Business slow in illiquid markets

08 August 2005 00:01  [Source: ICB]

Naphtha prices had settled at $480-495/tonne cif NWE in mid-week, after peaking above $500/tonne cif NWE at the beginning of the week. They followed crude oil prices up, which spiked after the death of King Fahd of Saudi Arabia (see page 13). However, naphtha fundamentals are not strong; supply continues to outstrip demand.

Ethylene spot prices have steadied at $790-810/tonne cif NWE in a relatively quiet market with no new deals reported. Players talk of higher prices in the Mediterranean ranging between $800 and $850/tonne, with no business heard. Prices off the ARG pipeline are now in a broad range of €610-650/tonne, with producers unwilling to part with material unless offered the top-end prices.

Butadiene spot prices are stable at $910-930/tonne fob NWE. Prices remain notional, with no spot business reported in the last week. Players believe demand from certain sectors has eased off, which could free up spot product in the coming weeks. US contract prices have reached a record 46 cent/lb for August, an increase of 1 cent/lb on July (see page 29).

The benzene market is described as ‘illiquid’, which some blame on the summer lull. Deals were reported for August at $835/tonne and for September at $825/tonne, with the bid/offer for September at $805-825/tonne. Aromatics Thailand Co (ATC) shut its plant for three days after a fire last Wednesday morning. The complex can produce 470 000 tonne/year of benzene, 495 000 tonne/year of paraxylene (PX), 140,000 tonne/year of toluene and 80,000 tonne/year of orthoxylene (OX).

Toluene prices are pegged at $640-650/tonne after a deal at $647/tonne. The August contract completed at $640/tonne. Markets are balanced on supply issues despite slow demand. Operating rates were still reduced at Total’s Gonfreville, France, plant after production problems.

The mixed xylenes market has been quiet, although business has been reported at $685/tonne fob NWE. Distributors are trying to maintain this level but offers have crept above $700/tonne, with the range at $690-710/tonne. Earlier problems at Total’s Vlissingen refinery in the Netherlands have tightened the market a little.

A few paraxylene deals have been completed in an otherwise subdued market. Producers are quoting $775-795/tonne fob NWE. PX stocks were long in July but the market has since returned to balance.

As ECN went to press, Reliance was expected to restart its Patalganga plants in India after a six-day outage. Heavy rain led to severe flooding in the region, forcing the company to shut down its units at the site. Normal production of PX is soon to resume at ATC’s plant after a fire damaged pipelines.

There has again been no stirring in the orthoxylene market and prices remain entirely notional at $690-700/tonne.

Styrene bids and offers for September are reported at $1040-1060/tonne, with little interest in August business. A deal was done earlier in the week at $1070/tonne. Initial styrene contracts have settled, along with benzene (see page 12).

Methanol numbers are hovering at €195-197/tonne, with the majority of business completed under contract. Around 4000 tonne of methanol production was lost from one of Methanor’s 450 000 tonne/year methanol plants at Delfzijl after a leak in a reboiler. The unit is now running again.

Ammonia prices have firmed this week to $215-220/tonne, with several deals completed within this range and talk that prices are about to head higher. Strong US demand is supporting prices, along with ongoing and upcoming Algerian shutdowns. August material out of Yuzhnyy is sold out.

Propylene demand healthy as numbers firm

Propylene numbers for spot polymer grade product have firmed to €620-640/tonne cif NWE. Sellers report reasonable buying interest at about third quarter contract levels. Healthy demand from the majority of key derivative sections continues to support spot prices. Traders note that if buyers want to secure deepsea material, then spot prices will have to rise further.

MTBE values have moved higher on the back of rising energy costs. Buying activity, however, has been muted and prices are quoted in a wide $920-990 range. Business has recently been done at $955 and $920/tonne fob ARA. Demand appears to have picked up as the factor to gasoline has dropped. The factor is heard at 1.55-1.57 for August, with September discussions down at 1.46-1.49.

BULK CHEMICAL PRICES

	European spot		Change on	European contract		US contract
	€/tonne	$/tonne	last issue	€/tonne	$/tonne	$/tonne
Naphtha	na	480-495 cif	+ 20	na	na	na
Ethylene	na	790-810 cif nom	nc	640 Q3	776	881 June
Propylene¹	620-640 cif nom	na	+ 20	640 Q3	776	749 July
Butadiene	na	910-930 fob nom	nc	702 Q2	906	1014 Aug
Benzene	na	805-820 fob	+10	699 Aug	810	822 Aug
Toluene*	na	640-650 fob	nc	na	na	na
Xylenes	na	690-710 fob	+ 20	na	na	661 Aug
Paraxylene	na	775-795 fob	+ 5	720 Aug+	869	865 July
Orthoxylene	na	690-700 cif nom	nc	610 Q3	728	793 Aug
Styrene²	na	1040-1060 fob	- 55	940 Aug+	1148	1389-1477 Jul
Methanol	195-197 fob nom	na	- 0.5	220 Q3	266	317 July
MTBE	na	920-990	+ 120	na	na	na
Ammonia	na	215-220 fobYuz	+ 5	na	na	265 CFR 2H July
*TDI grade; ¹Polymer grade; ²Lower figure for fd barge price, higher figure for fd truck price; +initial settlement

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 4 August 2005. Dollar prices are based on rates of exchange on 1 August 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=€0.819; $1=£0.565; €1=£0.690.

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