US AROMATICS:
US aromatics prices rose on the week amid talk of an unplanned production issue at Shell’s Deer Park, Texas, facility. Details and confirmation surrounding the outage were not available at time of publication. Prompt spot toluene prices rose roughly 6 cents week on week, closing Friday at 278 cents/gal FOB USG. The gains, coupled with relative softness in benzene, continued to negatively impact disproportionation margins and TDP and MSTDP margins were last estimated at near $5 and minus $3/mt, respectively. Margins were not expected to improve in the near term, sources said. Toluene’s blend value was last estimated at near 257 cents/gal. Mixed xylene prices were stronger on a bump in buy interest sources said was associated with the Deer Park facility. Prompt spot mixed xylene prices were up near 16 cents on the week, closing Friday at 284 cents/gal. At that level, and considering spot paraxylene prices at $905/mt FOB USG, the prompt spot PX-MX spread was estimated at near $40/mt, a level sources said was unsustainable. One source noted that if paraxylene prices did not rise quickly, spot mixed xylene prices were likely to plummet. In contract news, April paraxylene contracts were heard settled down a half cent at 48 cents/lb, sources said.
US BENZENE & STYRENE:
The US benzene market has been quiet as derivative styrene turnarounds have been ongoing. While this is the last week of trades being used in the formula for contract settlements, market participants expect a mostly quiet week. US benzene has not been correlated with crude and there have been no real drivers lately, sources have said. April and May benzene was last assessed Friday at 293 cents/gal DDP USG and 294 cents/gal FOB. US styrene has shown a little more volatility lately because of a producer being short. However, there is an expectation for US styrene pricing to hover at the netback to Europe once short positions are covered. US styrene was last assessed Friday for prompt-month pricing at 59.85 cents/lb ($1,320/mt) FOB USG and at 58.95 cents/lb ($1,300/mt) FOB US for forward-month pricing.
US OLEFINS:
April propylene contracts began settling down 1 cents/lb late Friday with a market-wide settlement expected early Monday, sources said. The 1-cent/lb decrease would put polymer-grade contracts at 46 cents/lb and chemical-grade products at 44.50 cents/lb. The settlement, if accepted market-wide, would be in line with market expectations, which had been talked at a decrease of 1 cents/lb to a rise of 2 cents/lb. The decline in prices is due to thin demand, sources said. Meanwhile, Spot ethylene continues to hover near record lows as supply length persists. Prompt-month ethylene was heard traded at 14.25 cents/lb MtB Nova, 0.25 cents higher than a trade Friday at 14 cents/lb MtB Nova.
US PE:
Pressure for lower polyethylene pricing in both the US domestic and export markets appeared to be mounting entering the final full week of April. While producers entered April attempting to implement a 3 cents/lb increase that had been pushed from March, sources have suggested buyers would push for a decrease amid historically low feedstock pricing and a building in US and Canada stocks, based on preliminary industry data from the American Chemistry Council. Some market participants suggested late last week that a multi-cent drop for domestic contracts could happen for April, though May also could be a possibility. On the export side, trader sources have noted that volumes for some grades appear to be more available, and while some price reduction has occurred for certain resins, additional drops would be warranted to make US PE more competitive in key global markets. There were some expectations lower pricing could find its way into the export market as soon as this week, particularly if producers begin feeling pressure to export to impact monthly inventory levels. However, recent upticks in crude over the past month, as well as talk of increased tightness in some key global markets, has led to some belief that US resin could become more competitive even without a significant cut in pricing.
US PVC:
US polyvinyl chloride producers were expected to nominate May pricing this week or next, and traders have pushed for declines ranging from $35/mt to $55/mt from April levels. However, some producers have indicated May offers may come at rollovers to April pricing, or $840/mt FAS Houston, but some traders say producers can swallow a significant drop for May and do rollovers in June, or spread declines across the next two months before pricing reaches bottom. Last week a major PVC producer in Taiwan announced fresh offers for May that were $50-$60/mt lower than April settlement values, higher than the expected $40/mt decline, but US producers noted that April US prices were assessed $50-$55/mt lower from March, so the global market could be catching up with US pricing in those latest announcements. US trader sources said producers may try to hold pricing at April levels, but that could be difficult given market pressure to further reduce pricing unless they have no pressure to move volumes. Last week traders were heard selling PVC around $800/mt FAS Houston in some instances, with other deals heard in a range of $820-$840/mt FAS Houston. Among feedstocks, Asian traders were heard moving US-origin ethylene dichloride cargoes to Thailand or India instead of China after China announced plans to impose 25% tariffs on 106 US items, including EDC and PVC. While China-bound PVC is re-exported upon arrival because of anti-dumping duties, China is the top market for US EDC exports, having received 370,844 mt in 2017, according to US trade data.
LATIN POLYMERS:
Buying activity could pick up for polyethylene this week should CFR import pricing continue to fall as distributors who normally carry imported resin restock after spending much of April taking on only minimal volumes while waiting out a price floor. On the polypropylene front, buyers are likely to encounter stable-to-higher pricing amid dwindling availability from Asia and the Middle East, with sources pointing to strong buying in China as a key factor. Brazilian producer Braskem enters the week with stable pricing on PE and PP sold in the domestic and Pacific markets, a company source confirmed late last week, adding that any adjustments would be related to corresponding movements in key global export markets such as Asia and the US.
