EMEA petrochemicals outlook, w/c Mar 4


— In the market, following an increase in the industry-settled March contract price and rising domestic and export spot price levels last week, good domestic demand is expected to help maintain prices in in the coming days.


Meanwhile, market participants continue to watch the recent uptick in Asian spot pricing, although, on paper at least, arbitrage opportunities to Asia remain closed. Fundamentals in propylene are expected to remain stable this week, with ample supply amid healthy stock levels and limited buying interest.

On the ethylene market, tightness is expected as a heavy turnaround period approaches from onwards. This is expected to kindle buy interest on the spot market, as participants are looking to pre-book material for the weeks ahead. In addition, buyers may look for cargoes from overseas, especially the US, to cover shortages.


Global tightness on the acrylonitrile market is expected to cause significant price hikes over the coming weeks, with Ineos having recently declared force majeure on ACN supplies from its 280,000 mt/year Sealands plant in the UK and its 545,000 mt/year Green Lake plant in Texas, US.

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Coupled with planned turnarounds in Asia and Europe starting in April, prices may continue to rise, putting pressure on margins for acrylic fiber producers. Meanwhile, prices for oxo-alcohols are likely to receive some support from the higher propylene contract price for March, which was settled up 25/mt from the February contract price at 950/mt FD NWE Thursday.

However, soft demand limits the potential for substantial price increases. On the phthalic anhydride market, fundamentals are likely to remain unchanged as demand from the construction sector remains soft despite expectations of a seasonal uptick.


In polypropylene, market participants will start discussing prices after the feedstock March propylene contract price settled at a Eur25/mt increase from February last week. Polypropylene producers are expected to ask for increases above the Eur25/mt rise in feedstock costs, sources said.

Meanwhile, on the polyethylene market, March offers are expected to emerge this week after the contract price ethylene settlement for March, which was agreed at a Eur30/mt increase to Eur1,015/mt. While market fundamentals are more balanced for HDPE and LDPE, LLDPE is set to remain long.

Polystyrene producers will be targeting increases following the March styrene contract price settlement at Eur1,055/mt, up Eur60/mt from the February settlement.

Global plastics manufacturer Trinseo announced a Eur100/mt increase following the settlement.


Fundamentals in the benzene market are unlikely to change over the course of the week. However, demand in the downstream styrene market may provide some support as buyers were looking to secure sufficient volumes of the product ahead of the heavy styrene turnaround season starting in Q2.

In the European toluene market, premiums are likely to be further tested this week. Expectations are for toluene pricing to remain flat, with demand and supply more balanced. With in a firm contango between March and April, stable pricing would pressure premiums downwards.

Meanwhile, tightness in the European orthoxylene market means market participants are looking further afield for cargoes. Following on from US Gulf cargoes booked last week, traders are expected to look to Asia to secure volumes for arrival at the end of March and beginning of April, a sign that European production issues may not be sorted out quickly.

For mixed xylenes, arbitrage opportunities to the US Gulf look open on paper, but tight availability in Northwest Europe may prevent traders taking advantage. If supply does become available, demand may pick up from its current low levels to take advantage.


Last week saw an uptick in methanol spot pricing in Europe and market participants will be watching to see whether this continues, as despite the recent rise in prices, supply and demand fundamentals in Europe remain largely unaltered.

In the European MTBE market, following a decrease in its strength relative to Eurobob gasoline and a rise in stocks in the Amsterdam-Rotterdam-Antwerp hub, domestic demand is expected to rise, pushing prices up in Europe.

Last week, the majority of market participants attended industry events in London for IP week, impacting the trading activity despite the relativity attractive MTBE pricing.

— Staff, newsdesk@spglobal.com

— London CED, newsdesk@spglobal.com

Source: S&P Global Platts