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POLYMERS
Polyvinyl Chloride Global PP Prices
Europe 1500
($/mt)
The PVC market was seen close to finalising negotiations for CFR FE Asia
the March contract price. The final price is expected to be FD NWE
close to a rollover with the upside capped within a range of 1250 FAS Houston
Eur10-30/mt. Any buyer who has agreed an increase is
reported to have had there contract prices brought up in
1000
line with other buyers rather than a general increase applied
to all buyers. “Those buyers that were at the bottom of the
range for February have been brought up in line with other 750
buyers,” a source at one producer noted. Other sources
noted that the month started with strong claims from
producers that they would be looking for increases upwards 500
16-Oct 11-Nov 04-Dec 02-Jan 29-Jan 23-Feb 18-Mar
of Eur50/mt but the reality has been somewhat different in
trying to achieve these increases. The lack of demand across
Europe has severely undermined the ability for buyers to Foreign exchange
absorb any increase in PVC prices. Although demand in Eur1 to $ 1.3113 £1 to Eur 1.0662
March was reported to have improved compared with
February, the overall level of consumption was still seen as Polymer Spot Freight Rates ex-Middle East ($/mt)
below year-ago levels. As producers have been unable to
From: Middle East Middle East
implement hoped-for increases, they are faced with a To: 25-100 mt >100mt
difficult situation going forward. In February, feedstocks East China 15-20 15-18
South China 15-18 10-15
prices in the form of the monthly ethylene contract price India 23-25 20-23
increased by Eur95/mt to currently stand at Eur675/mt. In Southeast Asia 20-22 18-20
contrast, PVC prices have fallen from Eur885/mt at the start NW Europe 80-90 80-90
Turkey 100-110 100-110
of 2009 to currently stand at Eur705/mt, a fall of over US Gulf 75-80 70-75
Eur150/mt. The fall in PVC prices combined with the rise in Latin America 85-90 80-85
feedstocks costs amounts to a reversal of Eur280/mt for PVC Notes: Please refer to the methodology guide for details on port locations.
between 50,000-60,000 mt of PVC land on its shores exports rose 7.1%. according to data from Japanese Vinyl
between February and March. As well, direct producer deals Environmental Council officials. On the production side,
were attributed with dragging prices lower as one major Shanghai Chlor-Alkali Chemical’s 410,000 mt/year PVC
producer was heard to be aggressively pursuing market share plant in Shanghai will undergo a three-week turnaround in
and pricing out traders in the process. Sources reported that May. Hanwha’s 225,000 mt/year PVC plant in Yeosu, South
the producer was offering into Latin America at $610/mt Korea, will start a one week planned turnaround next week.
CIF, a number that would produce a netback of near $520- While, Japan’s Taiyo Vinyl is in the middle of a planned
530/mt FAS Houston. “We just cannot compete against the turnaround at its 310,000 mt/year PVC plant in Yokkaichi.
direct producer deals,” said a participant. Meanwhile, on the The plant will restart March 24.
domestic front, producers were still working to push
through a 2 cents/lb price hike on domestic contracts.
Producers initially announced a 5 cents/lb increase for Low Density Polyethylene
February, however, ultimately took 3 cents and pushed the
remaining 2 cents/lb back to March. Additionally, most Europe
producers had announced a 3 cents/lb increase for April. Demand in the spot market has flattened out further, trading
Buyers were bearish on the increase, however, given sources said this week, with spot prices remaining stable at
persistently weak domestic demand. In production news, Eur830-840/mt FD NWE. Some further attempts to increase
Georgia Gulf confirmed that its production at both Lake spot prices to Eur850-890/mt FD NWE levels had been made
Charles, Louisiana and Aberdeen, Mississippi was up and by traders, though with limited success, market sources said.
running. As well, the company has changed the terms of “We have very poor sales and it is very difficult to get prices
one if its credit facilities, pushing back covenants with its to Eur850 and above, as there are still sales done at Eur830-
lenders until March 2010 while increasing and extending its 840/mt FD NWE range,” a large-volume trader said. A trader
accounts receivable securitization until March 2011, the reported a spot deal at Eur825/mt FD Benelux, while another
company announced earlier this week. reported transacting at Eur850/mt FD Spain. Some traders
noted early attempts by converters to de-stock as the end-
Asia user demand deteriorated in March. Converters reported
April Chinese imported PVC prices were flat this week. prompt-focused business, impacted by short lead times on
Offers between $660-700/mt CFR China were reported, and orders. “It is very difficult to pass the increases to the end-
down to $650/mt CFR China was heard, but unconfirmed. user markets, we are all suffering now. Our chances of
Some buyers were still holding back and looking for a recovering the increases are close to zero. While our
number below $650/mt CFR China. Deals were reported utilization rates are weak every converter is seeking
done between $660-690/mt CFR China. A Korean producer volumes—it is very competitive for orders,” one converter
reported selling 6,000 mt of PVC at $690/mt CIF China for said. “Every converter is eating in to his own [already very
delivery end March/early April, and 10,000 mt for delivery thin] margin...as a result converters are careful with their
into Shanghai in April at $690/mt CIF China. An Indian stocks, as the orders are very slow,” another converter said.
trader reported selling 200mt at $700/mt CFR China, While some converters hoped to see a more favorable
Indonesian-origin, delivery March. A Taiwanese supplier environment in April, others expected to see another last
offered and traded April-delivery cargoes at $660/mt CFR rally in prices, before market starts to see new alternative
China. The difference in traded prices was due to supplies in the market in May. Producers, on the other hand,
antidumping rates between Taiwan and Korea, for delivery were looking to recover dents in their margins further in
into China. Overall demand remained weak into China, April, with one stating “Eur10-20/mt increase in April is not
with transaction volumes into China below levels for the enough, we need another substantial increase in April or we
same period in 2008. Domestic Chinese prices firmed trim operational rates further. It is better to shut production
slightly this week, at around RNB 100-200. Carbide-based than to lose money on every tonne supplied,” he said. Other
production prices were heard between Yuan 6000-6200/mt producers said that if demand eroded in April, they would
delivered China, while ethylene-based production was Yuan focus on exports once again in a bid to achieve better
6200-6400/mt delivered China. Sources estimated that netbacks. “Our customers think that prices will fall, but
current carbide production in China is on average at 45- demand for us is still relatively strong. April is going to be a
60% rates. Domestic prices increased following the loss of crossroad,” another producer said. “We are hardening our
benefits offered by the Chinese government for carbide position now, we had to move more aggressively on the
production the first two-and-a-half months of the year prices for extra volumes requested in the second half of
expired. In India demand remained good, offers from March,” a fourth producer said. Gross values reported this
Taiwan and Korea were heard at $730/mt CFR India. From were range-bound. Three producers confirmed contractual
Europe the offers were $700/mt CFR India and the offer level business at Eur890-900/mt FD NWE, while two producers
was below $700/mt CFR India from the US. Meanwhile, reported business at Eur900-920/mt FD NWE. Converters
Japanese PVC exports were strong in February, rising 2.8% reported a wide range of Eur850-910/mt FD NWE for their
year on the year to 53,961 mt. On a month-on-month basis, March contracts. Gross values remained stable at Eur890-
900/mt FD NWE this week. In production news, were concluded broadly within the range of $980-990/mt
LyondellBasell is set to shut its 320,000 mt/year LDPE plant CFR FEA and SEA, but the majority of producers would only
at Aubette, France from March 24 for a week, a company begin offering April shipments in the next week therefore
source said Friday. “We believe that it is important to keep a discussions were still a tad quiet.
close control on stock levels to support a further price
initiative in April,” the source said. SABIC is set to shut its Latin America
120,000 mt/year LDPE autoclave unit at Geleen, the One major Brazilian export to the Mercosur reported lower
Netherlands, a company source said Monday. “The autoclave offer prices this week matching other suplliers. Buyers
production is a very expensive and unsustainable process confirmed deals at $1,180/mt FOT for LDPE. In the Mexican
and that is why we have take a decision to shut our domestic market, LDPE price was heard at 45-48 cents/lb
autoclave plant at Geleen,” he said, adding: “We have other after the 10% increase reported in the first week of March.
