EMEA petrochemicals outlook, w/c Dec 3

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London —
OLEFINS: The European ethylene spot market will be under pressure this week, due to bearish feedstocks and falling downstream polymer demand. Exports remain an unlikely prospect this week, as no recovery of buy interest is expected from Asia. No quick changes are expected in the River Rhine situation, which remains persistently low, leaving the ethylene supply situation unchanged and under restrictions. Propylene supply availability is set to remain ample this week amid several production issues in downstream markets, though steam cracker run rates will continue to be impacted by the Rhine levels in . Despite some inquiries from Asian buyers, both export and domestic demand remains limited and as a result spot prices remain under pressure.

POLYMERS: pricing is expected to be stable this week, resisting the seasonal slowdown in demand for polymer products. European order books for December have filled quickly on both a domestic and export basis. In polypropylene, market players will start discussing December prices after the European December propylene contract price was settled Eur100 lower on the month at Eur960/mt ($1,093/mt) last Friday. Polystyrene participants await the settlement of the December European styrene contract. Demand is set to remain healthy as buyers take advantage of lower prices. As contract negotiations commence producers are expected to partially track falls of the styrene monomer in order to retain margins. In PET, the force majeure on supplies from the Indorama plant in Rotterdam is likely to buck the downward trend seen in the European market over the past few weeks. This will further damage already-weak MEG demand.

AROMATICS: The styrene contract is due to settle this week, with the price expected to fall by three digits as a result of significant declines in the spot market. The spot market fell $205/mt in November due to weak demand and falls in the overall energy complex. Spot demand is expected this week in benzene, as the settlement of the monthly will bring non-participants to the table. Pricing will be led by the oversupply of material in the European market, with upward movement unlikely without significant support from upstream energy. Toluene fundamentals hold a little more strength this week, as availability has trended towards tight. Logistical issues on the River Rhine continue to plague a section of the market, while no arbitrage opportunities are expected.

METHANOL/MTBE: Low water levels on the River Rhine, high inventories in Rotterdam and falling prices in Asia will continue to impact the methanol spot market this week. Over in MTBE, the market is watching availability carefully. Small improvement to Rhine levels at the key chokepoint of Kaub over the weekend show a promising start to the week.

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OTHER: Delivery delays are likely in France due to social unrest. Two industry events are occurring this week. EPL will be held in Valencia, gathering the olefins and aromatics community. PlastEurasia will be held in Istanbul, covering the plastics industry.

–Simon Price, simon.price@spglobal.com

–Edited by Maurice Geller, maurice.geller@spglobal.com

Source: S&P Global Platts