23 April 2012 00:00 [Source: ICB]
An unplanned shutdown at CPC's 500,000 tonne/year No.5 cracker in Kaohsiung, Taiwan, could lead to the producer cutting its ethylene and propylene allocation to the domestic market, buyers suggest. The state-owned firm had to shut the cracker on April 6 after a pipeline leak and subsequent explosion. Should the plant remain shut, daily propylene supplies are expected to be cut to 60%, with ethylene down to 53%, says one buyer. Some say it could remain down for one to two weeks. It is thought unlikely that the outage will have a major impact, with derivative markets such as polyethylene (PE) weak and having already cut operating rates owing to hikes seen in olefins pricing.
Europe's April paraxylene (PX) contract has fallen by €43/tonne from the previous month to €1,225/tonne FD Northwest Europe (NWE). One buyer said: "We are happy that [the European contract price is] lower than March. It will help us to remain competitive." It added that demand was lower than this time last year and said that had prices been higher, it would have been difficult to pass onto customers downstream. The Asian Contract Price is not yet fully settled, although agreements have been heard at $1,585/tonne CFR Asia.
An initial orthoxylene (OX) contract was agreed for April at €1,180/tonne FD NWE, marking a €50/tonne hike. In the US, the OX contract rolled over from March at 71 cents/lb ($1,565/tonne). With availability limited following a force majeure declaration, the April contract settled flat rather than falling by 2 cents/lb as had been expected.
US March styrene contracts edged up by an average of 1.00 cents/lb to 71-75 cents/lb, fueled by the 3 cents/gal March benzene hike. Styrene settlement increases ranged from 0.50-1.50 cents/lb from February. Sellers had proposed a 2.00-3.00 cents/lb rise.
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