03 October 2010 09:51 [Source: ICIS news]
By Truong Mellor and Julia Meehan
LONDON (ICIS)--Players in the European aromatics sector will be focusing on volatile price movements, import/export dynamics and expected availability restrictions owing to planned turnarounds in the fourth quarter, as they gather at the 44th annual European Petrochemical Association (EPCA) meeting this weekend.
Although the October benzene contract fell by €36/tonne ($50/tonne), in line with current spot values, talk of planned turnarounds in the fourth quarter as well as firming demand and a lack of imports arriving into ?xml:namespace>
“The ARA region is still well supplied for prompt material, but stronger demand will see these stocks consumed at a good rate,” said one seller.
While October spot levels were currently hovering round the $910-920/tonne CIF (cost, insurance and freight) ARA (Amsterdam, Rotterdam, Antwerp) mark, one trader felt the numbers should already be closer to $950/tonne in line with reduced availability later in the month and increased buyer interest from derivative markets.
The trader added: “Right now, the weakening US dollar is also having an upward effect on spot values.”
Another producer felt that while demand would remain strong through October and November, towards the end of the year players would start to think about inventory management.
“We are certainly seeing a better situation now than in September,” the producer said. “Demand will stay strong for Q4, so the main issue is the planned turnarounds and the fewer imports arriving in
Styrene values in
However, sources still described the European market as long, owing to a raft of US imports arriving throughout September and strong propylene oxide (PO) demand leading to a glut of material from POSM plants. An initial October contract settled down €20/tonne at €1,013/tonne.
A second barge contract was agreed late on Friday afternoon between another pair of settlers at €997/tonne FD (free delivered) NWE (northwest Europe), down €9/tonne from the previous month. While a decrease was largely expected due to a well supplied prompt market, a rallying of prices in the spot market on the back of a strong Asian styrene sector tempered the size of the drop.
October spot cargo was currently valued around the $1,135-1,140/tonne FOB (free on board)
“Asia is the driver at the moment,” said one trader, pointing out that the market was currently trading around $85/tonne higher than
“With the current CFR [cost and freight]
“But they better hurry up. The strong demand is largely being driven by pre-Christmas production for toys and gifts, so the cut-off for these volumes would be late November.”
There was also ongoing talk of export opportunities to
The European toluene market has seen strong contractual demand throughout 2010, although a thin spot market that some players feel is increasingly disconnected from energy price movements has made it difficult to peg values.
“The market seems well balanced,” said one seller. “But we have not seen many people showing spot volumes.”
Another producer said that while the major news amongst toluene players at EPCA last year was the withdrawal of Exxon from the market, most are now looking at the “rogue” nitration grade cargoes that have intermittently appeared from the Mediterranean region, and their effect on ARA spot values.
“It has been more of a buyer’s market in 2010,” the producer said.
Supply and demand for 2011 would also be a major talking point between paraxylene (PX) market players, with
“The polyester chain remains strong and the polyester majors are bullish, but margins are not good,” said a PX market participant.
This was because the
Paraxylene producers had cut reduction at a time when demand is strong, which in turn was keeping the market tight, but doing very little for producer margins.
“The market is getting ready for EPCA and discussions for the PX and OX contracts will spills into the coming days,” said a contract settled on the selling side.
No hints were given as to market expectation from contract settlers on the selling side on either PX or OX.
Downstream, PX observers spoke about increases ranging between a rollover to a €50/tonne increase from September to October and a possible rollover on OX.
In relation to the PX contract, a major buyer said: “It can’t go up. It’s got to be a rollover because of exchange rates. The price will barely move”.($1 = €0.73)
For more on benzene, styrene, toluene or PX visit ICIS chemical intelligence
Please visit the complete ICIS plants and projects database
To discuss issues facing the chemical industry go to ICIS connect
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections