Activity picks up, along with prices

09 July 2007 00:00  [Source: ICB]

Aromatics see the most significant spot gains, but markets are largely subdued as contract negotiations reach their climax. European butadiene contracts are still outstanding

August Brent crude prices surged to a 10-month high on Thursday, with the ICE Futures contract hitting $73.86/bbl.

Open-spec naphtha cargoes are in a $690-695/tonne CIF NWE range. July swaps are at $689-690/tonne. Second-half August prices in Asia are $715-717/tonne CFR Japan, buoyed by strength in the crude market.

European ethylene has become a little more balanced following BASF's force majeure declaration at its 600,000 tonne/year Ludwigshafen, Germany, cracker because of compressor problems. The current spot range remains around $1,200-1,250/tonne.

Asian prices are notionally firmer. Relatively limited spot supply from traders has raised bids in Taiwan and Indonesia, given relatively healthy downstream prices in the vinyls and polymers sectors. The range is $1,000-1,030/tonne CFR NE Asia.

Prompt supply is improving for European propylene, helped by Basell permanently stopping production at its 240,000 tonne/year polypropylene (PP) unit at Pernis, Netherlands. Spot propylene prices are nominal, at €890-915/tonne. Inland Germany prices are reported firmer. Asian values are at $970-1,030/tonne CFR NE Asia. A deal was done for first-half August delivery in the mid-$1,000s/tonne CFR Indonesia.

European butadiene (BD) contracts are still unresolved, with buyers and sellers at an impasse. Producers are said to be looking at a rollover or slight increase, while some buyers are pushing for a major drop. The spot range is a little wider, at $1,160-1,220/tonne. Asian butadiene is unchanged and still nominal at $850-860/tonne CFR NE Asia.

Benzene numbers are up, on improved buying interest and firmer crude values. The range is $1,115-1,125/tonne, with numerous trades done. The July contract was settled down €78/tonne at €790/tonne FOB NWE. This was blamed on the $80-85/tonne fall in spot prices last month.

Asian prices are up at $1,065-1,075/tonne FOB Korea. A bid was cited for a big berth second-half July shipment at $1,040/tonne.

Toluene prices are $895-910/tonne in Europe, up on rising gasoline and US numbers. Some 28,000-30,000 tonnes has been fixed to move across the Atlantic from Europe. Asian toluene is at $880-895/tonne FOB Korea. An offer heard at $897/tonne was countered by a bid at $885/tonne for any August lifting.

Mixed xylene prices in Europe are relatively steady at $930-950/tonne in a balanced to tight market.

Asian numbers are unchanged at $930-940/tonne, although deals were heard for isomer grade at $930 and $950/tonne. Solvent is quoted at $890-910/tonne.

No business has been done for European orthoxylene (OX). Spot numbers are up slightly at $1,210-1,230/tonne, largely because of production issues in Germany.

OX in Asia is pegged at $1,070-1,080/tonne CFR China Main Port, amid thin trades. Buying indications are soft due to weak phthalic anhydride (PA) downstream.

There have been three styrene barge contracts agreed, taking the July range to €1,105-1,133/tonne.

Spot-wise, prices are up because of higher benzene at $1,390-1,405/tonne for July. Some producers have increased buying to cover themselves in advance of the cracker shutdowns in August.

Buy-sell indications for August parcels are cited at $1,325-1,340/tonne FOB Korea.

A €192/tonne FOB Rotterdam methanol deal of 1,000 tonnes for July delivery was the only business reported this week. Spot prices have continued their gradual ascent since the third quarter contract settled a few weeks ago. Numbers are now €190-195/tonne.

Asian values are fairly stable at $235-245/tonne CFR China, with no trades heard done. Southeast Asia prices are up $5-10/tonne at $250-270/tonne SE Asia.

A surge in trades was reported in Europe's MTBE market early last week. Monday proved most active, with deals concluded at $874-875/tonne. Prices continued to firm as the week progressed. Bids and offers on Thursday were $875-900/tonne, up on high gasoline prices, which were trading at $757/tonne. The factor to gasoline is 1.18.

Prices are also up in Asia at $810-820/tonne FOB Singapore. High crude and gasoline values, combined with limited spot supply, have supported the higher numbers. Healthy blending demand is seen in Asia. Sporadic Chinese cargoes offered at $800/tonne are deemed too high and few deals have been heard concluded.

The ammonia market is in limbo, waiting for more direction on prices. In Yuzhny, producers have yet to price second-half July tonnes and insist on prices in the $230s/tonne FOB. Traders are unwilling to pay at those levels.

Meanwhile, a new tender in India has shown offers at $5/tonne below previous levels, underlining an attempt by Middle East producers to keep former Soviet Union ammonia out of their markets.

The lowest offer suggests a netback in the low-$260s/tonne FOB Middle East.

The Markets Trends & Data pages feature prices compiled using information from our sister service ICIS pricing. Data for all Monitors are also based on information from ICIS pricing.

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Hot on the heels of the Asian Contract Price (ACP), July's initial European paraxylene (PX) contract has been agreed down €98/tonne from June. However, this had not been widely confirmed at the time of going to press.

After weeks of dwindling spot numbers and lacklustre demand from the purified terephthalic acid (PTA) market downstream, the €850/tonne FD NWE range was deemed largely in line with expectations.

European spot activity has been extremely muted for the past few weeks because of the contract negotiations. Prices are notionally pegged at $1,120-1,160/tonne FOB Rotterdam.

There are signs of tightness in Germany as force majeure has been declared on PX and orthoxylene (OX) following problems at one producer's reformer. It is unclear how long the contractual caveat will remain in place.

The ACP was agreed at $1,130/tonne CFR Asia, representing a massive $115/tonne drop on the previous month.

Spot prices in the region have been on a downtrend since early June due to PTA prices softening to $900/tonne CFR China, and isomer xylene values dropping.

However, higher crude boosted mixed xylene numbers last week, taking prices to a $1,135-1,155/tonne CFR Taiwan range. Trades have been concluded at $1,135/tonne CFR Taiwan and CFR China.

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