Naphtha prices begin to slide

04 April 2005 00:01  [Source: ICB]

Naphtha numbers have been hit by a supply surplus. However, most markets have been quiet, the BP explosion in Texas bringing a little uncertainty to an otherwise stable mixed xylene market

Naphtha prices dipped to $475-485/tonne cif NWE, as supply in Europe continues to outstrip demand. Material is plentiful, despite European crackers running well. The downslide in crude oil prices has also contributed to lower naphtha prices.

Ethylene prices are unchanged at $900-950/tonne cif NWE. Players note that prices are extremely notional, with no confirmed deals reported for weeks. There is talk of north African material being available at competitive prices.

Although initial quarter two (Q2) European contracts have been agreed at €750/tonne FD, an increase of €10/tonne on Q1, non-integrated purchasers have been particularly resistant to the initial settlement (see page 10).

Propylene spot numbers continue to be quoted at €740-750/tonne cif NWE and prices remain nominal in what is described as a quiet market. European prices are not attractive enough to bring deepsea molecules into the region. While few players have publicly followed the initial Q2 European contract figure of €705/tonne, it seems unlikely that a new contract price will emerge.

Butadiene remains in the range of $950-1000/tonne fob NWE. Players report that availability of spot material has tightened further. Firmer Asian values continue to support European prices. Initial European Q2 contracts have been agreed at €702/tonne, up €64/tonne on Q1.

Benzene spot business is muted, with deals early last week at $1175-1180/tonne, giving way to slightly lower numbers mid-week, at around $1165-1170/tonne. April contracts are still under discussion, but it looks like a hike of around €70/tonne on March’s €836/tonne is on the cards given recent high spot levels, although the number might come in slightly under €900/tonne. Supply is comfortable for April, although a little tighter than March due to shutdowns.

Toluene was quiet last week, with no deals reported. Numbers remain the same as the previous week at $660-680/tonne. Buyer ideas have slipped a little to $650/tonne but there have been no takers. The market is fairly balanced, with material heading to Asia helping maintain this position.

The mixed xylene market is fairly stable with prices unchanged from last week at $680-700/tonne fob NWE. The BP explosion in Texas City, US, has brought some uncertainty into the market, with producers taking a ‘wait and see’ stance. Sellers add that there does not appear to be a huge appetite for product at the moment, particularly from Asia.

Paraxylene numbers climbed to $995/tonne fob NWE earlier in the week before easing to $965-985/tonne levels. Deals have been heard at $985/tonne and $987/tonne for April and May respectively. Some producers say they are disappointed with a rollover for April contracts at €750/tonne, particularly with spot prices still high and the euro weakening.

Orthoxylene producers are soon to start contract negotiations but opinion is divided about the outcome. Most sellers, however, predict any change will be minimal. Spot business is still non-existent.

Styrene markets have been quiet, but with price ideas softening from the previous week to nearer $1235-1240/tonne. Ideas for May material are $1220-1230/tonne from sellers and $1190-1200/tonne from buyers. However, a lack of deals make these notional. Integrated producers are said to be cutting back on styrene to sell benzene.

There were no methanol deals reported by mid-week, with prices ideas at €215-218/tonne, but with some rumours of €212/tonne heard bid. The spot market is expected to remain quiet into next week, with people away at NPRA.

MTBE softened a little over the past week and are reported at $552-560/tonne. The market is quiet and few deals have been heard. The factor to gasoline is around 1.10.

Ammonia prices firmed again to around $230/tonne fob Yuzhnyy on the back of strong US buying. But bad weather has delayed shipping in and out of the Black Sea and May appears to be fully booked. Any material out of Ventspils has been snapped up.

BULK CHEMICAL PRICES

	European spot €/tonne	$/tonne	Change on last issue	European contract €/tonne	$/tonne	US contract $/tonne
Naphtha	na	475-485 (cif)	? 17.5	na	na	na
Ethylene	na	900-950 (cif) (nom)	? nc	750 (Q2)+	968	915 (Feb)
Propylene¹	740-750 (cif) (nom)	na	? nc	705 (Q2)+	929	981 (Mar)
Butadiene	na	950-1000(fob) (nom)	? nc	702 (Q2)+	906	904 (Mar)
Benzene	na	1165-1170 (fob)	? 2.5	836 (Mar)	1100	1127 (Mar)
Toluene*	na	660-680 (fob)	? nc	na	na	na
Xylenes	na	680-700 (fob) (nom)	? nc	na	na	639 (Mar)
Paraxylene	na	965-985 (fob)	? 5	750 (Apr)	968	981 (Mar)
Orthoxylene	na	800-810 (cif)(nom)	? 5	650 (Q1)	855	849 (Mar)
Styrene²	na	1200-1220 (fob)(nom)	? 80	1110-1135 (Mar)	1464-1497	1416-1527 (Feb)
Methanol	215-218 (fob)(nom)	na	? 2	230 (Q2)	306	317 (Mar)
MTBE	na	552-560 (fob)	? 3.5	na	na	na
Ammonia	na	225-230 (fob Yuz)	? 5	na	na	283(CFR)(2H Mar)?
NOTES *TDI grade; ¹Polymer grade; ²Lower figure for barge price, higher figure for free delivery inland price; + initial 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 30 March 2005. Dollar prices are based on rates of exchange on 29 March 2005. 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=€0.774; $1=£0.534; €1=£0.689.

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