Supplies meet reticent demand

30 October 2000 00:00  [Source: ICB]

Naphtha markets remained relatively quiet as numbers slipped back to $288-293/tonne cif NWE. The expected pick up in petrochemical demand has yet to materialise. Lengthening availability has contributed to the downward pressure on prices. Improvements in transatlantic activity should support prices.

Ethylene producers talk of being covered this week, with few admitting to operating in the open market. The continued restart of the EniChem Priolo cracker and the Mosmorran unit has added to the perception of improved availability. Prices have drifted down to $740-760/tonne cif NWE. There is unconfirmed trader activity at prices below general levels. Sliding Far Eastern prices are contributing to lower European price ideas.

Propylene spot prices continue to dip, with prices in the range of $500-510/tonne cif NWE. Demand for prompt material was said to be rising, with offers for material in the market. However, lower derivative output continues to decrease price ideas. Producer swaps are a feature of the market.

Butadiene markets remain extremely quiet, with very little spot activity. Prices remain within a nominal price range of $550-570/tonne fob NWE, although there were no confirmed new deals.

Benzene prices were slightly up on last week with deals concluded at $374/tonne for a 1000 tonne parcel and at above $375/tonne cif NWE for a barge. However, prices dipped again later in the week. The bid/offer range is at $368-375/tonne fob NWE. Availability is good. Conoco took its Immingham HDA unit down for one week.

Toluene trade was again thin this week although some enquiries were heard. The bid/offer range rose above $360, then fell back to $350-360/tonne fob NWE. Prices in the low-mid-$350s/tonne fob were understood to be under discussion.

European xylene prices are under pressure from weakening US price levels. In the US Gulf November prices are $1.03-1.04/gal. The weakening euro and the strength of gasoline in Europe has held European prices in the $370-380/tonne range, leaving scope for further xylenes shipments from US to Europe.

Styrene supplies are plentiful in Europe while demand remains sluggish. Prices are under pressure with bids reported as low as mid-$650s/tonne cif NWE. Some offers were heard at DM1600/ tonne FCA for trucks.

Paraxylene production at the 120 000 tonne/year Gonfreville unit will not restart until mid-November. This, combined with the DEA refinery maintenance outage and shutdowns at Ufa and Omsk in Russia, is keeping the European market reasonably snug. Prices remain within the $415-420/tonne fob NWE range.

Orthoxylene prices remain firm because of outages and the restart at the Sisas Ostend PA unit and are in the $430-435/tonne range. Weak PA demand and falling xylene numbers could pressure prices once outages are over.

Methanol markets are still dominated by contract tonnage lifting and spot trade is mainly concentrated in Central Europe. Product will be tight in Germany this month, due to the Veba and DEA shutdowns. Players believe spot enquiries during the second half of this quarter will push prices up. The range currently remains at DM480-500/tonne fob NWE for T2 material.

MTBE offers were heard slipping to $380-390/tonne fob NWE, mainly due to lack of buying interest. Players said this range may prove attractive to buyers, who are keeping out of the spot market mainly due to the uncertainty surrounding oil prices.

Ammonia traded at around $150/tonne fob Yuzhnyy this week following a producer-to-trader deal for end-November lifting. Tender business for over 60 000 tonne to be delivered in November/ December closed this week. An NWE producer bought a cargo at $195/tonne CFR and was heard to be receiving offers in the low $200s/tonne as ECN went to press.

Bulk chemical prices

	European contract	European spot		Change on	US contract
	q/tonne	$/tonne	$/tonne	last week	price $/tonne
Naphtha	na	na	285-295 (cif)	nc	na
Ethylene	705 (Q4)	615	740-760 (nom)	-15	661-705 (Oct)
Propylene@	595 (Q4)	519	500-510 (cif)	-17	528 (Oct)
Butadiene	590 (Q4)	515	550-570 (fob) (nom)	nc	617 (Oct)
Benzene	470 (Q4)	401	368-375 (fob)	+2	418 (Oct)
Toluene	400 (Q4) (fob)	349	350-360 (fob)	nc	na
Xylene	na	na	370-380 (fob)	nc	113 (Oct)
Styrenea	890-915 (Q4)	756-777	660-670 (fob) (nom)	-30	672 (Oct)
Paraxylene	585 (Q4)	503	415-420 (fob)	nc	554 (Q4)
Orthoxylene	510 (Q4)	445	430-435 (fob)	nc	462 (Sept)
Methanol	255 (Q4) (fob)	218	220-225 (fob) (T2)	nc	220 (Aug)
			195-220 (CFR) (T1)	nc
MTBE	na	na	395-405 (fob)	nc	na
Ammonia	na	na	195-198 (CFR)+	+13	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 25 October 2000.
Dollar prices are based on rates of exchange on 24 October 2000
$1=q1.195; $1=DM2.336; $1=£0.690; q1=DM1.956; q1=£0.578.
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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