19 July 2010 00:00 [Source: ICB]
Players are waiting to see the impact of a fire that closed a Formosa Petrochemical Corp. (FPC) naphtha cracker in Taiwan on July 7. Its 109,000 tonne/year butadiene (BD) unit is also down. FPC is stopping BD parcels for July and August, removing 9,000 tonnes/month from the market. This may lead to higher BD values, which have faltered of late. Similarly, ethylene and propylene prices may be affected.
Meanwhile, numerous contracts are still being settled. Europe's July paraxylene (PX) settlement is down by €50/tonne from June at €785/tonne FD Northwest Europe (NWE). "The point is Asia - it's so low," says one producer. "I think both sides are not happy with the number. It's a kind of compromise." Asia's July contract had fallen to a nine-month low of €738/tonne CFR Asia, sliding by $40/tonne because of softening derivative demand (see page 17).
In the US, orthoxylene (OX) contracts dropped as anticipated - the benchmark for July was 42.5 cents/lb ($937/tonne) FOB US Gulf, down by 2.5 cents/lb. The 6% fall from June's 45 cents/lb nearly matched the 5% decrease in the US July mixed xylenes (MX) contract upstream.
US methanol spot barge prices, meanwhile, have been dented by decent availability and talk of the new 850,000 tonne/year Metor II plant in Venezuela starting up. July values fell to 89-91 cents/gal in the week ending July 9, from 90-92 cent/gal a few days earlier.
Spot prices have fallen by 20% since a May surge - caused by an extended outage at the 1.7m tonne/year Atlas plant in Trinidad. Since its restart in June, prices have stabilized at around 90 cents/gal - still about 20 cents/gal above levels seen before the outage.
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