substitute products available for our customers...The date of The adjustment was realized due to the dollar vs peso
the closure has not yet been set,” he said. SABIC Europe is exchange rate and also due to international pricing
also set to have its first LDPE available out of its new tendencies. “We have kept sales volumes as programmed for
400,000 mt/year tubular plant at Wilton, UK, in May, the this month even though we had heard of the existence of
source said, with the plant due to start up at the end of Q1 cheaper imported offers. The contracts we have help us
2009, he said. maintain stable prices,” said a source. In the Peruvian
domestic market, participants were reselling LDPE at
United States $1,250/mt industrial. Offers from the US to Peru were at
Low density prices decreased steadily over the week by a $1,160/mt CFR film and industrial, while offers coming
total of 5 cents/lb following lower feedstocks. Westlake was from Korea were at $1,100/mt CFR film. In the Colombian
heard to have offered low density at 42 cents/lb FAS domestic market, LDPE was being offered at Pesos 3,396/kg
Houston but even at that number some traders said demand bulk and at Pesos 3,466-3,646/kg bagged. LDPE was being
was poor. “I just don’t see much demand for LD right now sold in the Brazilian domestic market at Reals 3,550/mt CIF
(in Latin America),” a trader said, despite the lower offer. for film and industrial grades for medium volumes and at
There also was not much interest in US LD from Asia where Reals 3,600/mt CIF for small volumes.
agricultural seasonal demand was absent. Export buyers
expected lower offers going forward considering spot
ethylene was about 22-23 cents/lb FD USG. Also, producers Linear Low Density Polyethylene
Dow and Westlake were heard to be starting up steam
crackers in the near term that would both put pressure on Europe
spot monomer and lengthen LD supply. March supply was European spot values for LLDPE C4 have peaked, some
still somewhat tight, sources said, and for this reason the trading source said, adding that they were struggling in
domestic 5 cents/lb price increase had not been rescinded. implementing substantially higher prices. “We are trying to
Sources said that while the month’s HDPE increase was most achieve Eur810-830/mt FD NWE but it is not easy, especially
likely a failure, for LD and LL the increase still had legs. If when we are competing with imports present in the
part or all of the increase takes hold, backward integrated to market,” a large-volume trader said. “The market is quiet
ethane producers would see margins widen as ethane values now, there is definitely less energy in the market, people
have fallen 4 cents/gal to 31-31.5 cents/gal from a week ago. seem to be sedated,” a second trader said. “Some new
players have started the pre-marketing now. I would say that
Asia out of all polyethylene grades LLDPE C4 now is most under
Asian low density polyethylene prices increased $10/mt on a pressure on the spot market, we are trading at Eur780-
week-on-week basis, attributed to constricted supplies from 800/mt FD NWE now and you can not get higher prices,”
the Chinese mainland that saw domestic prices ascending another trader said. Some converters have confirmed
Yuan 300/mt to Yuan 8,700-8,800/mt on an ex-works basis. trialling pre-marketed product ex-Middle East. “We have
The market knee-jerked to the shutdown of Shanghai Secco’s sold at Eur770-780/mt FD NWE this week,” a third trader
steam cracker and its downstream 650,000 mt/year PE unit, said. “We feel that we have already seen the best days of the
in light of upcoming turnarounds at some of Sinopec’s year, however having said that oil has been recently moving
subsidary companies in April. LDPE prices were the slowest up and the world as we know it today may reshape itself
among all the PE grades to react to the bullish sentiment, very quickly; we are holding our horses now,” he added.
market sources said, and more clearly defined in East China “Some people have started to buy for April now for week 14-
than South China. Industry observers said that South 15 delivery, maybe prices will have one last rally before the
Chinese end-users were more dependant on actual demand Easter,” the second trader said. In addition, some traders
because their businesses hinged strongly on re-exports. The hoped the recent surge in Asian prices would boost
lowest offer heard was placed by QAPCO at $985/mt CFR European market sentiment. Asian LLDPE prices surged by
China, L/C at sight basis, to which the company sold out its $15-25/mt this week, impacted by tightening supplies.
daily availability, a company source said. Meanwhile, trades SABIC will have less PE spot supply after shutting its 890,000
Latin America willing to pay more.” In Russia this week, prices continued to
Brazilian HDPE producers expressed concern that a potential hold steady as sources described demand as stable. One supplier
increase in ethylene prices would result in higher said he was did not expect any price increases until around April
polyethylene prices and in turn, stifle demand and compress time, adding that he was still exporting material to Asia, but in
margins, sources said. Buyer deals in the Mercosur were smaller lots due to drop in prices and demand seen in China
heard at the same levels this week and one major Brazilian recently in Asia. Prices were pegged at Eur540-550/mt CFR St
producer lower price offer for the resin. March ethylene Petersburg. In the UK, contract prices were assessed steady, as
prices in Brazil were talked this week at $760/mt FOB buyers and sellers said that contract numbers continued to hold
however a 15% increase in European ethylene values could parity with European contract prices when applying an average
push ethylene prices up despite an expected lower contract. of the month GBP/Eur exchange rate. In Turkey, demand was
Ethylene prices follow ethylene contract prices in Europe described by sources to still be depressed in general, one trader
and the US with a month lag. March HDPE was sold in the said though he had seen “some good inquiries for small parcels
Brazilian market at Reals 3,900/mt CIF for blow molding and recently.” He explained he had seen ex-Turkmenistan offers of
injection for small volumes, Reals 3,800/mt CIF blow $850/mt CPT Istanbul plus 6.5%, equating to $895/mt CFR
molding and injection for medium volumes and at Reals Turkey. Adding that due to the poor state of demand, any
3,600-3,700/mt CIF for the same grades for large volumes. increase in offer levels was only driven by recent exports to Asia
that have also gradually reduced in activity.
$870-880/mt CFR, $900-910/mt for IPP film, but had hiked slight increase, I think prices could fall further. [But] if there are
offers to $900/mt and above levels by Wednesday. Korean further PS production cuts, it could be [possible] to see an
producers reported selling $900/mt for homo/injection, $930- increase in prices,” the converter said. Most producers said
940/mt for block copol, $910-920/mt for BOPP, and current pegged the GPPS-HIPS spread at no less than Eur50/mt, while
offers were $10-20/mt higher from deal done levels. Taiwanese another said that pressure from polybutadiene prices had led to
producers sold PP homo at $900/mt, $930-950/mt for IPP film, some spreads agreed as low as Eur40/mt. Polystyrene production
$935/mt for BOPP and around $930/mt for block copol. capacity was oversupplied by around 700,000 mt/year, a number
According to sources, BOPP, injection and block copol were of producers and converters agreed. Sources point to industry
seeing the best demand. BOPP because of high operations at 2008 production estimates of around 2.5-3 million mt/year,
downstream factories, injection buoyed by strong demand in while actual demand was thought to be around 2.2-2.3 million,
South China and block copol on short supply. Southeast Asian including exports, sources said. One producer pointed to “a
prices were lifted in tandem with China, but price indications recession factor of 250,000 mt/year”. This was the amount of
were few and far between as Southeast Asian producers had capacity cut due to the economic downturn. Last week Total said
sold out of March material and were offering April shipments it would permanently shut one of its two lines at its Gonfreville,
only in the coming week. In South Asia, trade was thin as France site. Although the company would not comment on the
participants were expecting product from Reliance’s new specific capacity to be shut or the total site capacity, one source
Jamnagar plant to be available in the market soon in April. estimated the high impact PS line was producing around 60,000
mt/year, from a total production at the site of around 120,000
Latin America mt/year. Both producers and converters agreed that capacities
Prices failed to move this week as distributors in the needed to be cut or a degree of consolidation would be on the
Mercosur reported buying and selling at static levels, before cards. “The European market needs more consolidation. There is
April announcements. Buyers confirmed prices at $990/mt a constant innovation in these sectors, meaning less plastics (in
for co-polymer and at $890/mt for homo. Domestic PP some applications),” a producer said. “More capacity shutdowns
prices in Argentina were set to rise following a $30/mt, are coming and this has to be done [to aid recovery].” Sources
March price increase announcement by one producer. It was said that the smaller units should disappear due to their
not immediately clear whether other producers would inefficiency. “Closures are all that’s left. A 60,000 mt plant is not
follow. “We expected a better demand for March but world scale, and they will continue to underperform,” a producer
probably we are going to be with the same volumes we saw said. In EPS, a producer said it expected to settle its March
last month,” said the souce. Following the increase, PP was contracts at a rollover but was still pushing for an increase of
being offered in the domestic Argentinean market at $1,050- around Eur10-20/mt in March. Sentiment continued to be
1,080/mt CIF raffia, $1,060-1,090/mt CIF injection, $1,030- weighed by lackluster demand and still little improvement in
1,100/mt CIF random, $1,100/mt CIF co-polymer impact construction. In production news, BASF started up a new 90,000
and at $1,300-1,400/mt CIF special resins. Meanwhile, in the mt/year expandable PS unit at its Ludwigshafen, Germany unit
Brazilian domestic market, PP prices for March were down last week, the company said. Also, Sunpor last week shut down
Reals 200/mt compared to the previous month, sources said. its 70,000 mt/year unit in Polten, Austria, for a scheduled
turnaround, company sources said.
