MARKET TRENDS: Ethylene continues steady climb

15 January 2006 00:00  [Source: ICB]

Ethylene prices continue to rise strongly following a confirmed pipeline deal. Propylene soars in Europe and Asia but increases may be short-lived 

European naphtha cargoes were talked higher at around $544-552/tonne cif NWE. February swaps leapt to $547-548/tonne cif NWE on a stronger energy complex.

Naphtha prices in Asia for the first-half March open-spec delivery contract rose by some $2/tonne to $556-557/tonne CFR Japan, influenced by firmer crude futures. An outright deal for a 25 000 tonne open-spec cargo between two Japanese traders was concluded at $558/tonne CFR Japan for second-half February.

Ethylene prices in Europe have climbed to $990-1000/tonne on the back of a confirmed pipeline deal at €820 and a deal heard at €825/tonne. A deal at the end of the previous week was completed at €805/tonne cif NWE. Sabic’s Beek cracker in the Netherlands was close to running at full capacity after an unplanned outage at the end of the previous week.

Korea’s Yeochun NCC (YNCC) shut its 500 000 tonne/year ethylene plant due to a leakage and then failed to restart when planned. The cracker also produces around 250 000 tonne/year of propylene. The next date for start-up was Sunday, 15 January. Ethylene prices are at $1070-1090/tonne.

European butadiene spot markets are quiet and notional numbers are quoted at $830-850/tonne. Buyers are said to be asking for extra volumes under contract. The contract price of €770/tonne has been accepted by nearly all players on the market.

Asian spot offers for butadiene rose by about $50/tonne to $980-1000/tonne CFR NE Asia amid bullish market sentiment. Buying indications edged up by about $10-20/tonne to $930-950/tonne CFR NE Asia on tight supply, given the three-month delay of a new 140 000 tonne/year butadiene extraction unit in China to mid-February.

Trades were limited this week, with sellers adopting a wait-and-see stance and withholding firm offers in anticipation of higher numbers. Enquiries for spot butadiene product were heard, with price discussion levels at $950-980/tonne CFR NE Asia.

Benzene spot business in Europe has been quiet, but prices moved up slightly to $750-760/tonne fob NWE on the back of energy prices and good derivative demand. A deal was heard at $752/tonne, as ideas drifted down very slightly at the end of the week. February material is $10/tonne higher. In Asia, prices are more or less steady at $720-740/tonne fob Korea, with trades reported at $720 and 735/tonne.

Toluene in Europe has also strengthened with deals reported between $625 and $635/tonne, and the range quoted at $640-650/tonne later in the week. Demand is higher and activity is recovering after a period of inactivity. In Asia, prices have also moved up to $720-725/tonne fob Korea, with deals reported at $710, $720 and $730/tonne in a relatively active market.

Gains in energy values over the year-end holiday have led to a rise in European spot prices for mixed xylenes. Prices began last week in the $740-750/tonne fob Rotterdam range and continued to gain, reaching $750-770/tonne on Thursday.

In Asia, a 2000 tonne solvent xylene selling tender was awarded by a Korean producer at $698/tonne fob Korea, 1H February loading. The bid offer range is $690-700/tonne fob Korea.

The first European January paraxylene contract has been settled at €785/tonne free delivered (FD) Northwest Europe (NWE) – up €37/tonne on December. Spot prices increased by €30/tonne to €960-980/tonne fob Rotterdam. A deal was reported at $970/tonne fob Rotterdam mid-week.

Paraxylene deals were done in Asia at $1000-1010/tonne CFR Taiwan/China and the bid/offer range moved up to $1010-1020/tonne CFR Taiwan. Offers were heard at $1050/tonne CFR Taiwan for any February lifting. Off-window bids were at $995/tonne CFR Taiwan, demonstrating some traders’ desire to take long positions. Bids on an fob Korea front were at $985-990/tonne.

There were no reported orthoxylene deals in Europe and prices remain nominally at €770-790/tonne

In Asia, a trader was heard to have bought a regional orthoxylene cargo around $810/tonne fob NE Asia, for February loading. Another deal was heard at $840/tonne CFR NE Asia. Prices settled around $35/tonne up in the $830-840/tonne CFR NE Asia range.

Styrene spot business in Europe has moved up to $1000-1010/tonne, on the back of the BASF outage in Germany and firmer benzene. Supply and demand, however, still look balanced. February material is $10-15/tonne higher.

In Asia, numbers are also slightly higher at $1055-1070/tonne fob Korea, with bids heard as high as $1080/tonne mid-week but softening later.

Methanol has firmed slightly in Europe, on sentiments of a tighter market, with a deal reported at €253/tonne but not confirmed. The range is put at €245-255/tonne but there are not many buyers and most material is still moving under contract.

