Market Trends & Data - Aromatics climb on high energy

06 February 2006 00:00  [Source: ICB]

Benzene, toluene and mixed xylenes firm in response to higher energy costs. Many other spot markets remain quiet with orthoxylene looking lacklustre

European naphtha rose slightly at the start of the week, before softening to $548-552/tonne cif NWE. The drift was attributed to uncertain crude futures deterring buying interest. In Asia, naphtha prices were $5/tonne weaker mid-week, at $553-555/tonne CFR Japan for 1H April delivery. Prices softened amid weakness in crude and refined products following news of builds in US stocks. Two trades were reported for 2H March delivery for 25 000 tonne cargoes at $554/tonne and $555/tonne CFR Japan.

Ethylene spot is quiet, with no deals heard, but with ideas firming in a balanced-to-tight market. One seller was looking to achieve €900/tonne for pipeline deals, but another put prices at around €840/tonne. Spot was nominally around the mid-$1050s/tonne, but ideas were up to $1100/tonne. The February monthly price was agreed at €855/tonne FD NWE, up €85/tonne.

Asian prices slipped to $1075-1145/tonne CFR NE Asia, after a few weeks of steady increments. A small ethylene cargo at $1070-1080/tonne was reported sold into northeast Asia for end-February/early March delivery. An Indonesian end-user accepted a part cargo of 1500 tonne ethylene offered at $1100/tonne CFR for February arrival – down from a previous deal at $1120/tonne CFR by a trader.

Propylene spot business in Europe is also quiet, but supply is a little easier than ethylene due to derivative outages. There is a build-up of material in ARA due to low Rhine water levels. Prices are steady, but with a softening evident at the lower end of the range, to €820-840/tonne. A deal was done at €840/tonne for March delivery. In Asia, prices softened to $900/tonne CFR Korea, following a deal at $950/tonne CFR Korea for end-February delivery. Despite buyers’ attempts to push prices lower, southeast Asian propylene prices held steady around $1000/tonne CFR as sellers tried to withhold offers until market conditions improved.

European butadiene is balanced to slightly long but business is quiet. Deals are reported around $830/tonne levels. The position is expected to tighten as US turnarounds, including the large Sabina unit, begin. Asian butadiene is $1020-1040/tonne CFR NE Asia. Although quiet, traders are bullish due to cracker shutdowns in South Korea and Taiwan in March and April.

European toluene prices moved up to $680-695/tonne fob Rotterdam, thanks to rising energy costs. The market remains subdued although business has been heard at $685 and $695/tonne. Asian toluene is at $745-755/tonne fob Korea following firmer sentiment in the overall aromatics sector. Several deals are reported amid brisk trading: an inter-trade for any-March lifting was done at $750/tonne, two deals at $755/tonne and a 1H March fixture also at $755/tonne.

Firm US energy values kept the upward momentum in mixed xylenes pricing. Spot levels were pinned in the high $700s/tonne fob NWE. One producer was said to be in the market for product, but otherwise high prices were discouraging distributor interest. Offer prices in Asia were quoted at $820-830/tonne fob Korea for late February loading, but buyers were closer to $800/tonne.

February paraxylene (PX) contracts settled at €830/tonne FD, up €45/tonne on January. The spot market saw little action, and bid/offer levels drifted notionally down. Players assessed the market at $920-930/tonne fob NWE. One trader said that if numbers fell much lower interest in shipping PX to Asia or the US could be rekindled.

Asian PX also looked weaker, and the Chinese New Year left business subdued. Notional spot ideas centred around $1000-1010/tonne CFR Taiwan for March delivery. Bids fob Korea were $980-990/tonne.

Orthoxylene (OX) spot deals were rumoured in the mid-$700s/tonne fob NWE. Buying interest in Europe was very low, and players hoped to see some renewed interest from Asian buyers. Spot prices were unchanged at $780-800/tonne cif NWE.

