Americas petrochemical outlook, w/c April 15


Houston —

US propylene market participants head into this week looking to confirm a rollover for the April contract. The first settlements for April were heard on Friday at a rollover from the March price, with confirmation of additional settlements still pending over the weekend. Market sources were still at odds over spot prices for US polyethylene. Sellers and producers noted that PE prices should be moving higher, in line with a recent increase in crude levels and higher prices globally. Buyers, however, noted that with low feedstock costs, ample feedstock supply and more expected PE capacity online this year, any increase would be difficult to justify.


Total Petrochemicals & Refining USA issued a letter to customers last week, stating that a force majeure declaration at its polypropylene plant in La Porte, Texas, from March 26 remains in place despite a production restart on April 3. Total shut down again for 48 hours on April 7, but the restart is expected to influence supply this week and moving forward. Also, with the propylene monthly contract set for a rollover from March, market participants anticipate increased spot activity based on stability.

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Along , market participants anticipate thin trading activity as traders and buyers will be working half a week or even going on vacation in observance of Eastern Holidays, sources said. Pricing for polyethylene will remain stable to higher on increased demand, sources said. will see higher pricing for polypropylene resin as supply continues to be a challenge from regional producers, while deep-sea cargoes found other markets with better netbacks, sources said. Delays to received cargoes at destination, from all origins, have increased for both feedstock and finished product, bringing concern to end-users, sources said.


US export polyvinyl chloride prices were expected to remain in a range of $735-$745/mt FAS Houston this week as US market participants await fresh May offers from top Asian producers, often seen as a bellwether of the direction of US pricing. Market sources said they expected Asian offers to be either up to $20/mt lower than April levels or a rollover to April pricing. Last week, deals were heard at $745/mt and $750/mt for volumes of up to 200 mt, which is below the level of 250 mt required for consideration in the assessment under S&P Global Platts methodology. Global demand remained soft as the US market awaits the seasonal uptick in domestic demand, which has been slow to emerge given prolonged winter weather in the US Northeast and upper Midwest, as well as severe spring flooding in the upper Midwest. Traders also have robust inventories of export-bound purchased in previous months that has been caught in a logjam of full rail storage-in-transit (SIT) yards and largely full packaging warehouses amid a polyethylene backup, which has dampened buy interest for new volumes amid lower prices. In addition, US market participants are awaiting results of an Indian review of anti-dumping duties on imports from some countries, including the US. Some market participants expect results of that review to be revealed this month, while others expect results to emerge in June or July.


Liquidity in the US benzene market was expected to improve headed into the contract period amid expectations of flat to higher pricing. Sources expected supply to remain snug throughout April and into May, but noted that imports should increase in late May and June. The increase in benzene loadings was expected to come primarily from as downstream styrene units in the region are in planned maintenance. In addition to lower import volumes, domestic output was expected to be curtailed as toluene conversion margins have been negative for several weeks now and have showed no signs of improving in the . In styrene, the market was expected to remain tight amid strong export demand and snug supply. Sources said that at least one US styrene producer was down for planned maintenance, though confirmation was not immediately available. This follows a planned 45-day maintenance by America’s Styrenics at its St. James facility, which began back in mid-January.

Source: S&P Global Platts