Asian methanol numbers are steady at $253-258/tonne CFR China, but with higher numbers reported for Korea ($285/tonne) and west coast India ($300/tonne).Chinese numbers look to be softening slightly.

European MTBE prices firmed over the week to $615-645/tonne, following US gasoline prices. A deal was reported midweek at $605/tonne fob. The factor to gasoline has fallen slightly to around 1.07-1.10.

Asian MTBE prices were up $5/tonne to $515-525/tonne fob Singapore in line with high gasoline values. Sellers maintained offers at $530-540/tonne fob Singapore ?citing limited spot availability and firm energy values.

Ammonia prices ex-Yuzhnyy are again in the $250-255/tonne range, despite firmer sentiment last week. US demand is said to have eased, and several European plants are still down.

In Asia, markets were quiet due to public holidays. Japanese producers reported no business and one producer said suppliers were sold out for January. A Taiwanese buyer bought a 20 000 tonne cargo from Indonesia, but a source would not reveal the price.

Propylene surges ahead of Lunar New Year

European propylene climbed with ethylene, but may have peaked, with a deal done in the quoted range for chemical grade material. There was talk of a cargo heading to Europe from the US, although others said prices need to be higher to open the arb. Total was due to restart its propylene FCC unit last weekend at Leuna, Germany.

Asian propylene prices jumped to $1040-1050/tonne CFR Taiwan as buyers scrambled for February cargoes ahead of the Lunar New Year holidays due to start at the end of the month. Korea’s YNCC was due to restart its 250 000 tonne/year propylene facility over the weekend but the start-up has been delayed for another week. The Taiwanese facility was started up successfully.

Contract bulk chemical prices

	Europe		US
	€/tonne	$/tonne	$/tonne
Ethylene	785 Q1	949	1245 Dec
Propylene1	785 Q1	949	915 Jan
Butadiene	770 Q1	931	1080 Jan+
Benzene	603 Jan	718	736 Jan
Paraxylene	785 Jan	954	992 Jan
Orthoxylene	700 Jan	919	804 Dec
Styrene3	904-915 Jan	1093-1106	1702-1852 Nov
Methanol	268 Jan	319	337-340 Jan
Ammonia	-	-	388 CFR 1H Jan

Prices contained in this magazine are gathered by various ICIS sources through consultation with producers, consumers and traders across Europe and Asia. They are intended as a guide to price levels of recent business and reflect medium to large tonnage sales.

Abbreviations used are fob (free-on-board), cif (cost, insurance and freight), FCA (free carrier), CFR (cost and freight). 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, + initial settlement.
1= polymer grade, 2 = solvent grade, 3 = barge price.

Spot prices in this issue are based on information available on 12 January 2006. Dollar prices are based on rates of exchange on 11 January 2006. The dollar equivalent range is based on exchange rates prevalent at the time of contract closure. $1=€0.823; $1=£0.565; €1=£0.686

In-depth pricing information and reports on these and other chemical products is provided on a daily and weekly basis by ICIS-LOR, ICIS Chemical Business’ sister service within ICIS. For more information:

www.icislor.com or contact csc@icislor.com. Alternatively, telephone our regional sales offices on +44 20 8562 3335 (London, UK), +65 6588 3955 (Singapore) or +1 888 525 3255 (Houston, Texas, US)

 

SPOT BULK CHEMICALS Prices, $/Tonne

Asia

Naphtha +6.5	Ethylene +85	Propylene1 +97.5	Butadiene +60	Benzene nc	Toluene2 +12.5
556-557 CFR Japan	1070-1090 CFR NEA nom	1040-1050 CFR NE Asia	950-980 CFR NEA nom	720-740 fob Korea	720-725 fob Korea

 

Xylenes +10	PX +30	OX +35	Styrene +22.5	Methanol nc
690-700 fob Korea	1000-1020 CFR Taiwan	830-840 CFR NE Asia	1055-1070 fob Korea	253-258 CFR China

 

MTBE +5	Ammonia -15
515-525 fob Singapore	360-370 CFR NE Asia

 

Europe

Naphtha +5.5	Ethylene +52.5	Propylene1 +27.5	Butadiene +5	Benzene +25	Toluene2 +25
544-552 cif	990-1000 cif nom	€815-820 cif	830-850 fob nom	750-760 fob	640-650 fob

 

Xylenes +65	PX +30	OX nc	Styrene +20	Methanol +5	MTBE +15
750-770 fob nom	960-980 fob	770-790 cif nom	1000-1010 fob	€245-255 fob nom	615-645 fob

 

Ammonia -12.5

250-255 fob Yuz nom

 

 

 

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