US ETHYLENE: The US ethylene market will begin the week at near record-low levels after closing Friday at 13-13.50 cents/lb ($286.50-$297.62) FD USG. Oversupply combined with limitations on export capacity continue to apply downward pressure on pricing, sources said throughout the week. Expectations for April ethylene contracts, which are expected to settle this week, are for prices to decrease 1.5-2 cents/lb, with stronger ethane prices partially offsetting declines seen in the spot market. Little change is expected in fundamentals this week, as producers have been heard rolling over supplies.
US PROPYLENE: With April contract prices settled last week, the US market was turning its attention to May discussions amid rising spot refinery-grade values. Spot RGP closed Friday at 37-37.50 cents/lb ($815.70-$826.73/mt) FD USG on a three- to 30-day basis, 2.50 cents/lb higher on the week. The increases were propping polymer-grade propylene, which closed the week at 47.25 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/lb after closing for April at 46 cents/lb, down 1 cent/lb from March.
US METHANOL: Supply and demand fundamentals are expected to be largely stable over the week. Market pricing for May was last heard 117-118 cents/gal FOB USG, with interest for June product limited. US methanol producers Southern Chemical Corporation and Methanex announced last week they will each hold their May North American posted contract prices at 149 cents/gal ($496/mt) FOB USG. With discounts and rebates averaging 20%, the net contract price for May comes to 119.2 cents/gal. SCC is the US distributor for Methanol Holdings Trinidad, the largest producer in the Americas with 4.1 million mt/year output. Methanex ranks as the world’s largest methanol producer by capacity.
US BENZENE & STYRENE: The US benzene market is expected to remain quiet this week as a couple of derivative styrene outages remain ongoing. Pricing hovered in the 290-294 cents/gal range last week with the forward month structure flat and market participants expect dynamics of slow demand and good supply to remain the same this week. US spot benzene was assessed Friday at 290 cents/gal on an FOB and DDP basis. Morning ranges were heard at 289-291 cents/gal. In US styrene, the market was mostly illiquid and views amongst market participants were mixed. Some market participants felt US pricing was at the netback to European styrene pricing, while others felt supply was still limited from producer outages and that the price should be higher. Activity was expected to remain quiet this week. US styrene was last assessed Friday at 59.40 cents/lb ($1,310/mt) FOB USG for prompt pricing and the forward month at 58.50 cents/lb ($1,290/mt) FOB USG.
US AROMATICS: US aromatics prices rebounded after declines last week and May toluene and mixed xylene prices finished Friday’s session at 277 and 282 cents/gal FOB USG, respectively. Chemical demand was largely absent as hydro-dealkylation and disproportionation economics were poor with margins in negative territory. The poor margins were underpinned by softer benzene prices, sources said. There was little expectation of near term change though benzene could see some support if crude prices stay strong and imports remain subdued as derivative styrene turnarounds come to a conclusion. Demand for toluene from the gasoline segment however was strong and was expected to remain firm this week with blend values last estimated at just under 269 cents/gal. In xylenes, mixed xylene prices continued to face some pressure due to a narrow spread to spot paraxylene. The prompt spot PX-MX spread was last estimated at near $65/mt leading some market participants to suggest that mixed xylene values were likely to move lower if paraxylene failed to strengthen significantly. On a contract and monthly average basis, the spread was near $236/mt, down $48 from the March spread.
US PVC: US polyvinyl chloride producers were expected to settle May pricing this week after pressure from buyers to reduce offers by $35/mt to $55/mt from April levels. A producer was heard to have settled at $815/mt FAS Houston on Monday after producers initially offered rollovers to April pricing at $840/mt and $830/mt. Another producer was heard to have sold May volumes at $820/mt FAS Houston and in a range of $800-$810/mt FAS Houston. However, producers pushed for levels as low as $770-$790/mt FAS Houston, citing declines in global pricing, while others said the maximum achievable level last week was $800/mt. US spot ethylene was assessed Friday at 13-13.5 cents/lb FD USG, up 0.25 cent from a record low of 13 cents/lb on Thursday amid a continued supply glut amid new cracker startups, adding more downward pressure to PVC pricing. US ethylene dichloride prices, however, were seen strengthening this week amid firming global pricing and a netback to Asia, the top destination for US EDC exports. China?s announcement of pending 25% tariffs on 106 US products, including EDC, has prompted some shifts in trade flows with US EDC bound for Thailand and India instead of China, while Asian-origin volumes, mostly from Taiwan and Korea, were moving to China instead of Thailand and India. The tariffs have not yet officially been imposed, but market participants are shifting flows in case China implements them as cargoes are in transit.
LATIN POLYMERS: Buyers in South America enter May with expectations for lower import pricing and, on a related note, improved availability from the US. Import pricing for both polyethylene and polypropylene trended stable to lower last week amid a lack of deals as the market was talked quiet ahead of May, sources said. Domestic pricing has been relatively stable for PE, with local currency devaluation pressuring import offers lower, sources said, adding that if currency gains are seen this week then prices from local distributors could soften. PP import pricing is expected to remain stable or possibly rise in line with firming global pricing, particularly in Asia should Chinese buying return to higher levels. Locally, Brazilian petrochemical producer Braskem is maintaining stable domestic pricing on both PE and PP this week, a company analyst said Friday.
