Europe feedstocks and petrochemicals weekly summary

LONDON (ICIS)–Here is a summary of major feedstocks and petrochemicals in Europe for the week ended 13 March.

Crude: Prices fell to a four-year low amid concerns about the impact of the coronavirus pandemic on global oil demand, and after Saudi Arabia cut its Official Selling Prices and said it would raise April crude supply when Russia failed to agree on further OPEC+ cuts.

*Afternoon trading

Naphtha: Outright values in the spot market nosedived following the collapse in upstream crude oil prices. The industry has been shaken by the price rout and exacerbated by the coronavirus epidemic at a time when consumption was down. The current uncertainty has limited any buying interest. Lower oil prices have fetched better margins for refineries likely to keep run rates healthy although cracker outages in the downstream petrochemicals market may add to the supply glut. The arbitrage window to the East has widened amid healthier demand from Asia. That said, sluggish gasoline demand and the increasing competitiveness of rival feedstock propane both harbour downsides.

Ethylene: Supply remains plentiful but low upstream values have allowed for exports to be fixed, alleviating some of the earlier pressures on suppliers. Domestic demand is better than expected as players take steps to mitigate any virus-led supply chain disruptions. Spot prices are notionally weaker amid no reported spot trade.

Propylene: Supply remains tight. Demand for volumes in April and May is high, but the March view is somewhat mixed as some buyers are postponing needs where possible in view of the declines in upstream prices, while others are taking steps to mitigate any worsening effects of the coronavirus outbreak on derivative supply chains by building stock. Spot prices are steady in thin trade. Imports and a cracker turnaround postponement might help ease balances a little in April.

Butadiene (BD): The market is fundamentally unchanged this week. Sources report a rather flat scenario in terms of supply and demand. There is good availability and demand ex-US is expected to help cushion against the weaker Asian market. Spot prices have fallen in very thin trade this week. All eyes are on naphtha developments as April contract reference price discussions will get under way in just over a week’s time.

Benzene: Spot prices have plummeted 18% since one week ago to an 11-year low in an unprecedented week of global market falls in response to the coronavirus pandemic. Decreases erased the gains made midweek after Monday’s crash, on the biggest one day drop in crude oil prices in three decades.

Styrene: Spot prices plunged to February 2009 levels, on significant losses in the oil market and on the impact of the coronavirus pandemic in an already fragile market. Despite this, spreads are decent and improved versus January. There were no trades for March, but April business was active in a profoundly volatile week.

Paraxylene (PX): Spot prices for have fallen to the lowest level since 2003, according to an ICIS calculation based on the influential Asian market. Supply is balanced amid mixed views on demand.

Orthoxylene (OX): A settlement for the March contract reference price has been heard but is yet to be fully confirmed. Supply is balanced to tight.