the domestic market in China shot up Yuan 500/mt more on the be an additional 20-30kt more PX hitting the spot market in a
week to Yuan 10,800-11,500/mt ex-works (for low- to high-end month. In the spot PET market values were reported to have
material). The supply situation for March was still one of fallen to Eur850-870/mt FD NWE on the back of cheaper priced
“shortage,” a producer in Ningbo said. ABS plants in China were imports from Asia. The availability of cheaper imports was also
working overtime to meet domestic requirements. “We hope reported to be limiting any upside in contract negotiations.
there are no plant outages, since we will not be able to meet the
additional requirements of the market,” a producer said. Demand US
from the home appliance sector was good, while demand from PET contracts were talked up 2 cents/lb for March but were not
the electronics and automobile sector was lagging behind, sources yet completely settled. The increase would be a far cry from
said. In market news, BASF’s SM unit in Ulsan, South Korea, is still the initial 7 cents/lb nomination but would still allow for a
offline, while its polystyrene and ABS units also at Ulsan were margin increase for producers. Costs were down about 0.3
operating normally, estimated around 80-100%. Japan’s Techno cents/lb following the lower PX CP and rollover of MEG
polymer is currently running its ABS unit at 70% of its nameplate contracts. A 2 cents/lb price hike would put prices just over 55
capacity of 250,000 mt/year, a company source said Friday. cents/lb. Demand had not taken off as it typically does before
the summer beverage season, sources said. There were no April
increases issued yet but a producer said if March finishes up 2
Polyethylene Terephthalate cents/lb, the other 5 cents/lb would be pushed to April to
guard against any sudden jump in feedstock prices. MEG
Europe contracts are already slated to drop about 3 cents/lb in April
In southern Europe an increase of Eur80/mt was reported on the but spot PX values have held steady. The import market had
March contract price, short of the Eur100/mt increase sought by slowed considerably, traders said. “I haven’t even gotten any
producers, but above the estimate pass through cost of higher offers from Asia lately,” an importer said. Duty-free resin was
feedstock prices. There was still no clear settlement on the heard sold at 53 cents/lb delivered to West Coast customers for
Northwest European monoethylene glycol March contract. The April arrival. From China and Korea, offers were at a similar
initial settlement for MEG of Eur495/mt FD NWE, which is level but deals were few. The import offer was under the
Eur15/mt higher than the February CP of Eur480/mt. The domestic price but many buyers did not want to take the
increase in paraxylene and prices and MEG contract prices would chance on imports as domestic prices could easily decrease in
equate to an increase of approximately Eur54/mt in PET prices. If April or May to at, or under current import offers. “Demand is
both second initial settlements for PX and MEG were to be so poor, it would not surprise me to see April prices decrease
followed, at increases of Eur85/mt and Eur15/mt respectively and domestically,” a supplier said.
thus officially settled, this would equate to around a Eur54/mt
increase in PET terms. Spanish producers reported an increase of Asia
Eur80-85/mt on the March CPs. Demand in Spain was reported Bottle grade polyethylene terephthalate continued to
to be relatively healthy in January and February, with one weaken this week, despite feedstock purified terephthalic
producer reporting demand for February as being as good as acid surging. PET was assessed $5 lower to $935/mt FOB
2008 levels. The better than expected demand in the early part of Northeast Asia/Southeast Asia going into the second month
the year, combined with a reduction in production rates, helped of its peak demand season in the northern hemisphere.
producers to manage supply and demand and pass through an Exports to Eastern Europe, the EU and Russia have fallen,
increase. Other producers have reported similar increases in CPs and some PET manufacturers are seeing their orders being
for March although one producer reported settling his March slashed by half compared to the same time last year.
contract at Eur890-900/mt. Looking forward, to negotiations for “Demand in Eastern Europe and Russia is down sharply
April, the likelihood of another increase would be difficult to because their currencies have weakened against the US
implement according to one producer. “On the one hand we dollar,” an industry source said. “These countries also have
have rising feedstock prices, but on the other side volumes for difficulties opening letters of credit.” Bids from Latin
March were not good-no a lot of products was drawn down, so it America were said to be only around $860/mt FOB as the
would be difficult to pass through another increase,” a source at a region was still holding quite a lot of inventory. A trader
producer said. Stock levels at some producers were also reported said his exports to the EU for March were lower than for
to be high relatively high in anticipation of an upturn in January and February — a sign that the global economy is
demand relative to January and February. Other factors that deepening, despite what politicians are saying to the contrary.
could erode margins for PET producers are higher PTA prices. PTA For the week, PTA rose $27.50 since Thursday to $730/mt CFR
was looking increasingly tight due to the continuing problems at China on Wednesday. Traders said the surge is because of
Artenius’ PTA production plant at Wilton, Northeast England, tight supply as many producers are building inventory in
which is still shutdown. There were further reports that Artenius preparation for a shutdown by a few South Korean producers
could extend the force majeure beyond March, athough a in April. Monoethylene glycol, however, has been relatively
company source declined to comment. On the positive side the stable, at $442/mt CFR China due to excess supply. A PET
shutdown of the PTA plant would mean there should be an producer said: “There’s lots of MEG sitting around in China
increase in PX availability. One trader estimated that there could that no one is buying. There’s just too much MEG.”
Asia ($/mt)
Monthly Contract Price (Mar): 675-675 FD NWE (Eur/mt)
Quarterly Contract Price (Q1): NA-NA FD NWE (Eur/mt) Spot Friday Weekly Average
CFR China 439-441 439.0-441.2
US (¢/lb) CFR Taiwan 439-441 –
Spot Friday Weekly Average CFR SE Asia 439-441 (1) –
FD USG 23.000-23.250 25.400-25.625
Average Monthly Contract Price (Apr) – CFR Asia:613
Posted Contract Price (Mar ): NA-NA Delivered MEG CP Nomination (Mar) – CFR Asia: 560-560
Net Contract Price (Mar ): NA-NA Delivered (1) CFR SE Asia = CFR Indonesia.Note: *A/F denotes anti-freeze grade Asian ethylene glycol
assessments are basis L/C 90 days.
