Price and market trends: News in brief

Source: ECN

2018/08/10

EUROPE

SLIGHT INCREASE IN AUGUST PO CONTRACT PRICES

European PO formula contract prices have increased by approximately €6/tonne in August, in line with the upstream propylene contract price, market players have confirmed. PO formula contracts are typically linked to 80% of the upstream propylene monthly contract price movement. This is following news of an €8/tonne increment in the upstream propylene contract price for August. July PO formula contract prices were assessed steady at €1,532-1,582/tonne FD NWE.

PVC SPOT PRICE RISES, AUG OUTLOOK STABLE TO SOFT

EU PVC spot prices rose on the back of higher prices quoted in the market, according to sources. The domestic spot price was assessed at €820-890/tonne FD, up €20/tonne on the high end. The price outlook for the rest of August is stable to soft, with sources seeing decreases or rollovers as likely due to the flat feedstock ethylene price, combined with seasonally low market activity.

EO AUGUST CONTRACTS ROLL OVER ON ETHYLENE STABILITY

European EO August formula contracts have rolled over on the back upstream ethylene stability, according to ICIS calculations. The European ethylene August contract reference price for August rolled over from July at €1,135/tonne. The EO industry typically takes 80-85% of the ethylene price movement. ICIS uses an average of 82% in its calculations. Market fundamentals in the European EO market are broadly unchanged as supply outside contracted volumes is limited.

CAUSTIC SODA CONTRACT FALLS ON REBALANCING

European caustic soda quarterly contract prices for the third quarter have settled with decreases as the market has rebalanced towards historical norms, according to market sources. The NWE Q3 contract price was assessed at €675-715/DMT FD, down €15/DMT on both ends. European caustic soda prices has readjusted downwards towards previous norms following tightness in 2017.

EUROPE ACETONE MMA AUGUST CONTRACT FIRMS

The August MMA contract has firmed, a buyer and producer confirmed. An increase of €6/tonne led to a settlement of €863/tonne FD NWE. The agreement followed the rise in upstream August propylene costs, but was settled at a time of stable acetone spot pricing due to oversupply.

METHYLENE CHLORIDE STABLE, SUPPLY BALANCED

European methylene chloride spot prices were assessed stable to firm, with ongoing balanced to tight market conditions, according to sources. Producers targeted a mixture of rollovers and increases, depending on the starting point. Prices were assessed at €580-630/tonne FD NWE and the Mediterranean. Supply remains tight, though conditions are easing slightly with the help of lower summer demand.

POM Q3 CONTRACTS SETTLE HIGHER ON METHANOL COSTS

European POM contract prices have settled for Q3 at an increase of €0.10/kg. POM Q3 contract prices were assessed at €2.25-2.35/kg FD NWE. A wide range of settlements was heard either side of the assessed increase, with sources saying the size of Q3 increases was strongly influenced by the size of increases seen by individual accounts in the first half of the year.

EUROPE MEK SPOT STABLE, ASIAN ARBITRAGE OPENS

European MEK spot prices have rolled over in a relatively quiet market, according to sources. Spot prices were assessed at €1,300-1,345/tonne FD, making them stable compared to the previous week. Spot prices were mostly within the same range as in late July. One source quoted prices as high as €1,370/tonne FD, but figures at this level could not be widely confirmed.

PBT SETTLES WITH INCREASES ON STRONG DEMAND

European PBT contract prices have been settled at increases of €0.05/kg across assessed grades for Q3. Unfilled PBT was assessed at €2.97-3.23/kg FD NWE, with filled PBT at €3.23-3.34/kg FD NWE and flame-retardant PBT at €4.45-4.51/kg FD NWE. Increases were agreed with the extent depending on starting point and the players involved. Upward pressure was put on PBT prices by strong demand for material.

ASIA

ASIA ACN RISES FURTHER ON SUPPLY CRUNCH

Asia’s acrylonitrile (ACN) prices continued to rise amid a supply crunch in the region despite the start-up of a new plant in China. Asia ACN prices rose by $20-30/tonne on a week-on-week basis to $2,180-2,220/tonne CFR NE Asia in the week ended 3 August, according to ICIS. Supply in Asia has been tight amid ongoing plant turnarounds in China, and is expected to remain so with upcoming heavy maintenance works.

CHINA’S ECH PRICES STABLE-TO-SOFT

China’s domestic epichlorohydrin (ECH) prices were stable-to-soft at about yuan (CNY) 11,600-12,000/tonne on weak downstream demand. On 7 August, domestic prices were at around $1,635-1,691/tonne on an import parity basis. On 31 July, China’s domestic ECH prices were at CNY11,800-12,500/tonne on a DEL basis, according to ICIS data. Buying indication remains capped at around $1,800/tonne CFR CMP.

CHINA PP FUTURES RISE 1.29% AMID TIGHT SUPPLY

China’s polypropylene (PP) futures increased by 1.29% on 6 August amid tight supply conditions. The September 2018 PP contract, the most actively traded contract on the Dalian Commodity Exchange (DCE), closed at Chinese yuan (CNY) 10,053/tonne, up by CNY128/tonne from 3 August. Meanwhile, prices for domestically-produced yarn grade in east China also climbed to Chinese yuan (CNY) 9,950/tonne, up by CNY125/tonne from 3 August, according to ICIS data.

ASIA IX-PX SPREAD HITS FRESH HIGH

The Asia isomer-xylene (IX) and paraxylene (PX) spread is at a fresh high and at a level close to last seen in December 2014, according to ICIS data. Based on the assessments in the week ended 3 August for the FOB cargoes loading from South Korea, the spread at present averages $209.2/tonne. The break even for regional end-users was $120-140/tonne.

