02 March 2009 00:00 [Source: ICB]
Weak downstream demand dents producers' hopes for higher numbers. After two years, US caustic soda values could fall. Arbitrage windows may soon open?xml:namespace>
Poor derivative demand and improved supply of Chinese polyvinyl chloride (PVC) could halt PVC's price uptrend in
Values have risen over the past 12 weeks, but prices of imports into
The issue is compounded by a rise in production rates among
First-quarter (Q1) contracts for European polybutylene terephthalate (PBT) are down by €0.50-0.75/kg due to weak downstream demand. Prices are pegged at €2.20-3.25/kg.
Filled grade PBT is at €2.20-2.50/kg, a drop of €0.65-0.75/kg from previous levels.
Prices for unfilled grade are at €2.30-2.60/kg - down €0.50/kg from Q4. Flame retardant prices for Q1 are at €2.80-3.25/kg.
Buyers and sellers anticipated the dip after the slump in the key automotive sector.
An initial propylene settlement was agreed on February 20 at €497/tonne FD NWE, up €42/tonne. A company source says it is aiming for a €50/tonne PP hike in March.
European demand is not particularly strong, but export activity - mainly to
Homopolymer injection prices at the end of February were reported at €740-750/tonne FD NWE on a gross basis. PP producers had not managed to cover the February propylene increase of €25/tonne.
Weakened sentiment and slackening demand, amid a worsening global automotive market, have put a stop to a price rally in
BD spot prices have jumped by about $200/tonne to $550-570/tonne CFR Northeast (NE)
Non-oil grade 1502 styrene butadiene rubber (SBR) prices have softened to yuan (CNY) 11,500/tonne ($1,682/tonne) ex-warehouse after jumping by 50% in just two months to CNY12,000/tonne since mid-December.
Asian acrylonitrile-butadiene-styrene (ABS) resin prices are easing because weaker Chinese demand is weighing on sentiment.
Prices are down at $1,080-1,100/tonne CFR China, marking the end of an uptrend that started in January. Spot ABS climbed above $1,100/tonne in mid-February from below $1,050/tonne in early January.
Buying interest improved after the Lunar New Year last month. Sellers attribute this to end-users and traders replenishing stocks.
However, with the global economy continuing its downward spiral and demand looking increasingly uncertain, some traders are keen to offload stocks in anticipation of weaker consumption in March.
In the week ending February 20, spot PX in Asia fell by up to $60/tonne to $850-860/tonne CFR Taiwan - almost equal to Europe's $830-860/tonne FOB
However, traders say that the price gap between both regions could soon widen, attracting cheaper cargoes from
From December 2008 to January 2009, at least 12 parcels of spot PX arrived in Asia from
The improvement seen in US styrene prices in February could extend into March on the back of tighter supply and gains in feedstocks ethylene and benzene.
Consumers saw February contracts climb by around 5 cents/lb from January's range of 32.75-37.75 cents/lb.
Styrene makers predict that traditional summer demand would start late in the first quarter. One seller says it has already noted an improvement, due to restocking.
Buyers say that benzene and ethylene increases could justify hikes of at least 5-6 cents/lb as styrene stocks remain low.
Barges for March were talked at 32-33 cents/lb last Tuesday, consistent with an increase of 6.5 cents/lb from early January.
Chances of success are slim, says one transformer, adding that there is no demand for resin to justify the increase.
Another North American producer says that hikes are needed to help restore sagging production margins, but points out that the initiative came at least one month too early.
North American EPS markets are in the midst of the low-demand season for the construction sector. Bead demand for packaging applications also remains soft.
US caustic soda contracts could fall for the first time in two years in February due to poor demand. Contract prices for caustic soda have held at a record high of $1,075-1,145/dry short ton (dst) since September 2008. However, a
The seller notes that alumina and pulp and paper production has been scaled back.
The spread between European benzene and styrene broke the $400/tonne barrier last Tuesday for the first time since July 2008. Styrene demand is strong, while benzene prices continue to fall due to weak buying interest.
A styrene deal was reported at $725/tonne FOB
Production cutbacks have tightened styrene, raising spot prices. With product arriving from the
Conversely, benzene has seen a downtrend, with buying interest weak, while crackers are running almost as normal as demand for ethylene derivatives, such as polyethylene (PE), is better than expected.
One trader notes that with European buying interest low, spot benzene could ease, opening the arbitrage window to the
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