Asian OX was steady at $840-850/tonne CFR NE Asia and SE Asia. The holiday season took many players away from the marketplace, but some upward sentiment is expected to come through in February.

Styrene spot firmed to $1060-1075/tonne fob Rotterdam for February. Sellers say there has been increased buying interest, with several deals done. The barge contract was agreed at €955-965/tonne FD NWE for February, up on strong benzene and styrene spot numbers, as well as healthy demand from the polymers sector in Europe and Asia.

Asian markets were quiet, although business was concluded for 2000 tonne at $1100/tonne fob Korea, 2H February lifting.

With a major methanol producer still looking to secure spot product to cover its short supply position, there was a fair amount of activity this week. The range was €283-290/tonne fob NWE, with deals at €283, €284 and €285/tonne fob Rotterdam, for February lifting. One trader was offering product at €290-295/tonne fob Rotterdam. Spot methanol is tight.

Limited supply boosted Asian methanol prices, which are $285-295/tonne CFR Korea, and $275-280/tonne CFR Taiwan. China is stable at $250-256/tonne CFR. The February Asian posted contract price was announced by a major producer at $330/tonne CFR, up $10/tonne on January.

MTBE prices dwindled to $625-650/tonne as gasoline came off. Sellers reported a deal at $647/tonne at press time, although trade was done higher earlier in the week. The factor is at 1.13-1.15 levels. With China still closed for the New Year holidays, the MTBE market is quiet with no deals. Prices are stable at $525-535/tonne fob Singapore.

The ammonia market remains extremely subdued with prices notionally unchanged at $260-265/tonne Yuzhnyy. One seller says moving tonnage to Yuzhnyy is proving difficult. There are still delays in the Bosphorus.

FSU suppliers report over 90 000 tonne of ammonia inquiries from Asia for 2H February shipment/March arrival. With the Middle East barely able to cover India and supply tight from southeast Asia, suppliers are quoting prices of $395-400/tonne CFR for February contract deliveries to Korea. In India, IFFCO is paying in the mid-$370s/tonne CFR Kandla, up $10/tonne on December.

BENZENE ROCKETS ON STRONG ENERGY VALUES

An active European spot market has seen benzene leap to $850-865/tonne for February, pushed up by healthy demand and rising energy costs. March product is priced at a slight premium. One seller says the arbitrage is open to the US and export cargoes are heading west. The first February benzene contract was agreed at €675/tonne fob NWE, up €72/tonne on January. Asian benzene prices rose to $805-820/tonne fob Korea. A deal was heard at $810/tonne fob Korea, for 1H March lifting, and $820/tonne loading any- March.

SPOT BULK CHEMICAL PRICES, $/TONNE

ASIA

Naphtha -11

Ethylene -30

Propylene1 -70

Butadiene -40

Benzene +52.5

Toluene2 +22.5

Xylenes +25

PX +10

OX nc

Styrene +35

Methanol +13

MTBE -35

Ammonia -5

553-555 CFR Japan

1075-1145 CFR NE Asia

900-950 CFR NE Asia nom

1020-1040 CFR NEA nom

800-820 fob Korea

745-755 fob Korea

800-830 fob Korea

1000-1010 CFR Taiwan

840-850 CFR NE Asia

1080-1100 fob Korea

250-256 CFR China

525-535 fob Singapore

375-395 CFR NE Asia

EUROPE

Naphtha nc

Ethylene +22.5

Propylene1 -10

Butadiene -42

Benzene +67.5

Toluene2 +32.5

Xylenes +22.5

PX -32.5

OX nc

Styrene +37.5

Methanol +11

MTBE +2.5

Ammonia nc

548-552 cif

1040-1080 cif nom

€820-840 cif

830-840 fob nom

850-865 fob

680-695 fob nom

780-795 fob nom

920-930 fob nom

780-800 cif

1060-1075 fob

€283-290 fob

625-650 fob

260-265 fob Yuz nom

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