Market Trends: Toluene slides in lacklustre market

08 March 2004 00:01  [Source: ICB]

Toluene prices spiralled down, but paraxylene edged up following its dip the previous week, with spot deals done at $684/tonne

BULK CHEMICAL PRICES

	European spot €/tonne	$/tonne	Change on last week	European contract €/tonne	$/tonne	US contract $/tonne
Naphtha	na	335-337 (cif)	+16.5	na	na	na
Ethylene	na	740-760 (cif)(nom)	nc	580 (Q1)	742	667 (Dec)
Propylene¹	565-585 (cif)(nom)	na	nc	475 (Q1)	608	557 (Jan)
Butadiene	na	500-520 (fob) (nom)	nc	520 (Q1)	640	640 (Feb)
Benzene	na	585-590 (fob)	+33	416 (Q1)/450 (Mar)	516/554	592 (Feb)
Toluene*	na	460-470 (fob) (nom)	-50	333 (Q4)	392	na
Xylenes	na	590-595 (fob) (nom)	+5	na	na	473-479 (Jan)
Paraxylene	na	683-690 (fob)	+26.5	590 (March)	726	634 (Jan)
Orthoxylene	na	660-670 (cif)	-17.5	445 (Q1)	558	562 (Jan)
Styrene²	na	770-780 (fob)	+8	716.5-741.5 (Q1)	915-947	1055-1100(Jan)
Methanol	178-180 (fob)	na	+2	190 (Q1)	235	255 (Jan)
MTBE	na	372-382 (fob)	+25.5	na	na	na
Ammonia	na	225-235(CFR)	-5	na	na	320 (CFR) (1H Feb)
NOTES *TDI grade; ¹Indicates polymer grade; ²Lower figure for barge price, higher figure for free delivery inland; ³Initial contract settlement

Naphtha prices were quoted at $335-337/tonne cif NWE by midweek, after touching $350/tonne cif NWE earlier in the week. The recent strength of the arbitrage to Asia has fuelled the tightness in the market.

Ethylene numbers remain unchanged at $740-760/tonne cif NWE. Although production problems are less of an issue, material is still not freely available. However, prices off the ARG pipeline have slipped to €650-675/tonne. Deep sea parcels are expected in Europe in the coming days.

Propylene prices are in the range of €565-585/tonne cif NWE. Derivative players say they are reluctant to accept current high spot prices. Material is said more readily available now that crackers and propane dehydrogenation units are running better. Production outages at derivative units have also improved availability.

Butadiene prices are notionally quoted at $500-520/tonne fob NWE. Spot molecules are still difficult to source, hindering spot activity.

Benzene numbers edged back up with spot business beginning the week at $576-588/tonne fob NWE. By midweek, prices had reached $585-590/tonne. March contracts have been agreed at €450/tonne fob NWE, €15/tonne down on February due to general weakness in the styrenics chain.

Toluene is still in the doldrums. Notional prices slumped to $460-$470/tonne fob NWE, from last week’s $505-515/tonne fob NWE, but no actual business was reported.

The lower mixed xylene prices on the market have disappeared, with prices now pegged at $590-595/tonne fob, although no deals were reported. European values are strong despite the fall in Asian and US numbers, with tight availability keeping the market firm. Xylene production at Antwerp, Belgium, went down for maintenance last week and is scheduled to last for around a month.

Paraxylene could tighten as well as a result of the xylene outage, although many believe the market is balanced at present. A spot deal for April was completed at $684/tonne, with the market assessed at $683-690/tonne fob. Asian prices picked up again following the dip the previous week.

Orthoxylene numbers fell after a deal was reported at $660/tonne fob. Buyers had been unwilling to pay the higher prices of $680-685/tonne for several weeks and business has been sparse. Producers mentioned that the fall was unusual given the current tight market situation and overall prices are seen at $660-670/tonne.

Styrene asking prices began the week as low as $760/tonne, depressed by stories from Asia where styrene stocks have soared and are now said to exceed tank storage capacity. However, the European spot market is short of material, the result of a 20 000 tonne purchase by a US petrochemicals major the previous week. The scarcity rapidly boosted offers to $775-780/tonne, though there were no takers at that level.

Methanol is balanced to tight as a series of scheduled turnarounds began last week with the one-month Veba shutdown. Offers are said to be gradually firming, helped by the dollar’s slight recovery, though deals are few and far between. Notional prices in Europe are around €178/tonne fob NWE, with one reported at €180/tonne. Asian prices are much higher at $280-290/tonne cif India, though China is said to be exporting rather than importing material at the moment.

Absolute numbers on the MTBE market have firmed to $372-382/tonne fob as higher gasoline numbers supported prices. Deals took place at both the top and the bottom of the range, but the actual factor to gasoline remained low at 1.05-1.07. Suppliers said that demand seems to be relatively healthy, but the market is balanced due to plentiful supply. During February, exports to the US were relatively strong.

Ammonia dropped to $194-197/tonne fob Yuzhnyy, though little business was done as buyers waited for the slide to continue. Traders believe further decline is inevitable, as US buyers have also become hesitant and Venezuelan material is being priced below Yuznhyy in an attempt to attack the US 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). 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 3 March 2004. Dollar prices are based on rates of exchange on 2 March 2004. 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=€0.813; $1=£0.541; €1=£0.665.

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