Americas top stories – weekly summary

HOUSTON (ICIS)–Here are some of the top stories from ICIS Americas for the week ended 4 February 2017.

US Feb MMA markets roiled by supply shortage
A force majeure, other supply issues and high feedstock costs have set the stage for a significant price increase this month. One producer, Evonik, has revised its February price increase and is said to be planning a minor turnaround sometime in April. Many customers have been frantically looking for MMA in the marketplace. A producer said, “I have not seen a supply shortage like this in years.”

Global chem shipping problem to persist for years
The too-many-ships problem is not going away anytime soon, at least for the chemical tanker fleet. London-based maritime consultant Drewry said that freight rates on long-haul routes will continue to be challenged by a surplus of large vessels over the next two years. The chemical fleet grew by 5.2% in 2016 and is expected to expand by 3.3% to the end of 2017.

INSIGHT: US floats idea of tax on Mexican imports
Recent talk about the US imposing taxes on Mexican imports may have a minor immediate effect on US petrochemical producers, although it could disrupt trade further in the future. The Trump administration talked about the tariff as one option to pay for a wall on the border between the US and Mexico – a centrepiece of the president’s electoral campaign.

Styrene prices surge on US Gulf plant problems
It is unclear how extended US Gulf styrene outages will impact downstream markets, but prices in all areas likely will be pressured higher as a result of a spike in feedstock prices. SABIC declared force majeure on Wednesday on the styrene it receives from a joint venture with Total Petrochemicals at the 1.1m tonne/year Cosmar facility in Carville, Louisiana.

Global surge, constrained supply drive US Feb BD to 5-year high
Strong overseas prices and tight domestic supply have led to significant increases in US butadiene (BD) contracts for February, pushing up prices to their highest levels in nearly five years. The February settlement leaves monthly prices at their highest since June 2012, when contracts were settled at 107 cents/lb for three individual producers and 115 cents/lb for another producer.

INSIGHT: A new era of economic acceleration amid political uncertainty?
Dow Chemical CEO Andrew Liveris has hardly been more bullish than on the company’s Q4 earnings conference call. Citing positive momentum in the US and global economies going into 2017, his comments contrast starkly with those about dealing with a “slow growth” world just a couple of years ago.

ACC applauds removal of US flaring regulations
The American Chemistry Council (ACC) commended the US House of Representatives on Friday for passing a resolution of disapproval against 2014 regulations on methane venting and flaring. The ACC also welcomed the reintroduction of the bipartisan Ozone Standards Implementation Act, which it said will help ensure that manufacturers that want to invest in the US are able to obtain regulatory permits in a timely and transparent manner.

Dakota Access a bright spot for Q2 – US Phillips 66
US Phillips 66 had what it described as a difficult operating environment during Q4 2016, but CEO Greg Garland had several optimistic outlooks during the company’s Friday earnings conference call. Those included the announcement that the Dakota Access pipeline should start operations in Q2 2017.

US MEK prices rise as hikes take hold
US methyl ethyl ketone (MEK) domestic and spot prices were assessed as higher on Friday, as market participants said recent price hikes separately proposed for January had been successful. Major suppliers Shell Chemical, ExxonMobil and Sasol Chemicals had separately nominated price increases of 3 cents/lb, to be implemented in mid-to-late January. The spot range also widened to reflect values heard in the market.

US acetone spot prices climb on tightness, RGP
US spot acetone prices were assessed higher on Friday, tracking continued market tightness and firming feedstock costs. A US buyer said a deal was recently done, though not its own, at 43 cents/lb FOB for a barge of acetone. However, the buyer said that price is no longer available, and a US producer agreed.

Phillips 66 moves startup date for US Gulf project
CP Chem’s ethane cracker project in Texas is expected to be complete in Q4 2017, according to Phillips 66’s Q4 2016 conference call on Friday. The company noted that two polyethylene derivative units in the Gulf Coast are on their mid-year target and in the commissioning phases, although their ethane cracker likely will not come online until Q1 2018.

LyondellBasell lists factors behind US, global BD surge
A fire at national rubber plantations, a heavy cracker turnaround season and a switch towards lighter feedstock have all contributed to the spike in butadiene prices, the CEO of LyondellBasell said. Several factors led to the price increase, said Bob Patel. Europe and Asia had a fairly heavy cracker maintenance season in the first and second quarters, he added.

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