C2 stocks high

17 August 1998 00:00  [Source: ACN]

Ethylene production fell during July but supply still outstrips demand

Ethylene: Production for July was 4.494bn lb, which on a daily basis represented a 1% reduction compared to the previous month. Operating rates stood at 93.2%.

Even at reduced operating rates, supply remains greater than demand. This gap will widen when the 700m lb/year expansion by Union Carbide at Taft comes onstream in August. The full impact of the startup will not be felt until September.

Contract price negotiations for May and June supplies of ethylene have yet to be completed. Discussions centre on a decrease of 0.75 cent/lb in May to 19.25 cent/lb followed by another decrease of 0.50 cent/lb in June to 18.75 cent/lb.

Cash costs were as follows:

Gas oil

5.7 cent/lb

Natural gasoline

6.9 cent/lb

Propane

7.6 cent/lb

Butane

8.5 cent/lb

Ethane (spot)

10.5 cent/lb.

Propylene: Contract prices for July for chemical grade and polymer-grade propylene were established at 12.5 cent/lb and 1 cent/lb, respectively. Refinery-grade propylene prices were 8.5 cent/lb and 9.5 cent/lb.

Steam cracker operating rates have been declining, but have had little effect on production as feed slates have become heavier.

Butadiene: The July contract price was 17 cent/lb, unchanged from June. Inventories dropped 18m lb to 166m lb.

Stocks of pure butadiene have been declining for the last three months. However, crude butadiene stocks are high. These are the result of extraction unit turnarounds and persistent production problems. High inventory levels combined with the drop in the butadiene contract price to 16 cent/lb, which took effect on 1 August, should deter imports from Europe.

Methanol: Demand exceeded supply due to increased imports. Buyers were paying 35-38 cent/gal. Spot prices were 28-30 cent/gal. MTBE: Production increased to 204 000 bbl/ day in June, up 9000 bbl/day over May. Stocks increased by 362 000 bbl to 8.762m bbl. Prices were 66-70 cent/gal.

Acrylonitrile: Prices for export were in the range US$480-510/tonne fob USGC.

VCM: Demand for ethylene dichloride and VCM continued to slide. June PVC and ethylene prices declined from May levels. Pace estimates the slippage reduced VCM formula prices by 1.1 cent/lb to 15.2 cent/lb. A further 1cent/lb decline in PVC in July should lower the VCM formula price to 14.6 cent/lb in July.

Ethylene glycol: Fibre-grade ethylene glycol (EG) prices are around 27 cent/lb, with net prices expected to be lower following discounts. List prices have not changed, but discounts have increased during the year. Antifreeze EG prices were up 2-3 cent/lb to an average of 23 cent/lb.

Benzene: July contract prices settled at 75 cent/gal, unchanged from the previous month. Spot prices were 71-73 cent/gal.

Toluene: Spot prices declined along with gasoline markets. They were in the 63-64 cent/gal range in late July.

Mixed xylenes: The July contract price increased 3 cent/gal from May to 69 cent/gal. Spot prices were 63-64.5 cent/gal late July.

Styrene: Spot prices in July were at 16.5- 19 cent/lb. The July contract price for styrene stood at 24.5-26.5 cent/lb, a rollover from May.

Paraxylene: Q3 contract prices were settled at 15.75 cent/lb. Buyers demanded, and received, contract prices competitive with those being charged in Europe and Asia.

Orthoxylene: The contract price was agreed at 14 cent/lb for June, down 0.5 cent/lb from May. The contract price for July was rolled over at 14 cent/lb.

US bulk chemical prices*

Contract

Spot

June

July

July

Aug

Ethylene5

18.75-19.252

17-17.5

12.75-13.75

na

Propylene7

14

14

11-11.5

na

Butadiene

172

17

14.25-14.50

na

Methanol4

35-48

na

28-30

na

MTBE4

76

74.52

63-64

67-692

Acrylonitrile8

490-510

480-510

na

na

Ethylene glycol3

27

27

na

na

VCM

15.22

14.62

na

na

Benzene

75

75

782

71-73

Toluene4

na

na

63-64

702

Xylenes4,6

66

69

63-64.5

702

Styrene

24.5-26.5

24-262

16.5-19

182

Paraxylene

15.75

15.75

na

na

Orthoxylene

14

14

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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