Outage pushes naphtha prices up

23 April 2001 00:00  [Source: ICB]

Naphtha prices have soared following low US gasoline inventories and Conoco's refinery fire at Killingholme in the UK. The knock-on effect of the run up in gasoline prices was transmitted tothe aromatics market with toluene, benzene and xylene prices all moving sharply upwards

Naphtha prices have shot up following the release of low US gasoline inventories and Conoco's Killingholme refinery outage in the UK. Prices for physical cargoes for May are between $261-262/tonne and around $268/tonne for prompt.

Ethylene spot prices are reported in the $600-620/tonne cif NWE range in the absence of any producer to consumer activity. Rising naphtha prices following Conoco's Killingholme fire are putting upward pressure on prices, with May numbers talked at the $620/tonne end of the range, according to some producers. However, others still quote $600-610/tonne cif NWE. Two major suppliers have still not agreed Q2 contract numbers.

Propylene business has been concluded at E450-455/tonne cif NWE for chemical grade and E455-460/tonne for polymer grade, both for May delivery. For inland business, prices are higher at E480-490/tonne FD. Players say a pickup in downstream PP demand, allied to outages, has kept the market snug.

Butadiene players have still not agreed Q2 contract numbers, with one seller suggesting that contract partners were still E30-40/tonne apart in price aspirations. Rising naphtha prices, the prospect of the Butachimie restart mid-May and DSM's technical problems have led to a more balanced market, but with no business done spot numbers are nominal and unchanged at $440-450/tonne.

Benzene spot numbers were up on last week as a 2000 tonne producer-to-end user sale was reported done at around $355/ tonne fob for April delivery. Players mentioned numbers of $360/tonne fob for May deliveries. The impact of the Conoco outage in the UK has yet to be felt but the $10/tonne run up in benzene numbers last week reflects naphtha price increases across the board.

European toluene numbers reacted to the swift run up of gasoline prices that followed the explosion at the Conoco refinery in the UK rather than to busier markets last week. Bids and offers were talked at $400-410/tonne fob NWE based on increasing blend values trade.

Xylene price ideas are seen firmer at $385-390/tonne fob NWE although no deals have been done at the higher level, as paraxylene buyers fear squeezed margins.

The styrene spot market was once again very quiet in Europe last week, with numbers notionally talked at around $340-345/tonne cif, but no major deals concluded. A first settlement of the quarter two contract barge price was confirmed at E700/tonne FD and other players said they would follow this new number (see page 14).

Paraxylene spot numbers are rising. Business was concluded in recent days at $460-462/tonne fob NWE for May delivery. Inter-trade offers for May have been heard as high as $470/tonne.

Buying activity is heating up amid expectation of higher prices to come in the wake of the Conoco outage and the run up in US gasoline prices. Turnarounds at Veba, Petrogal and EniChem into the third quarter are not expected to have a significant effect on the market.

Orthoxylene sellers report limited activity on the spot market as contract and spot numbers even out. Ideas have dipped below $430/tonne cif, although reports of Russian material arriving into Amsterdam caused little concern among sellers who feel the product will not disrupt the current tight market.

A couple of MTBE spot deals were reported to have been inked at $570-575/tonne fob NWE last week for April delivery. The run up in NWE numbers was underpinned by the hike in gasoline prices, sparked by the explosion at Conoco's UK refinery early in the week.

Offers for May deliveries were heard at around $580/tonne fob NWE.

Spot methanol markets in Europe were still described as quiet last week, with most activity focused on lifting contract volumes. Prices remain pegged at E242-243/tonne fob NWE and there were reports of demand from derivatives slowing down and talk of weaker numbers. Asian prices were reported to have come off and to be around $160/tonne cfr SEA. In the US, prices are still underpinned by a hectic MTBE market but are also starting to suffer from slower formaldehyde activity.

Ammonia markets in NWE continue to be marked by lack of spot enquiries and there are no signs these will surface in the near term. A tender was concluded in Greece this week at just below $145/tonne cfr with 120 days' credit, yielding around $110/tonne fob Yuzhnyy. A tender was issued last week by a Turkish buyer for small lots to arrive late May/mid-June.

• BULK CHEMICAL PRICES

	European contract q/tonne		European spot $/tonne	Change on last week
		$/tonne
Naphtha	na	na	261-262 (cif)	Z30
Ethylene	640 (Q2)	574	600-620 (cif)	Vnc
Propylene@	475 (Q2)	421	400-410 (cif)	Vnc
Butadiene	570 (Q1)	536	440-450 (fob) (nom)	Vnc
Benzene	390 (Q1)	369	355-360 (fob)	Z27
Toluene	420 (Q2)	375	400-410 (fob) (nom)	Z15
Xylene	na	na	380-385 (fob) (nom)	Z5
Styrenea	700-725 (Q2)	620-625	340-345 (fob) (nom)	Z10
Paraxylene	567 (Q2)	517	460-462 (fob)	Z8
Orthoxylene	494 (Q2)	441	430-435 (nom)	X7
Methanol	255 (Q2) (fob)	223	215-220 (fob) (T2)	Vnc
			195-220 (CFR) (T1)	Vnc
MTBE	na	na	570-575 (fob)	Z55
Ammonia	na	na	150-155 (CFR)+(nom)	Vnc

NOTES * TDI grade; @ Indicates polymer grade ;a Lower figure for barge price, higher;figure free delivery inland; + Indicates duty paid; R Revised

• ABBREVIATIONS and CURRENCY notes

Prices contained in this magazine 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 18 April 2001.

Dollar prices are based on rates of exchange on 17 April 2001. 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. $1=E1.134; $1=DM2.217; $1=£0.698; E1=DM1.956; E1=£0.616.

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