Asia ($/mt)
Spot Friday Weekly Average Polymer Feedstocks – Butadiene
FOB Korea 605-610 –
CFR SE Asia 610-620 602.8-611.2 Europe
CFR NE Asia 635-640 632.4-639.6 Spot Friday
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand. FD NWE (Eur/mt) 343-347
FOB Rdam ($/mt) 302-307
Polymer Feedstocks – Propylene
Quaterly Contract Price (Q1) 600-600 (Eur/mt)
Europe (Eur/mt) Ineos Olefins Monthly Contract Price Ex-Works:425-425 (Eur/mt)
Poly Grade Spot Friday Weekly Average US (¢/lb)
FD NWE 425-435 433.0-443.0
CIF NWE 425-435 425.0-435.0 Spot Friday
CIF USG 15.00-17.00
Chem Grade Spot Friday Weekly Average
FD NWE 390-400 –
Monthly Contract Price (Apr ) 25-25
CIF NWE 380-390 –
Asia ($/mt)
Poly Grade Monthly Contract Price (Mar): 497-497
Spot Friday
Poly Grade Quarterly Contract Price (Q1): NA-NA
FOB Korea 495-505
US (¢/lb) CFR Taiwan 525-535
CFR SE Asia 560-570 (1)
Spot Friday Weekly Average
FOB Japan 475-485
dlvd USG dlvd USG
CFR China 530-540
Ref Grade 19.750-20.000 21.500-21.850
Poly Grade 24.375-24.500 – (1) CFR SE Asia = CFR Indonesia. *A/F denotes anti-freeze grade.
Chem Grade 21.875-22.000 –
Poly Grade Contract Price (Mar ): NA-NA Delivered Platts Global Ethylene Prices ($/mt)
Chem Grade Contract Price (Mar ): NA-NA Delivered
($/mt)
Asia ($/mt)
1150
Spot Friday Weekly Average CFR NE Asia
FOB Korea 694-696 678.0-680.0
960 CIF NWE Ethylene
CFR Taiwan 754-756 –
Spot Ethylene FD USGC
CFR SE Asia 814-816 –
FOB Japan 684-686 – 770
CFR China 754-756 –
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand.
580
Polymer Feedstocks – Ethylene Glycol Assessments
390
Europe
Spot Friday
200
FD NWE T2 (Eur/mt) 410-430
16-Oct 11-Nov 04-Dec 02-Jan 29-Jan 23-Feb 18-Mar
CIF NWE T2 ($/mt) 529-554
Monthly Contract Price (MAR ) – (Eur/mt) NA-NA Notes: All olefin prices reflect assessments at close of previous Friday.
was in increase of 5% over February and caused by a monetary two initial settlements being done. A second initial
exchange fluctuation. PEMEX was preparing the next ethylene settlement was confirmed done at Eur495/mt FD NWE
export for the 21st of March for a total of 4,500 metric tons, Wednesday, a source from the involved producer said. The
probably to Asia. “Our biggest ethylene client that would price is Eur35/mt lower than the first initial settlement of
normally buy 3,500 metric tons per month closed down, and Eur530/mt done at the end of February, and Eur15/mt
now we will begin trying to export this excess product every higher than the February CP of Eur480/mt. For a NWE MEG
month,” said a source. PEMEX’s plants were reported to be contract to be officially settled, four independent parties
working at 80% capacity this month with the Cangrejera and must agree over the price. While buyers were eager to follow
Morelos plants producing 1,650 tons of ethylene daily, while the the second settlement, producers were unwilling to settle at
Pajaritos plant was producing 380 tons per day. Ethylene contract such a reduced price, as one producer said: “I will not
prices in the Brazilian domestic market were reported with an follow. The price is too low and is not at all representative of
increase of 10% for March over last month’s prices. Prices were the current market conditions.” The converse was true of
heard at $760/mt FOB and in local currency at Reals 1,800/mt the first settlemen, with buyers unwilling to settle at a
FOB. Ethylene prices in the Brazilian domestic market follows the higher price. With the back end of March quickly
international movements on monthly ethylene contract prices in approaching, buyers suggested if neither settlements was
Europe and the US with a month lag. followed by end-of next week a combined March/April
settlement could arise. “While I would immediately follow
Asia the second settlement, I don’t believe it will be followed as
NEA: An unplanned naphtha-fed steam cracker outage at Shanghai the other producers are very reluctant to settle at such a
Seccoprompted buying of FOB Korea spot ethylene cargoes by lower price. What I see happening is a combined settlement
traders, which pushed the FOB Korea benchmark values up by for March and April as there is such a big gap between both
$12.5/mt on the week. Secco's 900,000 mt/year sole cracker was initial settlements,” a buyer said, with another calling such a
shut over last weekend due to a technical problem, triggering settlement “a definite possibility”. However, a March CP
supply crunch concerns in the region for prompt end-March settlement was not completely lost, with some sellers further
loading. Two spot ethylene cargoes were reported to have been sold suggesting both parties meet midway and settle at Eur510-
between $600-610/mt FOB Korea for end-March loading. A bid for 515/mt FD NWE. Direction from Asia pointed to a
a spot cargo was heard at $600/mt FOB Korea for end-March downward slope in CPs for April, with the first nominations
loading, Korean producers countered at $620-630/mt FOB Korea, announced $50/mt lower at $560/mt CFR Asia. Asia was
but such demand was for prompt loading only, with April-loading continuing to play an important role in the European March
bids widely lower at $570-580/mt FOB Korea. On the other hand, contract negotiations, with buyers pointing out Asia settling
the week-on-week price increase on a CFR NEA basis was rather at a rollover for March contracts and also the recent price
limited at $2.5/mt. End-users buying appetite for April delivery was drops in the Asian spot market. In further news, producers
still weak in the region, with bids widely reported between $620- were unfazed by Saudi Arabia’s Rabigh Refining and
630/mt CFR Taiwan/China for April delivery. An offer at $650/mt Petrochemical Co’s (PetroRabigh), recent announcement it
CFR Taiwan for April was widely rejected this week. End-users were would sell all its MEG in Asia and Europe based on term
still reluctant to build their ethylene inventories this week, contracts. “It’s difficult to say exactly how it will affect the
following a successful restart of Formosa's 600,000 mt/year No. 1 European contract market but I think everyone, regardless of
cracker late Thursday. SEA: Prices basis CFR SE Asia rose $10/mt, whether they are based in Europe or not, has to sell at the
reflecting tight supplies in the region. Regional supplies have been market price,” a producer said. PetroRabigh, a joint venture
tight, while the influx from the Middle East was also limited. This between state-owned Saudi Aramco and Japan’s Sumitomo
week, two cargoes (total quantity 4,500 mt) were offered from Iran, Chemical, was scheduled to make its first deliveries of MEG
the first offer from the country in March. The two cargoes were from its 600,000 mt/year plant at Rabigh at the end of
reported to have been sold this week between $610-620/mt CFR March. But due to the delay of the start up its ethane-based
Thailand for end-March/H1-April delivery. End-users in Indonesia, steam cracker, the start up of its MEG plant has been pushed
however, did not chase the prices, with buying indications for H2- back to the first week of April. Meanwhile, on the spot
April delivery maintained at or below $600/mt CFR Indonesia. market prices truck prices remained relatively stable this
Indonesia's main spot ethylene buyers were vinyls producers, who week with the higher end edging up just Eur5/mt. While
were not in hurry to buy spot cargoes as their plants have been deals were reported done as high as Eur450-470/mt FD NWE
running below full capacity. Selling indications were reported at and Antwerp for March delivery, trades were again also
$630/mt CFR SE Asia for any-April delivery. reported at lower levels of Eur410/mt FD NWE, March
delivery. In bulk, the market was subdued this week with no
reported bulk business done. However, sources suggested
Ethylene Glycol prices were likely to fall next week as cheaper Iranian
material was scheduled to hit Europe. “While the market has
Europe been very, very quiet this week and over the last three weeks
There was no finalization on the Northwest European in fact, let me just say this is about to change as there will
monoethylene glycol March contract price this week despite be some large import volumes coming into the market next
week,” a source said. According to Platts data, the last time the same capacity has been mainly used to make derivatives
Iranian material was sold in Europe—at the beginning of that go into detergent. Its MEG output has been consumed
January—bulk spot prices fell by over $65/mt. captively at its own polyester plant. Supply of spot cargoes
from SABIC and SHARQ has been ample such that
United States PetroRabigh’s delayed start-up of its MEG plant to the first
The spot export and import markets were quiet. Exports to Asia week of April, as it was trying to start up its cracker for the
were not happening as it would require US prices well under 20 fourth time, has had little impact. India remained the only
cents/lb FOB. Participants wondered if spot exports would ever bright spot in Asia with domestic supply relatively tight and
get going again considering the world-scale plants set to come polyester plants running fully, though some were citing fewer
online in the Middle East and the change in trade flows those fresh orders. Separately, sources said Shell announced its ACP
plants would cause. US MEG length traditionally went to Asia for April at $560/mt CFR, down $50/mt.