ASIA PBR FACES UPWARD PRESSURE FROM BD

Asia spot polybutadiene rubber (PBR) prices are facing upward pressure due to higher feedstock butadiene (BD) cost. Spot offers for the high-cis PBR were revised up by a further $100/tonne the week ended 7 August to $2,050-2,100/tonne CFR southeast Asia. “We have no choice but to revise our PBR offers up, as our margins had been severely eroded,” a northeast Asian PBR maker said.


CHINA PHENOL PRICES RISE SHARPLY ON TIGHT SUPPLY

China’s phenol has risen by Chinese yuan (CNY) 500/tonne on the back of tight supply caused by maintenance shutdowns while buyers have narrowed down purchases citing high prices. Offer price were raised on Thursday to CNY10,300-10,400/tonne on the back of tight supply. Earlier this week offers went up. “Phenol price is rising too quickly, and we just bought hand to mouth.” one downstream buyers said.

ASIA ABS CLIMBS ON BUOYANT FEEDSTOCK

Firm feedstock costs and resurgent demand has bolstered prices of acrylonitrile-butadiene-styrene (ABS) in Asia. Spot prices in the key Chinese market were higher in the mid-to-high $1,900s/tonne CFR the week ended 7 August. Amid the ongoing US-China trade war and the imminent imposition of tariffs, a number of ABS end-users decided to step up production in August and September.

CHINA PSF 1.4D OFFERS RISE ON FEEDSTOCKS

Offers for China-origin polyester staple fibre (PSF) 1.4 Denier (D) cargoes have risen as feedstock costs continued to firm after recent hikes in purified terephthalate acid (PTA) values. Offers were higher at $1.30/tonne FOB China, as compared to $1.28/tonne FOB China a week ago. However, trades were limited with offers at higher levels. Demand for exports were also under pressure because of volatile currency exchange rates.

INDIA’S TOLUENE PRICES EXTEND GAINS

India’s ex-tank toluene prices have extended gains as distributors were much more insistent on their higher offer levels amid ongoing cost pressures, market participants said on 7 August. Ex-tank discussions went up to around Indian rupee (Rs) 60/kg ex-tank in west coast India, they said, adding that deals for some cargoes have already been done in the afternoon of 7 August.

AMERICAS

US TDI PRICES DECLINE ON LENGTHENING SUPPLY

US prices for toluene di-isocyanate (TDI) were assessed 5 cents/lb ($110/tonne) lower on lengthening supply and sluggish demand. This followed a prolonged run-up in prices during a period of persistently tight supply stemming from an extended shutdown at BASF’s 300,000 tonnes/year TDI plant in Ludwigshafen, Germany, as well as the delayed start-up of Sadara’s new 200,000 tonnes/year TDI plant in Jubail, Saudi Arabia. Consumption from the bedding and furniture sector is sluggish.

POLYETHER POLYOL PRICES TRACK UPSTREAM HIGHER

US prices for polyether polyol prices were assessed 5 cents/lb ($110/tonne) higher, tracking rising prices for upstream propylene. Higher upstream costs prompted sellers to announce increase initiatives ranging between 8-13 cents/lb. Some contracts were concluded with rollovers, while others settled with increases of up to 8 cents/lb. Downstream demand for polyurethane systems has been steady, with improving supply of polyurethane co-feedstocks methyl di-p phenylene isocyanate (MDI) and toluene di-isocyanate (TDI) leading to healthier polyol consumption.

US AUGUST EPOXY RESINS STEADY-TO-SOFT

Sentiment is mixed regarding August epoxy contracts. Some expect prices to be mostly flat as supply and demand fundamentals return to a more balanced state. Others believe they will continue to soften as the market is well supplied and imports are priced competitively. Firm feedstock costs are placing upward pressure on epoxy, but a steady flow of imported material may continue to push prices down. ICIS had assessed the US July liquid epoxy resin contract price at $1.56-1.61/lb ($3,439-3,550/tonne) DEL.

US AUGUST NYLON INCREASES ON HIGHER BENZENE

US August nylon prices were assessed at a 1 cent/lb ($22/tonne) increase, tracking higher prices for August benzene contracts. ICIS US nylon assessments are formula-based and tied to movements in feedstock costs. US nylon 6 supplies remain available, while global nylon 6,6 supplies remain constrained amid ongoing feedstock adiponitrile (ADN) shortages and other production delays. US nylon 6 prices for injection moulding unfilled in bulk were $1.17-1.27/lb.

US AUGUST EPS PRICES ROLL OVER FROM JULY

US expandable polystyrene (EPS) prices rolled over in August from July on largely stable upstream prices. Benzene and styrene spot prices traded within a narrow range during July. Asian EPS prices have slowly increased since 6 July, which could stem the tide on lower priced shipments to the US market in August. Several Asian EPS suppliers were offering material to US customers at levels lower than domestic prices. ICIS EPS prices were 90-98 cents/lb DEL US.

PVC SPOT EXPORT PRICES FALL ON TARIFFS

US export polyvinyl chloride (PVC) spot prices dropped sharply as US suppliers sought new sales outlets now that Turkey and China have largely dried up. Export prices were done at $805-820/tonne FOB US Gulf, down from $830-850/tonne for several weeks. Holiday season in Europe added to the slow business activity after US material was blocked by duties in Turkey and continued under serious tariff threat from China.