Olefins and aromatics stay subdued

26 March 2007 00:00  [Source: ICB]

Open-spec naphtha cargoes were pegged at $590-595/tonne CIF NWE last Thursday. April swaps are at the top of this range at $595-596/tonne. Asian first half May naphtha prices are notional at $641.50-644.50/tonne CFR Japan. Second-half May numbers are $633.50-636.50/tonne.

Bi-monthly ethylene contract negotiations are ongoing in Europe, with some producers vying for higher numbers (see page 29). There has been little change in the spot market, with prices at $1,190-1,230/tonne.

Northeast Asian spot ethylene prices are notionally lower, at $980-1,000/tonne CFR, as the market succumbed to pressure from ample supplies from South Korea and Japan.

Propylene spot numbers are fairly steady at €860-880/tonne, although one trader says prices should be no higher than €870/tonne levels. No deals have been heard done.

Asian activity is subdued with buyers unwilling to pay anything above $1,100/tonne CFR. Demand from southeast Asia has waned in anticipation of PTT Chemical's TOC No 1 cracker restart in early April, say traders. The range is $1,080-1,120/tonne.

Spot butadiene (BD) in Europe has edged up to $1,210-1,260/tonne. The market is still balanced to tight. Shutdowns at extraction units are under way, with outages scheduled through to May.

Contracts look likely to climb above the €870/tonne first quarter settlement, largely because of strong demand, rising naphtha costs and upcoming turnarounds. One seller is pushing for a hike of €30/tonne.

Asia spot prices have dipped below $1,000/tonne CFR NE Asia levels for April shipments, down around $100/tonne, because of rising inventories and shrinking demand (see page 29). The spot range is quoted at $950-1,000/tonne.

March benzene spot values are pegged at $1,040-1,060/tonne in Europe, with April slightly lower at $1,030-1,050/tonne. Business is reasonably active, despite a slow start to the week and players travelling to an industry event in the US.

Asian numbers are climbing on the back of firmer crude. May parcels are quoted at $995-1,005/tonne FOB Korea, up from deals finalised mid-week at $975-980/tonne.

European toluene is down a little at $780-800/tonne. The market is muted, although a deal was done on Monday. Prices rebounded in Asia with an offer for H2 April at $780/tonne FOB Korea, but no bids surfaced. An offer for May lifting at $800/tonne FOB Korea met with a bid at $785/tonne.

Mixed xylene in Europe has edged up to $830-870/tonne following firming US prices. No trades have been heard for several weeks.

In Asia, isomer-grade xylene is relatively stable at $890-910/tonne FOB Korea. One deal was done at $910/tonne CFR Taiwan for April. Solvent material is quoted lower at $770-780/tonne FOB Korea for April.

A couple of paraxylene (PX) deals have been concluded in Europe, although the market is otherwise quiet with players heading to the US. March spot numbers are pegged at $1,030-1,050/tonne, with April in a $1,035-1,055/tonne range.

Asian PX is down to $1,100-1,115/tonne CFR Taiwan because of weaker purified terephthalic acid (PTA) prices. Some Asian contract price (ACP) nominations have emerged up $30-100/tonne for April.

Europe's orthoxylene (OX) market is quiet with one deal done. Supply is tight. The range is $1,000-1,040/tonne.

Offers for Asian OX are at $1,080/tonne CFR NE Asia, with a deal rumoured at this level. This represents a $30-40/tonne drop week-on-week, on the back of falling phthalic anhydride (PA) prices downstream. Buying ideas are reported at $1,050-1,060/tonne CFR CMP, with most buyers waiting for prices to bottom out before purchasing.

European styrene is largely inactive, with a single trade reported. Spot prices are heard at $1,270-1,285/tonne for April. Demand is still decent in downstream polystyrene (PS) and expandable polystyrene (EPS) markets.

Asian prices have rebounded on firmer benzene and energy numbers. Prices for May cargoes are in a range of $1,235-1,245/tonne FOB Korea, up from earlier deals at $1,230-1,235/tonne.

An MTBE trade was reported in Europe on Tuesday at $655/tonne and $680/tonne on Thursday. The range is $675-710/tonne, with the factor to gasoline around 1.10.

Asian prices are stable but demand for gasoline in the US may have a knock-on effect in Asia and Europe. Sellers could use this as an opportunity to push prices higher.

Yuzhny ammonia prices remain flat in the mid-$280s/tonne. Traders are closely watching the US market. A new enquiry emerged from SABIC to take Yuzhny ammonia to India, encouraging producers to keep prices firm. Indian demand is strong, with some spot enquiries likely to set higher prices for April deliveries. In Taiwan, a spot purchase in the low-$370s/tonne CFR may set the tone for contract talks.

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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Plummeting methanol spot prices in Europe since the start of the year have led to the second quarter contract settlement being widely agreed down €170/tonne.

This takes numbers back to €250/tonne FOB Rotterdam T2 levels, which were last seen in the third quarter of 2006, before the market was blighted by unexpected plant shutdowns and strong demand.

Some buyers and sellers admit they had expected discussions to drag on until the end of March and were surprised that many had been so quick to accept the massive price drop.

Methanex had originally suggested €330/tonne but soon aligned its European Posted Contract Price to the €250/tonne quarterly figure.

Some producers have aired their concerns that the hefty price drop would affect high-cost plants, such as those in Serbia and Slovenia.

Methanex has also suggested that the downward movement could wipe out any opportunities to export methanol to China.

The company added that the scale of the decline was risky and there was a chance that prices could rebound. Europe is now the lowest-priced region.

Meanwhile, European spot numbers are down from the previous week to a €220-230/tonne range. No business has been done. Supply in Europe is currently described as long.

In Asia, methanol prices are nominal at $320-330/CFR China. Prices fell around $40/tonne on the previous week's levels because of strong local production and weak downstream demand.

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