Paraxylene soars on US shutdown

30 April 2001 00:00  [Source: ICB]

BP's announcement of its Texas capacity shutdown for market reasons, provoked an immediate reaction from the paraxylene market, with US and European prices leaping up. Meanwhile, naphtha prices are still on the up following the Conoco explosion

Naphtha prices continued to rise in the light of last week's Conoco Killingholme refinery outage, which has confirmed ideas of a tightening market. Prices are in the range of $263-267/tonne cif NWE, although spot activity is thin, with limited buying interest from the petrochemical sector.

Ethylene spot markets proved very quiet last week, with little or no business openly reported. Prompt supply is tight following on from a number of production outages. Price ideas for May delivery are around $600-620/tonne cif, with a major producer looking for some material to cover a shortfall at these levels. Several players are still not accepting the Q2 settlement of E640/tonne, arguing it is too low given rising feedstock levels and tight supply. Cracker margins are said to be very thin at these levels.

Propylene spot markets are also quiet and material availability is said to be balanced to short. Chemical grade railtank lots are temporarily very tight, prompting ideas around DM950-960/tonne. Otherwise, ideas for polymer grade material are said to be just below contract levels, at $405-415/tonne cif. Players expect prices may soften in May/June as some derivative demand disappears and new propylene capacity is brought onstream. US imports could also help ease supply. Demand from PP is reported strong, but oxo-alcohols are weaker.

Butadiene supply in Europe is long but activity in spot terms is quiet. A Q2 settlement at E520/ tonne, down E50/tonne, received initial acceptance from at least two other players. One producer said this was a bit lower than they would have liked, but in the light of low demand, especially from some rubber sectors, it was acceptable. Spot ideas are still nominally in the range $440-450/tonne fob.

Benzene was thinly traded, although news of the BP Texas City plant shutdown in the US prompted speculation about possible shipments to the east coast during May. Prices remained stable with some deals concluded in the current range of $355-360/tonne fob for May delivery.

Toluene markets were also lacklustre this week, with numbers quoted in the current range at $400-410/tonne and very slow demand from chemical markets. Gasoline is underpinning numbers and supporting demand.

Xylene prices have firmed to $390-395/tonne with the steep rise in US gasoline values the main factor driving a push for higher numbers. Offers are heard at around $400/tonne. The distribution and isomerisation sectors are well supplied, and the restart of Gonfreville should ease some of the tightness in the European market.

Paraxylene prices leapt up this week after BP announced an indefinite shutdown of production capacity at its Texas City operations in the US. European spot conclusions have been reported in the $495-505/tonne fob range with offers heard as high as $520/tonne.

Market activity is brisk as buyers are currently anticipating the effects of increased exports to the US in the wake of the BP outage. Sources report 15 000 tonne already lined up for shipment from Rotterdam to the US in May.

Orthoxylene prices failed to show the strength of other xylenes, dipping slightly to $425-430/tonne cif. At this level US buyers may start to show more interest in imports from Europe, which could lend some support to prices.

European MTBE numbers are stable at $570-575/tonne fob NWE. Offers were heard as high as $580/tonne, but bids are still slow to surface for May product. Gasoline prices are still the focus of attention across the markets and there is talk of renewed interest from the US for May shipments. Lyondell's 590 000 tonne/year Botlek plant in the Netherlands was taken down for maintenance last week and is expected to be down for five/six weeks.

Methanol offers for May spot product were still made below the quarter two contract price at E242/tonne fob Rotterdam but with no takers. Buyers are still lifting contract volumes and there is very little sign that spot activity will improve in the next few weeks as demand from derivatives remains subdued.

Ammonia prices continue to slide with little hope for recovery. Numbers were quoted at around $90-100/tonne fob Yuzhnyy this week, which indicates notional prices of around $135-140/tonne CFR NWE.

Fertiliser production is still reported to be down at technical minimum in Europe as demand is slow to recover. Some players talked about possible cutbacks in the Former Soviet Union as the only way to re-balance the market.

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 25 April 2001.

Dollar prices are based on rates of exchange on 24 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=E1.119; $1=DM2.188; $1=£0.696; E1=DM1.956; E1=£0.623.

BULK CHEMICAL PRICES

	European		European	Change on
	contract		spot	last week
	E/tonne	$/tonne	$/tonne
Naphtha	na	na	263-267 (cif)	+6
Ethylene	640 (Q2)	574	600-620 (cif)	nc
Propylene@	475 (Q2)	421	405-415 (cif)	+5
Butadiene	520 (Q2)	464	440-450 (fob) (nom)	nc
Benzene	380 (Q2)	340	355-360 (fob)	nc
Toluene	420 (Q2)	375	400-410 (fob) (nom)	nc
Xylene	na	na	390-395 (fob)	+10
Styrenea	700-725 (Q2)	620-625	340-345 (fob) (nom)	nc
Paraxylene	567 (Q2)	517	495-505 (fob)	+40
Orthoxylene	494 (Q2)	441	425-430 (nom)	-5
Methanol	255 (Q2) (fob)	223	215-220 (fob) (T2)	nc
			195-220 (CFR) (T1)	nc
MTBE	na	na	570-575 (fob)	nc
Ammonia	na	na	135-140 (CFR)+(nom)	-15

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

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly