Chemical market trends: Spot pricing retreats and contracts drop

18 June 2012 00:00  [Source: ICB]

A 16% drop has been seen for US ethylene contracts, with values for May agreed at 46.25 cents/lb ($1,020/tonne). The 9 cents/lb decline was blamed on falling spot numbers and a reduction in production costs during the month.

The US June propylene settlement slumped by 23% month on month to reach a 30-month low. Polymer Grade Propylene (PGP) fell by 15.50 cents/lb to 52 cents/lb, its lowest price since the 49.50 cents/lb reported in November 2009. Contracts were expected to fall as spot prices had retreated.

Most May US styrene contracts have rolled over at 70.00-74.00 cents/lb. Some players reported increases of 1.00-1.50 cents/lb, while others settled down by a similar amount. Benzene feedstock prices had moved down to $3.80-3.84/gal levels in May, putting downward pressure on the styrene market - although benzene has since rebounded. Spot ethylene, meanwhile, fell and added pressure to the styrene market.

Buyers say a higher third-quarter methanol contract in Europe is not guaranteed given decreases in global spot prices. The European spot market had fallen by €15-21/tonne by June 8 from the week before. Prices in China had eased by $13-18/tonne week on week, while US prices were down 3 cents/gal. "Every week until today I have said we will see an increase. Today, I have said we will see either an increase or a rollover," a buyer said at the time. Another said a drop was now possible.

  • Please note that from July 2, ICIS will no longer be publishing the key chemical prices each week. It will be replaced by commentary and analysis highlighting significant movements of key chemical prices. Keep track with the most up-to-date pricing information.

By: Andy Brice
+44 20 8652 3214

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