Green markets trends and data: Markets subdued on shaky crude

05 February 2007 00:00  [Source: ICB]

Contracts drop in Europe for benzene, styrene and orthoxylene, while the bi-monthly ethylene contract rolls over. Spot deals are thin in Asia and Europe as feedstocks fluctuate

European naphtha hovered at $527-530/tonne, fluctuating throughout the week in line with crude oil. The arbitrage to Asia remains open. Asian prices were notionally steady, at $568-571/tonne CFR Japan. Supply is tight, with India's naphtha exports still scant.

European ethylene prices have eased to $1,190-1,230/tonne, with no deals heard. The bi-monthly ethylene contract has been settled at a rollover at €845/tonne. Repsol's cracker at Puertollano, Spain, restarted last week. Asian prices were notionally stable-to-soft at $1,300-1,330/tonne CFR southeast Asia, with a deal rumoured at $1,315/tonne. Buying sentiment remained weak because of negative margins in the key polyethylene (PE) derivative market.

European propylene prices are notionally pegged at €850-860/tonne in a quiet market. Asian propylene remained bearish, despite higher crude values, due to weak downstream polypropylene (PP) prices. Numbers were stable and notional, at $1,080-1,120/tonne CFR NE Asia.

European butadiene spot numbers were unchanged at $1,230-1,280/tonne, although the February monthly contract price fell €40/tonne to €900/tonne. The restart of Repsol's 30,000 tonnes/year unit in Puertollano, Spain, was delayed by more than a week, and was expected to restart last Saturday.

Asian spot continued to fall, amid rising inventories and shrinking demand. Bids tumbled by $40/tonne to $1,050/tonne CFR NE Asia, with offers at $1090/tonne for February shipments. Buyers held out for lower prices, given the current lull in trades in the run-up to the Chinese New Year.

Benzene spot prices hovered at $925-940/tonne last Thursday in Europe after the contract settled on Wednesday (see box, above). Midweek, Asian spot was pegged notionally at $910-920/tonne FOB Korea for March. Early-week gains of as much as $40/tonne promptly evaporated as crude fell.

Toluene in Europe was very quiet, with one deal at $720/tonne heard at the start of the week, and the latest range pegged at $725-755/tonne. Conoco Philips' plant at Immingham, UK, is in a 16-day turnaround. Asian prices were down notionally at $815-830/tonne FOB Korea because of poor market sentiment. An April deal was heard at $835/tonne FOB Korea.

European mixed xylenes are notionally pegged at $860-890/tonne. Asian solvent grade xylene was also notional at $815-830/tonne FOB Korea following tight supply expectation ahead of the Chinese New Year. Isomer-grade was stable at a notional $850-880/tonne FOB Korea.

Two European paraxylene (PX) deals were done at $1,020 and $1,045/tonne, before the bid/offer range eased to $1,010-1,030/tonne. The February Asian contract price fell by $30/tonne to $1030/tonne, and European sellers are looking to follow this trend for the European contract. Prices were $1,110-1,120/tonne CFR Taiwan in Asia. Offers were as high as $1,140/tonne CFR Taiwan for March, with April offers about $10/tonne lower. Bids went as low as $1,090/tonne CFR Taiwan on confirmation of an deal at $1,110/tonne CFR Taiwan for March.

The European February orthoxylene (OX) contract settled down €20/tonne at €780/tonne, with buyers and sellers unhappy with the number. Spot remains notionally in a wide range of $950-1040/tonne. Asian OX notionally increased by $10/tonne to $1,030-1,060/tonne CFR NE Asia. A deal was heard at $1,030/tonne CFR China Main Post but selling ideas were pegged at a higher $1,060-1,100/tonne.

There were three European February styrene barge contract settlements last week, in a range of €1,005-1,030/tonne, up an average of €95-108/tonne. Spot stood at $1,120-1,150/tonne, with deals done at $1,125 and $1,160/tonne. Asian prices were firmer in the first half of the week, following strong energy values. March and April deals fixed at $1,240-1,255/tonne FOB Korea, before falling to the current range.

A methanol deal for 1,000 tonnes of material was done in Europe last week at €369/tonne. Markets are quiet, and still in shock after a large drop in spot values since the start of the year. Export offers in Asia were heard at $415-425/tonne FOB China. Notional prices were at $350-370/tonne CFR China, with Chinese domestic prices stable at CNY 3300-3500/tonne ex-tank.

MTBE in Europe traded between $535-552/tonne at the start of last week, with the spot range on Thursday at $550-565/tonne. Demand is thin, with material heading to Europe in February. Asian prices were at $530-550/tonne FOB Singapore, up slightly with crude. Buying interest was weak.