but the new units in the Middle East were thought to be able to
satisfy most of that demand, which could lead to a reduction of
production in North America. Another impact of the new Propylene
capacities could be a developing import market but there were
import duties and logistic barriers that might keep imports at Europe
bay. There was an import offer earlier in the week at 22-23 Spot free polymer grade propylene on a FD NWE and CIF
cents/lb CFR Houston but there was no interest. “If (the offer) NWE basis were assessed in alignment with one another at a
began with 1 it would be taken out immediately,” a source said. mid-point of Eur430/mt this week, following a number of
With end-users not even taking contract minimums, they would trades reported done. A German producer said Friday, that he
not be able to take spot material which left traders or a producer had sold a 300mt spot parcel earlier in the week at Eur435/mt
as an import target. Traders, however, risked being undercut by FD NWE for April delivery. Later Friday, a Northwest European
producers on price if they tried to move MEG below current trader indicated traded polymer grade levels in the range of
market prices. And producers would not need to import given Eur430-435/mt CIF NWE, but was unable to officially confirm
the sorry state of demand. The PET market had yet to take off for price or counterparty details. An integrated market participant
what’s normally its peak demand period in early spring and the said he had purchased polymer grade at Eur430/mt FD NWE
anti-freeze market was also said to be soft on buying interest. for but could not confirm counterparty details, but added he
Domestic railcars were heard selling for 26 cents/lb for some mid- had seen a number of sellers offering in this range. One buyer
size buyers but contracts to larger volume polyester customers said he had done spot business the week before at Eur400/mt
were at least 2 cents/lb lower. “At this point we just hope to be FD NWE and Eur450/mt FD NWE, either side of the Platts
one of the survivors of the current (economic) mess,” a producer assessed range, while another source said she had been offered
said regarding the state of his industry. material at Eur460-470 this week but had “no spot buying
interest—you won’t see us on the spot market to sell or buy.”
Asia Chem grade levels were assessed steady as trading evidence
Monoethylene glycol in Asia stayed largely stable this week, was said to be thin, and prices pegged as stable. Generally
steadying on end-users buying on the belief that prices have speaking, source described the market as balanced this week,
touched bottom, and late-week crude strength. But bursting with most crackers still running at reduced rates. With the
inventories in eastern China and the impending start-up of second-quarter looming, the topic of quarterly versus monthly
two new capacities in Saudi Arabia applied downward contract price structure has become a subject of consideration.
pressure on prices. Though some polyester makers still Most sources said it was too early to be making speculative
actively sought bargains with bids at below $430/mt CFR target levels for April or Q2. However, sustained cracker run
China, Friday saw deals done at $440/mt. Negative margins rate reductions combined with cheaper prices in alternative
for naphtha-based producers were causing them to keep feedstock LPG, meant that due to falling demand, a big change
capacities idle. Taiwan’s Nan Ya Plastics has no plans to restart was seen in naphtha prices, according to sources late this
its No. 1 line after it was shut March 3 following an explosion week. A flattening out of the forward naphtha curve was
at Formosa Petrochemical’s No. 1 steam cracker, even after the described by sources during the week, leading to a contango
cracker’s restart Thursday night. Its only operating line was structure evident both in swap and the physical naphtha
the No. 4 (700,000 mt/year). State-run CPC Corp’s plans to market. As one propylene buyer explained, “There is still a big
shut its No. 3 cracker March 18 due to poor margins, and uncertainty in underlying demand. Naphtha will be a huge
hence cut 15% of ethylene supplies to Oriental Union driver on the April contract price. February and March contract
Chemical Corp and China Man-Made Fiber Corp would have levels included a pass through on naphtha. It really depends
little impact on MEG. OUCC’s 250,000 mt/year plant in Lin where naphtha is at closer to the time of settlement. But any
Yuan has been running at 60-70% and has been thriving increase in propylene contract values without an increase seen
partly on imported ethylene, but it may reduce its output of in crude or naphtha wouldn’t be justified.” Downstream in
MEG. CMFC, meanwhile, has been operating its 75,000 polypropylene, March monthly contract price settlements
mt/year No. 1 line in Kaohsiung intermittently due to weak continued to only show a pass through of up to Eur30/mt
margins, while ethylene oxide output from its No. 2 line of versus Platts assessed February values. Buyers said they were
choosing to wait and see developments in demand levels No 1 and No 3 steam crackers. These plant issues prompted
before deciding what increase they were prepared to accept as traders to clamor for propylene cargoes Friday. LG Chem
a monomer price pass through. claimed to have sold an any-April cargo at $700/mt FOB Korea
to an unidentified Western trading firm. The deal could not be
United States confirmed. Korean and Western trading companies said they
One producer confirmed settling March PGP contracts up 1 were prepared to pay $680-690/mt FOB Korea for April cargoes.
cent/lb at 29 cents/lb. March CGP settlements were a bit Nippon Oil sold an April cargo on Wednesday at $730/mt CFR
more cloudy due to a split settlement. Initially, Shell had Taiwan to a Japanese trader. By Friday, selling interest to China
settled March with some of its customers up 2 cents/lb, a and Taiwan had climbed to $760-770/mt CFR China (L/C at
buyer told Platts. Consequently Lyondell and ExxonMobil sight), while buying interest generally did not pass $740/mt. A
were heard to have settled up one cent/lb however few consumers said they would draw the line at $720/mt CFR
confirmation was unavailable at time of press. “It’s likely a China. There remained a propylene shortage in SE Asia, with
split settlement at 1-2 cents up,” said one participant. production down in Indonesia and the Philippines. Indonesia’s
Meanwhile, spot propylene prices moved down as activity PP producers have cut runs rather than import cargoes. A ship
continued to be slow this week. Arbitrage opportunities to shortage raised the cost of freight, also inflating propylene offers
Europe and Asia were closed and domestic appetite for into SE Asia. On Friday, it would have cost about $120/mt to
material thinned. RGP started the week off at just over 23 ship a 1,500 mt propylene cargo from South Korea to Indonesia.
cents/lb MtB pipe and gradually edged down throughout the Downstream, the outlook for PP and other derivatives was soft.
week. Tuesday March RGP was offered at 23 cents/lb MtB The raffia and injection grade PP market closed Friday at
pipe however buyers were absent and no confirmed trades $870/mt CFR China, up $20/mt from a week ago. Although the
were heard at market close. March RGP prices fell further general outlook for PP was soft, prices momentarily found
mid-week when a deal was heard done after close of support too from Secco and Formosa’s production woes. In the
assessment at 20 cents/lb MtB pipe. Details on the volume longer-term, market participants were expecting PP prices to
and parties involved were not immediately available. March encounter downward pressure from massive new supplies from
offers opened Thursday at 21 cents/lb MtB pipe against bids India and the Middle East within weeks.
seen at 17 cents/lb MtB pipe. The week closed on a quiet
note with RGP assessed at 19.75-20 cents/lb. No PGP or CGP
deals were heard done this week leading one participant to Butadiene
point out that spot propylene activity was unusually high in
February and had slowed significantly this month. Europe
European butadiene producers reported this week an
Latin America unwillingness or needing to sell any volumes due to their
In Brazil, propylene price was heard at $600/mt FOB contract in systems being in balance. “We are balanced and we don’t
March, which was an increase of 6% compared to last month. have to or need to go to into the market,” a producer said.
