Americas top stories: weekly summary

ICIS Editorial

05-Dec-2016

HOUSTON (ICIS)–Here are some of the top stories from ICIS Americas for the week ended 3 December 2016.

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US acrylates buyers expect lower Dec prices
US acrylic acid and acrylate esters customers are expecting a holiday gift, of sorts, this December – lower free-market contract prices. Buyers said that they expect to see feedstock-driven price increases in September and October rolled back in December. November propylene fell by 6 cents/lb ($132/tonne), which is exerting strong downward pressure on December free-market acrylates prices.

INSIGHT: Latin America can boost feedstock via NGLs recovery
Mexico and Argentina are leaving large volumes of ethane in their gas streams, a potential source of feedstock for existing or new crackers. This phenomena is called ethane rejection. At times, companies can deliberately leave ethane in the gas stream if the price of the feedstock does not justify the expense of extracting it. This is happening in the US, where the shale-gas boom has caused ethane production to exceed demand.

Rising inventory turns US PP into buyers’ market
Rising inventory prompted by an influx of imported material earlier this year has once again turned US polypropylene (PP) into a buyers’ market. US November PP contracts settled down 7 cents/lb, partly because of a drop in a major feedstock but also carrying a small additional reduction stemming from inventory gains.

Canada approves two oil pipelines, still needs capacity
Canadian oil producers on Wednesday welcomed the federal government’s approval of two big pipeline projects to ship oil from Alberta province to markets, but they also said that the country needs more pipeline capacity. Prime Minister Justin Trudeau’s government approved Kinder Morgan’s Trans Mountain project from Alberta to a port near Vancouver, British Columbia, and Enbridge’s project to replace its 1,660km “Line 3” oil pipeline from Alberta to Superior, Wisconsin, in the US.

US Dec BD contracts mostly roll amid global balance
US butadiene (BD) contracts for December have settled at a rollover for three producers and a decrease of 2 cents/lb for one producer, sources confirmed amid a relatively balanced global market. Sources said that an overall rollover in December contracts makes sense, despite early expectations that pricing for the month would slip. Many market participants had bearish sentiment regarding December pricing because of softening spot prices amid ample supply, lacklustre demand, as well as the recent Asia downtrend.

US GDP, inflation to rise in 2017 – NABE forecast
US economic growth and inflation should “creep higher” next year, and the US Federal Reserve will likely hike interest rates in 2017, according to a survey panel of 52 professional forecasters. The National Association for Business Economics (NABE) said that its latest “Outlook Survey” showed that the panel’s expectations for broad economic growth through 2017 changed little in the last three months.

US spot benzene rises on higher oil
US spot benzene was assessed higher on the back of strong gains in upstream crude oil. The range of prices for spot benzene was wide after a quiet market led to some softness early in the week ahead of the sharp gains at mid-week. The main driver for the increases were the gains in crude oil markets after OPEC members agreed to crude oil production cuts on Wednesday.

US PE export prices dip 2 cents/lb across the board
Domestic US polyethylene (PE) prices for export dipped across the board by 2 cents/lb during a thin week of trading. The slippage came as contract prices for November fell by 3 cents/lb. US low density (LDPE) film bagged spot FOB (free on board) for export dropped to 54-56 cents/lb.

US Nov ethylene contracts fall 5.25 cents/lb
US ethylene contracts for November were assessed at a decrease of 5.25 cents/lb, in line with the month-on-month slump in spot prices and drop in cash costs. Several contract participants confirmed the settlement. However, at least one party said it is not agreeing to the contract price for the month.

US styrene spot prices up again on tight supply
There were no trades in the US styrene spot market last week, but bids emerged at higher prices throughout the week. Interest to export product to Asia remained strong, but rising prices kept US sellers on the sidelines in anticipation of even higher prices. Asia is still the better netback for US styrene exporters. But a production issue in Europe, and sharply higher prices there, are narrowing the price differential between Asia and Europe.

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