European ammonia prices have slightly rebounded in Yuzhny, with sales at $278-282/tonnes FOB. Asian supply is tight, and will tighten further due to the unexpected shutdown of the Indonesian KPI plant for two weeks. Middle East prices are rising, and higher CFR prices are likely to be posted in Asia over the next few weeks.

The Markets Trends page features prices compiled using information from our sister service ICIS pricing. Data for all Monitors are also based on information from ICIS pricing editors.

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Benzene contracts fall in europe and the US

February benzene contracts tumbled on both sides of the Atlantic last Wednesday, reflecting the significant fall in spot numbers in January. In Europe, a weaker euro helped to offset the fall, although producers have seen margins over naphtha ease.

European benzene contracts dropped €98/tonne to €722/tonne. The price was based on a spot number of $937/tonne FOB and converted to the euro price using an official €/$ exchange rate at €1 = $1.2972.

The euro has weakened since the January settlement, when it stood at €1 = $1.3170. This exchange rate would have given a euro contract number of €711/tonne, based on a $937/tonne spot number.

Falling crude oil and naphtha prices saw European spot numbers drop from $1,085-1,100/tonne when the January contract was agreed. At the time, Brent crude stood at $60.02/tonne and naphtha at $534-536/tonne. When benzene settled last week, crude hovered at $56.05/bbl and naphtha at $524-527/tonne - a hefty rebound of almost $30/tonne from the previous day.

US contracts meanwhile crashed 48 cent/gal to $3.26/gal. US benzene spot prices went from a high of $3.77-3.79/gal FOB on 3 January to a low of $3.06-3.13/gal FOB on 23 January as the arbitrage from Asia and Europe opened. Spot was at $3.28-3.31/gal FOB on the day of the contract settlement. The February contract was below Lyondell Equistar's $3.50/gal FOB nomination, and also below trader expectations of a price in the $3.30s/gal.

 

DATA BANK

SPOT BULK CHEMICAL PRICES

	Asia		Europe
	$/tonne	Change	$/tonne	Change
Naphtha	568-571 CFR Japan NOM	nc	527-530 CIF	+6.5
Ethylene	1,300-1,330 CFR NEA NOM	-10	1,190-1,230 CIF NOM	-15
Propylene	1,080-1,120 CFR NEA NOM	-15	€850-860 CIF NOM	-20
Butadiene	1,050-1,090 CFR NEA NOM	-25	1,230-1,280 FOB NOM	nc
Benzene	910-920 FOB Korea NOM	-15	925-940 CIF NOM	-25
Toluene	815-835 FOB Korea NOM	-10	725-755 FOB	+30
Xylene4	815-830 FOB Korea NOM	-12.5	860-890 FOB NOM	-25
Paraxylene	1,110-1,120 CFR Taiwan	+45	1,010-1,030 FOB	+10
Orthoxylene	1,030-1,060 CFR NEA NOM	+10	950-1,040 FOB NOM	+5
Styrene	1,225-1,235 FOB Korea	-15	1,120-1,150 FOB	-30
Methanol	350-370 CFR China NOM	nc	€368-370 FOB NOM	-3.5
MTBE	530-550 FOB Singapore NOM	+25	550-565 FOB	+22.5
Ammonia	298-310 CFR Taiwan NOM	+14	278-282 FOB Yuzhny	+6

CONTRACT BULK CHEMICAL PRICES

	Europe		Europe
	€/tonne	$/tonne	$/tonne
Ethylene	855 Q1	1,139	915 Dec
Propylene1	820 Q1	1,092	893 Dec
Butadiene	870 Q1	1,147	1,168 Jan
Benzene	722 Feb	937	974 Feb
Paraxylene	840 Jan	1,108	1,157 Jan
Orthoxylene	780 Feb	1,006	1,025 Jan
Styrene3	1,005-1,030 Feb	1,296-1,329	1,300-1,366 Dec
Methanol	420 Q1	543	604-639 Jan
Ammonia			350 1H Jan

Prices contained in this magazine are gathered by ICIS pricing 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. ICIS Chemical Business and ICIS pricing accept no liability for commercial decisions that are based on the market information/prices reported in this magazine.

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, 4 = isomer grade

Spot prices in this issue are based on information that was available on 1 Feb January 2007. Dollar prices are based on rates of exchange on 29 January 2007. The dollar equivalent range is based on exchange rates that were prevalent at the time of contract closure. $1=€0.773 $1=£0.511 €1=£0.661

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

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

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