Demand was reported in the Brazilian market as normal with However, prices remained under pressure due to persistent
the plants working at 100% capacity. Downstream, long supply in the crude C-4 chain. No transactions were
prolypropylene offer prices for the Brazilian domestic market reported done this week, although both producers and
were heard in March at Reals 200/mt lower compared to last traders differed in their views over price. Although producers
month. Following the price reduction, the producer reported PP continued to value FD NWE butadiene spot prices at
offer prices in Brazil at Reals 4,000/mt CIF raffia, Reals 4,250/mt contract price levels, traders viewed FOB Rotterdam prices at
CIF co-polymer injection and at Reals 4,400/mt CIF random. In around the $300/mt FD, with some levels talked as low as
the Mexican domestic market, propylene was reportedly $200/mt. However these levels could not be confirmed via
increasing in price on all grades for March. Polymer grade traded activity or firm bid/ask levels. “Traders seem to be
propylene contract pricing was heard at $577/mt FOB which putting volumes together for export,” said the producer, adding
reflects an increase of 35.09% as compared to the previous the overhang in supply still remained. Sources said the tightness
month, and in local currency at Pesos 8,401/mt FOB, an in the US was expected to materialize as crackers continue to
increase of 28.21% over the same time period. favour lighter feeds, such as propane and butane, as opposed to
more expensive naphtha. This would likely see more limited
Asia butadiene due to smaller C-C4 yields. “The expectation was that
Prices were range-bound until Thursday, only to gain $20/mt crude C-4 would tighten [in the US],” the producer said.
Friday upon revelations that Secco’s steam cracker outage in However, another producer said: “The US tightness is clearly not
Shanghai would drag longer than expected. Secco produces PP there yet, if they can buy all those tones ex-Europe [at the lower
and acrylonitrile, but has excess propylene capacity that it sells prices], continuing: “It looks like there’s a lot of material and it
locally. The derivative plants continued to run a week after the was [proving] difficult to get rid of stocks.” “People were
cracker was idled. On Friday, Secco said it will shut down the suffering containment problems and are having to sell at a
derivative plants as its propylene stocks have been depleted. discount,” said the first producer. Shipping reports showed that
Taiwan’s Formosa had production problems too surrounding its some volumes had moved from the ARA region to the Far East,
with around 1,800 mt said to have been shipped by one trader would return online. End users were reportedly being
on the Gasprodigy. Material was also said to have moved from supplied from inventory at Norco and from Channelview,
Hazira, India on the Richmond Bridge destined for Korea, at Texas. However confirmation from Shell was unavailable by
around $200/mt. “I think that $300/mt is too low because it is time of press. Looking ahead to April, some suggested the
below naphtha,” the producer said. A similar difference of market saw the bottom when the March CP hit 25 cents/lb.
opinion was heard in C-C4 prices, with one producer reporting April contracts would see “a roll over at best,” one trader
a factor of 0.6-0.7, below last week’s assessed level, however said, but many consumers pointed to poor demand as
other sources said that it remained pegged at co-crack value, or justification for yet another decrease. Since October 2008,
around 0.8-0.9. Producers who had balanced their systems were US butadiene contracts have tumbled by 97 cents/lb.
said to be unwilling to sell below the co-crack value. Shipping
reports showed that round 2.1kt of crude C-4 was moving from Latin America
ARA to the US Gulf Coast on the Omegagas, with a trader said Butadiene was reported by a Brazilian producer as having
to be the shipper. A further 12kt was loading in ARA, destined fallen in price by 10% compared with February. Butadiene
for Houston, with a trader said to be the seller. In related news, prices in the Brazilian domestic market were at $580/mt FOB
US-based chemical major Dow will reach on-spec styrene- and in local currency at Reals 1,380/mt FOB. “Apparently,
butadiene rubber production out of its its new 60,000 mt/year butadiene consumption is resurging in the country due to
styrene-butadiene rubber plant in Schkopau, Germany, by “the the reactivation of the automobile industry,” said the source.
end of the month”, Dow’s global synthetic rubber business In Mexico, the last crude butadiene export was heard as
director, Ralf Irmert, said this week. “We will start full carried out during the second half of February at a quantity
commercialization [of the plant’s output] at the end of the of 3,673 tons to the US. The price of the last Crude C-4
month,” Irmert said. The plant started ramp-up procedures in export from Mexico was heard at $480/mt FOB.
mid-February. The unit has been running a series of tests since it
started in February to prepare for full commercialization of its Asia
on-spec SBR, according to Irmert. Although the new plant NEA: Emerging demand from late April pushed NEA prices by
includes a capacity rights agreement with Japan’s JSR $5-10/mt on the week. The FOB Korea benchmark prices edged
Corporation, Dow owns and will operate the new unit. Its up $5/mt on the week. YNCC sold a 1,500 mt spot cargo at
synthetic rubber output will be used to produce tread profiles in $520/mt FOB Korea to Daelim for H2-April loading. Platts did not
tires. “This is the next step strengthening Dow’s position in the reflect the deal in Friday’s assessment fully as the two firms have a
most advanced rubber polymer solution. Our new products capital relation. YNCC has one more cargo to sell for April loading
enable our tire producing partners to implement significant with an offer price at $530/mt FOB Korea, while traders were
advantages in areas like rolling resistance—fuel efficiencies and quoting non-firm bids at $450-460/mt FOB Korea. End-users’ tank
CO2 emissions—and grip performance, while increasing their space in China/Taiwan was reported to have been full following
supply security,” Irmert said. A boost in the Northwest an influx of deep-sea materials from Europe and Brazil, but some
European MTBE price was not enough to lift raff-1 values. The space was seen to become available from end-April/early May as
value of MTBE versus gasoline increased 10 factor points over most deep-sea materials were due to be delivered by late April. A
the week as the switchover from winter to summer spec gasoline buying idea for end-April/early May was reported at around
approached. Last week, MTBE was assessed at a factor of around $500/mt CFR Taiwan/China from big end-users. A Japanese trader
1.27. However Raff-1 supplies were still perceived as long with sold a 1,500 mt cargo at $500/mt CFR China for end-April/early
the impact of the supply overhang in upstream crude-C 4 and May delivery. On the other hand, small end-users were willing to
butadiene also weighing on Raff-1 sentiment. A 1.5kt parcel, pay much higher at $560-570/mt CFR China. In fact, ex-Korea
loading on March 14 was reported done at factor of 0.92 FOB cargo was reported to have been sold at $570/mt CFR China for
this week, with a producer selling to an un-named gasoline late April. The prices basis CFR China rose $10/mt, while a price
blender, the seller reported. Delivered CIF cargoes would increase in Taiwan was limited at $5/mt CFR on additional
command a premium over FOB loading. The NWE MTBE supplies in the region amid a planned shutdown. Taiwan’s TSRC
market is tight for prompt material, and participants reported will shut its 100,000 mt/year SBR plant in April for turnaround.
difficulties in locating FOB Rotterdam product. Demand for SEA: The prices basis CFR SEA rose $10/mt, reflecting persisting
NWE MTBE from Scandinavia, the Baltic and the Mediterranean tight spot availabilities. Arrivals of deep-sea materials were limited
was bullish for the market, some sources said. “Some product to SEA as most end-users in the region only had limited tank
could come into Europe, in April, when one producer is space, so they were not able to take large deep-sea materials. This
thinking about switching over to make MTBE at the end of week, a Japanese trader sold a 1,500 mt cargo at $620-630/mt CFR
March,” a market source said. SE Asia. The price level was reported to have been higher than the
current market, as the cargo was split by three end-users in the
United States region. Buying interests for normal-sized cargoes were reported at
Butadiene consumers reported ample supply, even with the mid-$500s/mt CFR SEA, while selling indications were heard
Shell’s 585 million lbs/year butadiene unit at Norco, at $630-640/mt CFR SE Asia. In related plant news, BST
Louisiana, idled. While the OL5 1.8 billion lbs/year ethylene Elastomers restarted its 65,000 mt/year SBR and 50,000 mt/year
cracker restarted, it was unclear as to when the BD unit BR plants on March 10.
