoline markets with little support from chemical demand. Prices were in the 67-68 cent/gal range in late June. The calculated gasoline-blending value for toluene in late June was 68 cent/gal for conventional gasoline and 65.5 cent/gal for reformulated gasoline.

Mixed xylenes: The June mixed-xylenes contract price decreased 2 cent/gal from May.

Paraxylene: Q2 paraxylene prices were settled at 15.75 cent/lb, down 3.25 cent/lb in Q1. A proposal to raise prices by 0.75 cent/lb, effective in Q3, is being discussed.

Styrene: Spot prices were around 16.5-19 cent/lb. Contract price was 24.5-26.5 cent/lb.

US bulk chemical prices*

	Contract		Spot
	May	June	June	July
Ethylene5	19.25-19.752	18.75-19.252	13.5-14	12.75-13.75
Propylene7	14.25	14	11-11.5	11-11.5
Butadiene	17	172	14-14.5	14.25-14.50
Methanol4	30-38	30-382	24-26	na
MTBE4	74.36	76	67-692	67-692
Acrylonitrile8	480	490-510	na	na
Ethylene glycol3	27	27	na	na
VCM	16.32	16.12	na	na
Benzene	77	75	73-74	782
Toluene4	na	na	66	682
Xylenes4,6	68	66	68	66
Styrene	24.5-26.5	24-262	16.5-19	182
Paraxylene	15.75	15.75	na	na
Orthoxylene	14.5	14.52	na	na

¹ actual
² estimate
³ fibre grade
⁴ cent/gal
⁵ list contract
⁶ fob Gulf Coast
⁷ polymer grade
⁸ US Gulf Coast export price in US$/tonne fob US Gulf

Prices are cent/lb unless indicated. na=not available *The information contained in this table is based on data supplied by Pace Consultants, 4848 Loop Central Dr. II, Houston, Texas 77081, USA.

Tel: +1 713 669 7803, Fax: +1 713 661 8476.

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