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.
(Please click on the link to read the full text.)
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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