Prices quieten down after steep rises

24 October 2005 00:01  [Source: ICB]

Naphtha slipped to $535-545/tonne cif NWE, falling steadily through the week. Higher refinery product and crude oil inventories in the US have contributed to lower European prices. An inability to shift naphtha into Asian markets has also added to the downward pressure on naphtha numbers.

Ethylene is relatively stable and notional at $1350-1370/tonne cif NWE. Business is no longer done at the top end of the range. Numbers off the ARG pipeline are at €1080-1150/tonne, but demand seems to have eased, with a deal reported at €1080/tonne. Shell has lifted the force majeure notice on ethylene at its cracker in Moerdijk, in the Netherlands. SabicEurope’s cracker at Geleen is ramping up after its outage, but had not lifted its force majeure as ECN went to press.

Propylene spot ideas have drifted down to €890-910/tonne cif NWE for polymer grade material. Product has been offered below €900/tonne, although no business has been reported at these lower levels. Improved availability, as cracker production difficulties in France and the Netherlands have receded, is a factor in the lower bid/offer prices.

Butadiene remains stable at $1050-1075/tonne fob NWE. Prices are notional. Despite improved availability of crude C4 feedstock, as European cracker output improves, spot material is still extremely hard to come by. Lower Asian values and reduced demand from Asia is also keeping a lid on prices.

Toluene levels were at $640-670/tonne. The Petrogal refinery in Oporto, Portugal, was set to restart and the force majeure lifted on all products – 170 000 tonne/year of toluene is produced at the refinery.

Demand for mixed xylenes is good and the past week has seen a few deals. Prices continue to hover around $880-910/tonne. US spot offers for October were heard at $3.40-3.45/gal fob USG, with November offers lower at $3.30-3.35/gal.

European paraxylene (PX) producers report a wide price range between October and November. Offers were at $1150/tonne for October early in the week but dropped to mid-$1000s/tonne levels. November numbers are around $980-1030/tonne.

Availability remains extremely snug, although there are still attempts to move product to the US but sourcing ships is difficult. The force majeure on paraxylene at Petrogal’s refinery is soon due to end, having been down since 13 October.

October US contracts have rolled over from September’s levels at 60 cent/lb.

More than a fortnight after the initial €730/tonne Q4 settlement, a second orthoxylene (OX) contract has been agreed €40/tonne higher, which sellers agree is far more reasonable given feedstock prices. OX spot continued to rise to $940-950/tonne, with trade done at these levels.

Downstream, phthalic anhydride producer Kemiplas has shut its plants in Slovenia and Hungary due to financial difficulties and a lack of raw materials.

Methanol prices are at €210-214/tonne but activity is very muted as volumes are taken under contract. A deal was completed at the end of the previous week at €216/tonne.

MTBE drifted downwards throughout the week, following the dip in gasoline. Prices are quoted at $685-715/tonne. Demand is generally lacking although one seller notes that there is a lot of consumption in the Mediterranean despite the recent switch to winter grade. The factor is 1.25-1.30.

Ammonia levels eased to $295-300/tonne fob Yuzhnyy, with a deal rumoured at $295/tonne. Although US demand remains strong, a lack of large vessels is preventing material moving out of Yuzhnyy and there is no opportunity for prompt buying. Activity has therefore dropped off, depressing prices. Freight rates are facing upward pressure.

Styrene and benzene markets flatten

Styrene fell to $1015-1040/tonne for November. A $1000/tonne deal for November was rumoured, with October barely talked. Earlier deals were at $1060/tonne for October and $1040/tonne for November. The contractual caveat was still in force for styrene at Moerdijk in the Netherlands after force majeure was declared by Shell on 10 October. The restart of BASF’s Antwerp styrene unit has been delayed and Total is also running at slow rates.?Consequently benzene is long. Prices fell from $740-750/tonne earlier in the week to $690-720/tonne for October, November and December. The Gonfreville refinery strike in France was limiting reformate feedstock for benzene production.

BULK CHEMICAL PRICES

	European spot €/tonne	$/tonne	Change on last issue	European contract €/tonne	European contract $/tonne	US contract $/tonne
Naphtha	na	535-545 cif	- 25	na	na	na
Ethylene	na	1350-1370 cif nom	nc	825 Q4	992	1003 Sep
Propylene¹	890-910 cif nom	na	- 15	810 Q4	986	904 Sep
Butadiene	na	1050-1075 fob nom	nc	815 Q4	980	1124 Oct
Benzene	na	690-720 fob	- 60	731 Oct	870	927 Oct
Toluene*	na	640-670 fob nom	- 50	na	na	na
Xylenes	na	880-910 fob	- 5	na	na	1024 Oct
Paraxylene	na	1030-1070 fob	- 80	905 Oct	1089	1322 Sep
Orthoxylene	na	940-950 cif	+ 45	770 Q4	919	1058-1102 Oct
Styrene²	na	1015-1040 fob	- 122.5	1045/1065Oct	1245/1268	1466-1614 Sep
Methanol	210-214 fob	na	- 2	220 Q4	262	300 Sep
MTBE	na	685-715	- 100	na	na	na
Ammonia	na	295-300 fobYuz	- 10	na	na	360 CFR 1H Oct

*TDI grade; ¹Polymer grade; ²Lower figure for fd barge price, higher figure for fd truck price; +initial settlement

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