Market trends: MTBE values continue to slide

27 October 2003 00:00  [Source: ICB]

MTBE numbers dropped to $295-305/tonne fob NWE as low demand forced producers to accept lower prices. Producers are hoping for a rise in buying activity during November

Naphtha prices have slipped to $268-270/tonne cif NWE, drifting down with crude oil, which has come off the recent peak. Activity is described as slow.

Ethylene spot numbers con­tinue to firm, up to $620-630/tonne, although prices remain largely notional as prompt material is difficult to find, despite the resolution of the cracker problem in France and the expectation that the FAO Antwerp unit will finally come back online. Cracker operators with turnarounds or who are due to go into turnaround shortly are believed to be in the market. Material from Asia is now said to be coming to Europe, although open tonnage is difficult to find.

Propylene markets are described as extremely quiet. Notional spot prices remain in the range of €380-390/tonne cif NWE, although players say prices are coming under downward pressure. Derivatives are largely relying on contract volumes, with little spot interest.

Butadiene spot prices are unchanged at $520-530/tonne fob NWE. Spot parcels are hard to find so numbers remain largely notional. Despite some grumbling over the Q4 contract, a rollover of €520/tonne from Q3, an alternative contract price is unlikely to emerge.

Benzene spot business was understood to have been concluded in the $415-425/tonne fob NWE. Prices have fallen due to a lower energy complex but also because of lower consumption from derivatives due to production outages downstream. The market is described as balanced to long, while some players believe some tightening may occur during the second half of November.

Toluene spot numbers are relatively stable in the $410-415/tonne fob NWE range but they remain notional. The slight reduction at the top of the range was triggered by the lower gasoline values that had emerged by midweek.

Xylenes appear unaffected by the volatility manifest in other markets. Prices remain in the $445-455/tonne fob NWE range, and sources report spot prices in the US around $1.33/gal.

Paraxylene prices fell as feeble European demand and the drop in crude numbers eroded recent gains. Sales are reported at $530/tonne fob NWE with buyers bidding at $515-520/tonne for November product. Talk of the oversupplied market was not helped by news of ExxonMobil's PX restart at Jurong and a PTA outage in Taiwan.

The orthoxylene Q4 contract price was settled with all but one supplier at €445/tonne, up €27/tonne on Q3. Spot activity was reactivated by the news with business reported at $480/tonne fob German port. Weakening PX numbers may give room for OX spot prices to fall further, observers said.

Styrene spot values followed the ups and downs of benzene and the current range points to an uncertain outlook. Bids and offers are at $650-695/tonne fob NWE, but no real business was reported based on these numbers last week. Production problems continue in Europe, while the Asian market has suffered some losses due to subdued activity with numbers now around $680/tonne fob.

Methanol spot markets remain lacklustre with only minimal activity reported at €175-178/tonne fob NWE. Following the acceptance of €190/tonne fob NWE as the new quarterly contracts, players are concentrating on contract volumes. Supplies are described as comfortable in NWE, while the Rhine situation is slowly normalising.

MTBE prices slid to $295-305/tonne fob NWE as producers were forced to accept much lower numbers in order to stimulate sales. The factor to gasoline is subsequently exceptionally low at 1.05-1.06. Sellers hope increased buying activity will stem the price slump and peg prices around $300/tonne fob into November.

The recent spate of spot ammonia purchases in France, the Netherlands and other NWE countries, has brought delivered numbers up in the $250s/tonne CFR. There are no signs of weakness in the Black Sea as volumes continue to be booked for the US market. Tampa contract numbers are up $5/tonne to $250/tonne CFR for second half October tonnage.

Bulk chemical prices

	European spot €/tonne	$/tonne	Change on last week	European contract €/tonne	$/tonne	US contract $/tonne
Naphtha	na	268-270 (cif)	-16	na	na	na
Ethylene	na	620-630 (cif) (nom)	+5	445 (Q3)	516	622 (Aug)
Propylene¹	380-390 (nom)(cif)	na	nc	425 (Q4)	497	473 (Sept)
Butadiene	na	520-530 (fob) (nom)	nc	520 (Q4)	608	639 (Oct)
Benzene	na	415-425 (fob)	-27.5	375 (Q4)/375 (Oct)	430/430	343 (Oct)
Toluene*	na	410-415 (fob) (nom)	-1	333 (Q4)	392	na
Xylenes	na	445-455 (fob)	nc	na	na	390 (Oct)
Paraxylene	na	530-540 (fob)	-30	522 (Oct)	609	639 (Sept)
Orthoxylene	na	480-490 (cif)	-5	445 (Q4)	518	540 (Sept)
Styrene²	na	650-695 (fob)	-27.5	655-680 (Q4)	778-796	890 (Aug)
Methanol	175-178 (fob)	na	-1.5	190 (Q4)	221	193 (Oct)
MTBE	na	295-305 (fob)	-40	na	na	na
Ammonia	na	245-252 (CFR)	+6	na	na	250 (CFR) (2H Oct)
NOTES *TDI grade; ¹Indicates polymer grade ; ²Lower figure for barge price, higher figure for free delivery inland; ³Initial contract settlement

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). 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. Methanol T1 will no longer be quoted, as it now represents negligible spot business. 

Spot prices in this issue are based on information available on 22 October 2003. 

Dollar prices are based on rates of exchange on 21 October 2003. 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=€0.856; $1=£0.596; €1=£0.697.

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