Ethylene/propylene prices surge

04 September 2000 00:00  [Source: ICB]

Naphtha prices continued to shift upwards on the back of rising crude prices.

Ethylene markets have been responding to unscheduled cracker outages, which have tightened availability. Both traders and industry players have been active. Prompt material remains difficult to source, although business is said to have been concluded at $780-800/tonne. Product being sourced out of the US, for second half September delivery, is quoted at even higher numbers.

Propylene markets have tightened in response to a series of plant shutdowns. The level of activity has risen, after a number of quiet weeks. Spot prices are now quoted at $560-580/tonne, although it is unclear if business has been done at the higher end of the price range. Around 30 000 tonne of deep-sea material is moving to western Europe, for end-September delivery.

Butadiene markets had another quiet week. Spot prices are quoted at $530-540/tonne fob but no deals were reported. Product is extremely tight. There is speculation that prices could move higher as a number of leading producers go into maintenance. The US September contract remains unchanged at 26 cent/lb.

Benzene spot numbers have drifted down. Latest prices were fixed in the range $410-420/tonne cif NWE in mostly intertrade business. Producers say supply has eased although it is still fairly snug for prompt availability. Imports are scarce. US producers have nominated $1.50/gal for September contracts following August's eventual settlement at $1.45/gal. Spot ideas are about $1.48-1.49/gal fob US Gulf.

Toluene markets are lacklustre with prices notionally talked around $340-350/tonne fob NWE. Gasoline demand has weakened and a 5000-6000 tonne cargo is due to arrive this month from the US. Most is already placed.

Xylenes have been a quiet market this week. Prices have stuck in the region $395/tonne. US prices continue to soften to $1.02-1.03/gal fob USG, and US material brought into Europe is on offer at around $340/tonne cif.

Styrene numbers have risen to $740-750/tonne fob NWE. Supply is good and producers' stocks have recovered. BASF has planned maintenance at Antwerp for 3-4 weeks this month and BP will have a catalyst change in Marl during the second half of September. US spot is 33-34 cent/lb and Asian numbers are heard at $730-750/tonne fob Korea.

Paraxylene spot prices increased to $425-428/tonne fob Rotterdam before falling back to 418-420/tonne although some traders still talk higher prices in the $430-440/tonne range. Material is currently coming into Europe from Iran and Russia. BP will make a decision within the next few days on a scheduled shutdown at Geel, which may be put back to Q4.

Orthoxylene buying interest is non-existent in the spot market this week. A wide range of prices are suggested, with $420-430/ tonne FOB NWE the average in the absence of any deals.

Methanol outages in Europe at Statoil and Veba have further tightened the European market and lifted prices to DM440-450/ tonne fob Rotterdam. Veba, hit by a power cut, has lost two weeks production at Gelsenkirchen. Statoil has lost up to 20000 tonne production. Problems are also reported at the Condea unit.

MTBEprices continue weak in spite of higher crude and gasoline numbers. Buyers talk prices close to $400/tonne fob Rotterdam. Producers say offers are at $415/ tonne but deals done are at market related prices, suggesting buyers expect further price weakness. At current levels the factor to gasoline has dropped below 1.3X. In the US prices are steady at $1.11-1.12/gal USG.

Ammonia prices have slipped to $118-122/tonne fob Yuzhnyy, as demand has not fully recovered after the slow summer period. Tenders from Morocco, South Africa and Turkey have entered the market and will be awarded shortly. Algerian and Libyan output is working towards full capacity.

Bulk chemical prices

	European contract		European spot	Change on	US contract
	q/tonne	$/tonne	$/tonne	last week	price $/tonne
Naphtha	na	na	275-280 (cif)	+8	na
Ethylene	685 (Q3)	646	780-800 (cif)	+20	694-705 (July)
Propylene@	595 (Q3)	561	560-580 (cif)	+20	606 (July)
Butadiene	510 (Q3)	481	530-540 (fob)	+15	573 (Sept)
Benzene	470 (Q3)	443	410-420 (fob)	-30	478 (July)
Toluene	463 (Q3) (fob)	440	340-350 (fob)	+10	na
Xylene	na	na	395-400 (fob)	-7	385 (July)
Styrenea	925-950 (Q3)	907-931	740-750 (fob)	+40	937-1003 (June)
Paraxylene	590 (Q3)	557	415-420 (fob)	-5	545 (Q3)
Orthoxylene	499 (Q3)	474	420-430 (fob)	nc	496 (July)
Methanol	210 (Q3) (fob)	198	202-206 (fob) (T2)	+2	201 (July)
			195-200 (CFR) (T1)	+2
MTBE	na	na	405-410 (fob)	-4	na
Ammonia	na	na	165 (CFR)+	-5	na

Key & Notes

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, 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), na = not applicable, m = monthly contracts.
Spot prices in this issue are based on information available on 30 August 2000.
Dollar prices are based on rates of exchange on 29 August 2000
$1=q1.116; $1=DM2.182; $1=£0.685; q1=DM1.956; q1=£0.614.
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
@ Indicates polymer grade
a Lower figure for barge price, higher
figure free delivery inland
+ Indicates duty paid
R Revised

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