Markets are muted and slow

05 December 2005 00:01  [Source: ICB]

Naphtha prices slipped to $452-460/tonne cif NWE, pulled lower by crude, which fell on the back of higher than expected US stocks. Naphtha traders hoped to open their arbitrage to Asia, but this proved difficult as shortages were met by local suppliers.

Ethylene spot markets are very quiet with no new deepsea spot business reported. Players say most activity is conducted under contract. Lower demand from key derivatives has also taken the edge off the market. Pipeline business is recorded at €750/tonne. The only reported European monthly contract price has been settled at €775/tonne for December, down €105/tonne on November.

Propylene drifted down to €805-815/tonne cif NWE for polymer grade material. A couple of parcels have been sold at €810/tonne cif NWE for December delivery. Improved availability coupled with reduced consumption has also contributed to lower prices.

Butadiene spot prices are unchanged at $800-850/tonne fob NWE. However, players stress that prices remain extremely notional. Butadiene markets have been disrupted by the low levels on the Rhine, Germany and major consumers are unable to receive sufficient quantities of butadiene feedstock. Certain suppliers are having difficulties in disposing of product, which is putting pressure on their storage facilities.

The toluene market was muted, with producers preferring to keep material in gasoline due to better blending prices. Numbers were heard around $530-540/tonne.

Mixed xylene spot is unchanged from last week’s $690-700/tonne range in an extremely quiet market. One producer however, suggests numbers could be as low as $650/tonne. A trader reports a deal at $700/tonne, but this could not be confirmed. US activity has been muted with the December bid/offer range assessed at $1.95-2/gal FOB USG.

Paraxylene (PX) spot prices dipped from $810-825/tonne FOB levels at the start of the week to a range of $780-800/tonne on Thursday. The market remains quiet and no business has been reported. Gadiv’s Haifa, Israel, plant has shut down for its planned maintenance turnaround.

There is no news on the European PX contract for December, with Asia yet to settle. The ‘unrealistic’ nominations previously announced have been superseded by suggestions of a low to mid $800s/tonne contract, which producers say is far more reasonable.

The orthoxylene (OX) market has been comatose, although there is a firm bid/offer mentioned at $770-775/tonne. In the US, December OX contract nominations are heard in a 38-42 cent/lb FOB range – representing a rollover on November levels, to an increase of 4 cent/lb.

Styrene spot prices fluctuated from the low $800s/tonne early in the week to the mid-high $800s/tonne, settling at $850-870/tonne as ECN went to press. Although price-wise the arb to the US was open, traders were unwilling to export until US December destocking is over. The first styrene barge December contract settled last Thursday at €832/tonne, down €93/tonne. An initial FCA contract was also settled, before both the benzene and the styrene barge contract, at €825/tonne FCA Rotterdam, down €100/tonne from November.

Methanol prices were seen in a range of €215-230/tonne, with a deal rumoured at the top end of the range and a confirmed deal at the bottom. Offers had hit €250/tonne earlier in the week. Methanex’s Asian Posted Contract Price (APCP) for December was raised by $15/tonne to $295/tonne CFR.

MTBE activity was subdued although a number of deals have been done at $520/tonne. Prices are at $515-525/tonne, with the factor to gasoline at 1.04-1.07.

Ammonia tightens and benzene settles

Ammonia markets are set to tighten, with Terra Nitrogen production completely down in Billingham, UK (see page 9.) One of Terra’s 200 000 tonne/year Severnside, UK, plants is also down and both units will be out for maintenance for 3-4 weeks in mid-January. A plant at Le Havre, France will also close from mid-December until the end of March as a result of high gas prices. Ammonia numbers are static, but players expect some upward pressure. There are still some delays out of Yuzhnyy, with vessels now also having to contend with fog.?Benzene deals were thin following the settlement of the contract at €490-492/tonne (see page 12). Spot sank to $580/tonne and later hovered around $600/tonne. January spot is $15/tonne higher.

BULK CHEMICAL PRICES

	European spot €/tonne	$/tonne	Change on last issue	European contract €/tonne	European contract $/tonne	US contract $/tonne
Naphtha	na	452-460 cif	- 11.5	na	na	na
Ethylene	na	920-960 cif nom	- 60	825 Q4	992	1201Oct
Propylene¹	805-815 cif	na	- 20	810 Q4	986	1125/1146 Nov+
Butadiene	na	800-850 fob nom	nc	815 Q4	980	1125 Nov
Benzene	na	590-610 fob	- 47.5	490-492 Dec	578-580	707 Nov
Toluene*	na	530-540 fob nom	-15	na	na	na
Xylenes	na	690-700 fob nom	nc	na	na	621 Nov
Paraxylene	na	780-800 fob nom	- 50	865 Nov	1020	1135 Nov
Orthoxylene	na	770-790 cif nom	-10	770 Q4	919	838 Nov
Styrene²	na	850-870 fob	- 30	832/857 Dec	978/1008	1630-1780 Oct
Methanol	215-230 fob	na	- 5	220 Q4	262	313-320 Nov
MTBE	na	515-525	- 12.5	na	na	na
Ammonia	na	290-300 fobYuz nom	nc	na	na	399 CFR 2H Nov

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

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