Asia
For the week, paraxylene rose $8.10/mt on the FOB Korea conversion cost at $130,” he said, implying that PX has room
benchmark and $7.60/mt on the CFR Taiwan/China to hit around $900/mt CFR Taiwan/China. For the day, PX
benchmark, with three bids during Platts Market on Close slumped $2.50/mt and $2/mt on the FOB Korea and CFR
assessment process this week. On Thursday, producers SK Taiwan/China benchmarks, respectively, without any support.
Energy and GS Caltex placed bids at $855/mt FOB Korea for The Asian contract price nomination for April will be
any-April parcels, while Shell sought an H1-April CFR announced next week so the market is sitting tight. Meanwhile,
Taiwan/China cargo at $870/mt. None of the three bids were isomer-MX fell $2.75/mt to $633/mt FOB Korea and $648/mt
lifted. Market watchers said it was near impossible to get FOB CFR Taiwan. SK Energy and KP Chemical are said to be in the
Korea parcels with both SK Energy and GS Caltex out on a process of negotiating term contracts and so will not be making
bidding war. Another market watcher said Hyundai Oil would open bids nor offers. There was more liquidity for isomer-MX
be the only likely FOB Korea seller, but the company has this week with off-window CFR China deals heard transacted at
remained silent. “CFR cargoes are more readily available. I $638/mt and $650/mt for standard-size parcels. Late Friday,
believe traders have around seven to eight cargoes among there was also an April parcel bound for China being offered
them and will make offers only when the price exceeds between $640-650/mt (L/C at sight). There was also a tender
$900/mt,” he said. He added that the conversion cost for offer for 10,000 mt of isomer-MX by Mangalore Refinery and
downstream purified terephthalic acid makers has been reduced Petrochemical Limited. The Indian company has an annual
following a fall in energy prices. “Conversion costs are now at capacity of 360,000 mt/year and hold regular tenders as it does
around $100 instead of $150. Japanese makers peg their not have a PX facility.
Asia
Purified terephthalic acid prices in Asia were supported Some said the summer season could herald better times
over the past week mainly on continued consumption for PET bottle chip makers, which within the polyester
from end-users in key markets. Polyester producers in sector are said to be enjoying the best margins. But even
China, running their plants at an average rate of 70-75%, as producers maintain offer levels, prices were assessed
were caught low on PTA inventories, and some were seen $32.50/mt lower on the week to $940/mt FOB NE/SE Asia.
returning to the spot market to buy cargoes. Offers India remained the bright spot within the region, as
Thursday were made at $705/mt CFR China, though end- polyester producers were running at full rates, while
users placed buying ideas below $700/mt. Meanwhile, the planned turnarounds in the country tipped supply to the
domestic paraxylene situation appeared to be still tight side. While inquiries thinned midweek due to a
relatively tight, as poor economics were making state- holiday in India, privately-negotiated deals for cargoes
owned producers run their plants below full rates. loading in H2 March were reported done at $685/mt and
Sinopec Jinling Petrochemical, for example, started up its $700/mt CFR India (L/C 90 days). But Indian polyester
600,000 mt/year PX unit in Nanjing in December, and producers said their inventories were slowly building up,
has not been able to raise rates to 100%. Market as their customers, which have previously also bought
participants speculated that the plant could be shut, large quantities of polyester, were seeing fewer fresh
though this could not be confirmed by the company. orders and in turn were buying less feed.
Acrylonitrile were heard under $850/mt CFR, but the bid-offer range was
at $850-890/mt for a March/April cargo, a trader said.
Europe
The European spot acrylonitrile price assessment continued to
climb this week to be assessed at $800-810/mt CIF Med. One Ethylene Dichloride / Vinyl Chloride Monomer
producer described seeing “positive signs” in the market,
targeting spot prices of $850-900/mt CIF Med. He said that Europe
although he had not achieved these levels, he had traded at EDC: Prices edged up $10/mt this week as the market
over $800/mt CIF Med in the week. A trader said he had also continued to see tightened conditions as chlor-alkai production
heard producer target numbers as high as $900/mt CIF Med, rates remained low amid a weakened downstream PVC market.
adding that “if someone were to bid $850 then it (a trade) Traders reported prices for EDC rising $10-15/mt with deals
would happen, although buyers levels are still probably around reported done at levels above $180/mt. “EDC prices are starting
$800/mt CIF Med.” Sellers views met some resistance though, to move up again, possibly because there is less chlorine
as a European ACN consumer in the fiber business said that he available as both caustic and PVC demand continue to
had been discussing a spot trade level at under $800/mt CIF weaken,” a trader said. Caustic prices fell a further $80/mt FOB
Med. “Buying over $800/mt makes it difficult to keep business Rdam this week, with offers above $500/mt FOB deemed too
profitable. End-user markets do not allow us to increase our high by traders to generate buying interest. “There is no activity
prices as demand is still very depressed,” he said. However a in the spot export market, no one wants to buy and there is no
gentle improvement in demand was described elsewhere, with demand, so even an offer $500/mt FOB is seen as much too
fiber production rates in some areas of Europe said to be high,” a trader said. VCM: The market continued to be affected
running at normal. Producers were keen to pass down the by a weakened downstream PVC market, as producers and
Eur42/mt propylene March contract price increase in contract traders reported no export business for European VCM. “No
values, although no settlement was reported settled yet. I think one is buying VCM at the moment because there is no demand
it will be a late month settlement,” one said. for PVC,” a producer said. Producer Shin Etsu was preparing for
its shut down this week, with it’s Botlek plant scheduled to
United States shut down for six weeks from March 18th. “We will be shutting
Spot this week climbed $20/mt on rising propylene and down for approximately 5-6 weeks in which time we will be
notional price ideas. One trader was offering at $730/mt FOB building up inventories, restarting at the end of April,” a
USG but was turned away as the consumer did not need company source said.
material. Some said demand was weak because “tanks in China
are getting full.” Others however said there was an uptick and United States
expected transactions to be reported next week. This week, no EDC: Ethylene dichloride values were unchanged on the
exports or spot deals were heard. Meanwhile USG supply was week as demand along the vinyls chain remained supressed.
balanced because domestic producers were operating at reduced Spot trade was murky this week and although some
rates. Also Ineos’ Green Lake, Texas, 460,000 mt/year facility participants talked of material moving from the US to Asia,
completed its turnaround and was operating on-spec and at no confirmed fixtures were heard. Participants in the Asian
pre-maintenance levels. In feedstocks, March chemical grade market were focused on April pricing and demand had
propylene contracts initially settled up 1 cent to 27.50 cents/lb stalled, sources said. Upstream, raw materials continued to
but one seller was still holding out, sources said. pressure pricing as ethylene contracts were expected to fall
in March and chlorine remained weak. Downstream, PVC
Asia export values slipped this week with April pricing pegged at
Asian acrylonitrile prices were assessed $20/mt higher this $560-580/mt FAS Houston. VCM: Vinyl chloride sellers
week, mostly as offers climbed higher on a push from firm continued to face weak buy interest as EDC and PVC
feedstock propylene prices. Asia’s propylene prices were demand floundered. Sources in the US PVC market reported
assessed at $735/mt CFR China, buoyed by cracker outages a slight uptick in demand however noted that the bump in
in China and Taiwan. ACN producers raised offers up to demand could simply be a function of pre-buying ahead of
$1,000/mt on propylene costs, traders and producers said, proposed March and April price hikes. Export demand was
however, buyers were still under the $900/mt mark. Spot quiet as well with limited inquiries heard from Latin
offers of Russian origin were heard to be targeting a price American markets. “I don’t see a discernable change until
over $900/mt to the China market. Domestic prices in April or May,” said one source. Spot activity remained quiet
China were supported by additional news of production this week with no confirmed trades heard. Prices continued
cuts at Secco’s 260,000 mt/year ACN unit. China’s to be talked notionally in the upper-$300/mt range and the
Shanghai Secco Petrochemical may need to shut its ACN assessment closed level at $370-380/mt FOB USG.
