London —
OLEFINS
Olefins supply is seen tight in Europe but demand remains flat as well, balancing the market. Ethylene, the building block for the largest set of petrochemicals, is seen turning tight after remaining long for months. Upcoming plant maintenance and tighter feedstock ethylene are expected to support downstream monoethylene glycol prices. Propylene supplies in Europe are set to remain tight this week, with spot price at a premium to the contract price. The European butadiene market is closely watching developments in the Asian market, following mixed movements in the past week. Meanwhile, domestic butadiene demand remains healthy and limited upstream crude C4 availability is continuing to cap butadiene production.
POLYMERS
Bullish olefins may lend support to downstream polymer prices. They may not garner support from downstream demand as procurement for summer packaging demand is over. In the polyethylene market, metallocene and certain grades of high density PE are tight because of supply problems. Demand in polypropylene markets is expected to slow down in July and August. Meanwhile, contract negotiations were ongoing, with most market players anticipating prices remaining stable. In the polystyrene market, demand has underperformed which is expected to lead to a stronger push from buyers for lower prices. In the SBR market, Italian Versalis is set to start maintenance in Ravenna next week until mid-August, with the outage coinciding with the low-demand season. Growing Asia-Europe arbitrage window is likely to see more incoming acrylonitrile butadiene styrene volumes which will in turn put downward pressure on European prices. The polyethylene terephthalate market remains tight in Europe presently, with demand still strong due to hot weather. Expectations of a price decrease have seen some buyers hesitant to buy more than immediate requirements.
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AROMATICS
Aromatics like toluene and mixed xylenes that go into the gasoline blending pool are seen well supplied and traders have been quoting low premiums over gasoline for them. Spot paraxylene availability in Europe at present is low due to increased offtake from purified terephthalic acid producers. Fundamentals for the styrene market are expected to be bearish in the coming weeks. Supply is expected to be ample despite Synthos’ turnaround during the summer. In the feedstock benzene market, tightness in the prompt has disappeared and the market is expected to flatten as demand subsides during the summer.
INTERMEDIATES
The European methanol market continues to see signs of tightness as the movement of Russian methanol into Europe remains limited. But with sources expecting the ban on the movement of products listed as dangerous, which includes methanol, to end on July 25, availability is expected to improve. MTBE demand picked up this week, but sentiment pointed to poor support in the near term. Global availability of MTBE is plentiful, according to several sources, and demand for Eurobob gasoline barges is stunted outside of the Mediterranean. Upstream BP’s PTA plant in Geel, Belgium has ended its force majeure in place since April 4. This should improve PTA supplies in Europe and help alleviate PET shortness.
OTHERS:
EU statistics agency Eurostat will publish its latest international trade data Monday. Russian Ministry of Economy will set the new export duties on oil, petroleum products and aromatic hydrocarbons next week.
–Shashank Shekhar, [email protected] –Edited by Jeremy Lovell, [email protected]
Source: S&P Global Platts
