Americas: The week ahead in petrochemicals

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US ETHYLENE: The US ethylene market began the week at near record-low levels after closing Friday at 12.875-13.375 cents/lb ($283.84-$294.87/mt) FD USG. Continued supply length combined with limitations on export capacity continue to apply downward pressure on pricing, sources said. Expectations for April ethylene contracts, which remain outstanding, are for prices to decrease 1.5-2 cents/lb, with stronger ethane prices partially offsetting declines seen in the ethylene spot market. Market participants have suggested that delays may lead to two-month settlement terms for April contracts, and participants will be closely monitoring the market for indications. Little change is expected in this week, as producers continue to roll over supplies.

US PROPYLENE: Strong buying interest in refinery-grade and polymer-grade propylene are capturing the attention of the US market this week, as participants pivot to May contract discussions. Spot RGP closed Friday at 39-39.50 cents/lb ($859.79-$870.82/mt) FD USG on a three- to 30-day basis, 2 cents higher week on week. The increases were propping up polymer-grade propylene, which closed the week at 49.25 cents/lb FD USG. Sources attributed the recent climb in RGP pricing to stronger buy interest coupled with refinery turnarounds that have tightened supply. Expectations for May PGP contract settlements were talked at flat to up 2 cents after closing for April at 46 cents/lb, down 1 cent from March.

US AROMATICS: US spot toluene prices rose last week, finishing Friday’s session up 8 cents week on week to finish Friday’s session at 285 cents/gal FOB USG. The market was characterized as extremely tight and was expected to remain so in the near term. Chemical demand remained poor as disproportionation economics were unfavorable due to higher toluene and lower benzene values. MSTDP economics gained ground on stronger but margins remained negative. Octane demand was expected to remain strong and toluene’s blend value was estimated at near 249.50 cents/gal. In xylenes, spot mixed xylenes prices were down 1 cent week on week, closing at 281 cents/gal as sources anticipated continued tightness in the near term. Conversely, values surged amid reports of an unplanned outage by a major producer which pushed prices to as high as $975/mt FOB USG. On a spot basis, the prompt -MX spread widened week on week and was last estimated at $110/mt. prices were expected to remain firm throughout May and into June when production was expected to return to normal rates, sources said.

US MTBE: Snug supply and strong export demand to Mexico continues to be a main focus for market participants. The USGC differential to Europe has been heard at 14 cents/gal FOB USG, in line with notional trading indications for May and June heard at the at that level. Pricing continues to be well below blend values, last estimated near 244 cents, based on S&P Global Platts data.

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METHANOL: Supply-and-demand fundamentals continued to be stable over the week. Market bid-offer range for June was last heard 115-117 cents/gal FOB USG, with interest for May delivery limited. Focus continues to be on the new capacity coming online from the 1.75 million/mt methanol plant in Beaumont, Texas, which will rank as the largest in the US. The plant, a joint venture between OCI and G2X Energy, should begin commercial production in June or July “if all goes well,” a source said. Downstream, BP declared force majeure at its acetic acid facility in Texas City, Texas, which was effective April 27. The company cited unexpected issues stemming from the restart from a planned turnaround. “When additional information becomes available, we will communicate as to product availability and allocation. Once there is a safe restart of units, resumption of acetic acid production occurs at ECTC’s facility and inventory rebuild occurs, we will be in a position to make a determination about lifting the force majeure,” the company said in a notice to customers.

US PVC: US export polyvinyl chloride producers and traders settled May pricing negotiations last week in a range of $805-$815/mt FAS Houston. Some buyers sought more volumes amid tight incremental availability, leading others in the market to talk $800/mt — the April 25 assessment level following a 10% decrease — as a pricing floor, albeit one that is no longer available. However, other players said demand in some key global markets such as West Africa and Turkey remained lukewarm to those pricing levels, so support for lower pricing on an FAS Houston basis lingered after producers settled most May business. Asian PVC market activity was thin last week amid holiday trading. US export ethylene dichloride pricing could weaken after turnarounds in March at an Olin plant and last month at a Formosa Plastics plant wrapped up as Asian traders shift flows to move Asian-origin EDC to , which has proposed 25% tariffs on 106 US products including EDC. Some US-origin EDC has been rerouted to other Asian countries in anticipation of those tariffs.

LATIN POLYMERS: After seeing polyethylene and polypropylene prices hold stable to begin May, buyers in Brazil are braced for higher prices heading into the middle of the month due to a steady devaluation of the Brazilian real in recent weeks, sources said. Brazilian producer Braskem is maintaining stable pricing this week in the domestic market while raising PP prices by Real 300/mt (around $86/mt) “from the middle of the month,” a company source said Friday. buyers, however, began reporting higher Braskem pricing late last week and again Monday while also pointing to currency concerns as a driving factor. PVC pricing in the region is also expected to continue feeling pressure from the weaker Brazilian currency and a lack of European imports, sources have said.

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