plant next week if it is unable to get the steam cracker up
and running soon, a company source said Thursday. Asia
Domestic prices were at Yuan 7,400-7,500/mt ex-tank basis. EDC: The market was quiet this week, as both buyers and
In South Asia, some possible offers for floating cargoes sellers waited on the sidelines. It was not clear at this stage
what will happen to prices in April. “I think we’ll see base price of $477 million, plus working capital and inventory
something in two weeks,” a supplier said this week. Although valued at $75 million, Valero said in a statement. Valero's
the EDC market was relatively tight, with the Chinese VeraSun purchase includes seven fully built plants and one
currency improving, there were signs of low-cost US imports under development in Reynolds, Indiana; construction there
starting to head to China. Meanwhile, buyers made it clear was halted when ethanol margins fell sharply. The seven other
that they were not prepared to pay above $200/mt CFR China plants are located in Aurora, South Dakota; Charles City, Fort
for April delivery. This was also the case for Indian buyers. Dodge, Hartley, and Albert City, Iowa; Welcome, Minnesota;
Meanwhile, sellers’ offers were upward of $250/mt CFR Asia. and Albion, Nebraska. All the facilities have capacity of 110
While from the selling stand point the supply was still million gal/year, except Aurora, which is 120 million gal/year.
reasonably tight, from the buying side the downturn on PVC The purchase of six of the plants is expected to close on April 1,
and pressure on VCM — combined with a long ethylene with Albion and Albert City following shortly afterward, Valero
market, was seen as reason enough to seek lower prices in said Valero's total 780 million gal/year of US ethanol
April. VCM: There were no new developments this week on production capacity compares to Archer Daniels Midland's total
April pricing. Both buyers and sellers were watching and of more than 1 billion gal/year. "These are high-quality,
waiting before announcing any price ideas. The situation was relatively new assets in good locations for buying feedstocks,"
similar to the PVC market where there was no clear pricing Valero CEO Bill Klesse said in the statement. "We expect
for April. That said, there was pressure on the market and increases in the (US) Renewable Fuel Standard to continue."
although sellers were keen to keep prices stable from March, VeraSun sold a total of 17 plants at an auction that took place
this was “highly unlikely,” a supplier admitted. The problem Monday and Tuesday for proceeds of $993 million. The other
is that PVC prices have fallen and remain under pressure. buyers were secured lenders using credit bids. Dougherty
Added to this, ethylene supplies are ample and even with the Funding LLC submitted a credit bid of $93 million for the
recent problems at one of Formosa’s crackers, the market Marion, South Dakota, production facility. A group of lenders
remained long. Also Chinese consumers were adequately led by AgStar Financial Services submitted a credit bid of $324
supplied having purchased plenty of VCM in January and million for the remaining plants in the so-called US BioEnergy
February. In terms of pricing and consumption, the situation Group, which includes ethanol plants in Central City and Ord,
was very similar across Asia. Except in Thailand, slightly Nebraska; Dyersville, Iowa; Hankinson, North Dakota;
firmer prices, plus $10-20/mt were heard versus China. Janesville, Minnesota; and Woodbury, Michigan. And a group
of lenders led by West LB AG submitted a credit bid of $99
million for the remaining ASA Group plants, consisting of
Dimethyl Terephthalate facilities in Bloomingburg, Ohio, and Linden, Indiana.
Europe
New Motiva Port Arthur start date
European DMT had seen no improvement this week, despite
the lower-than-expected March PX contract price settlement represents delay of over a year
of Eur695/mt. DMT continues to suffer unforgiving prices in Houston — Motiva's new target date for completing the
upstream PX, with consumer demand increasingly poor as 325,000 b/d expansion of its Port Arthur, Texas, refinery has
the automotive market suffers global economic stress. This been set for the first quarter 2012, a spokeswoman for Shell,
could effectively see the market crippled by rising costs over one of two partners in the joint-venture company, said
the next four months. A PX consumer said, “The PX contract Wednesday. The project originally had a 2010 completion
settlement is bad for DMT. Customers are not able to put target. "In downstream, we're nearly doubling the size of our
material into the market with these prices, and this will not joint-venture refinery in Port Arthur, Texas," said Robin
change. Eur710/mt would have been impossible for us, this is Lebovitz, a spokeswoman for Shell, one of two Motiva 50%
not a range that makes sense. We were originally hoping for partners. The "project is expected to be online during the first
something around Eur670-780/mt.” A PTA producer said, quarter of 2012," she added in her e-mailed comment. In late
“DMT is in a much bigger mess than PTA. DMT goes into the December, Platts reported Shell said the Port Arthur project had
car and building trade, and you don’t have to be a genius to been slowed down due to cost concerns and lower refined
see how bad these industries are.” products demand. Shell did not provide a revised target for the
project completion at that time. The Port Arthur project to
expand the refinery to 600,000 b/d was kicked off with a
News December 2007 groundbreaking. If completed, the expansion
would rank Motiva Port Arthur as the US' largest refinery ahead
of ExxonMobil's 562,500 b/d refinery in Baytown, Texas.
Valero says total cost of
Lebovitz Wednesday reiterated Motiva's earlier remark that by
VeraSun deal is $552 million adding 325,000 b/d of capacity, the expansion equates to
New York —A bankruptcy court Wednesday approved Valero building a new refinery. "We are doing our part to enhance
Energy's $552 million purchase of eight VeraSun ethanol plants American capacity and energy security," she said. Saudi Aramco
at auction, Valero said. The purchase was broken down into a is the other partner of Motiva.
NWE Benzene-Styrene spread narrows was said to have fixed two vessels with around 18,000 mt for
as crude, Asia boost benzene export to Asia. In contrast, the styrene market saw demand drop
London — The benzene to styrene monomer spread narrowed to again, with more pressure on March as potential buyers were
between $420-$425/mt, the lowest level since February 27, as switching their focus to April. This tipped the March-April
benzene prices firmed against a backdrop of losses in its structure into a slight contango, of around $10/mt. March was
derivative. Spot Northwest European benzene prices spiked for notionally pegged at around $780-$800/mt CIF ARA, while April
the second consecutive day Wednesday morning. Bids for March was seen pricing at around $795-$815/mt CIF ARA. Demand for
were seen up to $360/mt on a 1,000 mt CIF ARA basis. This is a prompt styrene had been strong as propylene oxide styrene
rise of $12.50/mt compared with Monday's assessment by Platts. monomer (POSM) producers had been buying large quantities of
April bids were $10/mt higher at $370/mt 1kt CIF ARA. The styrene as they cut production due to poor PO demand yet still
market has been boosted by rising crude futures prices and a had styrene supply contracts to fulfill. This dynamic lead to over
rising Asian market, which has opened the arbitrage between the 40,000 mt of styrene to be imported into Europe, due to arrive in
two regions. According to Platts data FOB Korea prices for the Rotterdam in the coming weeks. With most of the producer
second of May are $440/mt. CFR China prices traditionally demand now met, "there would be less buying interest for March
command a $20/mt premium to the FOB Korea price, suggesting than two weeks ago," one producer said. Prices began to soften
a $100/mt spread between the European and Asian benzene last week as the US-Europe arbitrage opened, leading to around
markets. European traders have looked to sell to Asia since the 40kt being fixed for arrival in March and April. In addition two
week commencing March 9. One traded noted, "China is around major polystyrene producers announced production cuts, leading
$460/mt. With bids at $360/mt plus $80 to $90/mt for freight, to the perception of more styrene becoming available in the spot
there's potential for a small margin." In fact, one major trader market, and reduced producer short-cover demand.