US AROMATICS
US prompt spot benzene prices were expected to remain relatively steady this week as the contract period comes to a close. March spot benzene has averaged 201.22 cents/gal thus far in February, pointing to potential for a slight gain in the March benzene contract. The February contract settled at 193 cents/gal. Length remained a concern in the US benzene market as downstream demand was softer amid an ongoing turnaround by America’s Styrenics. That maintenance was poised to conclude in mid-March though sources said a second styrene producer would take a planned maintenance in late March. Styrene prices were expected to remain firm this week amid ongoing tightness.
US VINYLS
US export polyvinyl chloride prices could retreat this week as negotiations for March pricing ramp up. In Asia, prices declined $5-$10/mt last week after fresh March offers were announced at a rollover to February. Market sources said a US producer nominated March pricing up $10/mt late last week at $800/mt FAS Houston. Late February deal levels have been heard at levels $15-$25/mt below that, indicating the market would not be receptive to higher March pricing. In addition, market sources said the domestic PVC market had not embraced 4 cents/lb price increase announcements from producers, raising the possibility that they may seek to spread the increase over two months, with 2 cents/lb in February and 2 cents/lb in March. Domestic PVC prices have been flat since April 2018, as the market rejected 2 cents/lb price increases in October and December. Upstream, at least two of five producers announced caustic soda price increases, according to customer letters obtained by S&P Global Platts. Formosa Plastics is seeking an increase of $70/dst, while Olin announced a $50/dst, both effective immediately or as contracts permit. The other three chlor-alkali producers were expected to follow suit, as is typical. The domestic market rejected price increase announcements from all five producers in late November and early December last year that ranged from $40-$45/dst.
US POLYMERS
US polypropylene spot prices showed a slight decline while the drop-off in feedstock prices was more pronounced, setting the table for an additional drop in the final week of February, recent market sentiment revealed. With polymer-grade propylene inventories continuing their record build in recent weeks, PP pricing should will continue to decline as part of an overdue market correction before demand incrementally climbs to meet ample supply, market sources said.
LATIN POLYMERS
Activity in Mercosur is expected to remain quiet this week ahead of next week’s Carnival celebrations in Brazil, with the rest of the region taking a cue from South America’s biggest market, sources have said. Many polyethylene (PE) and polypropylene (PP) buyers have been opting for smaller holdover volumes while waiting out import prices floors and a post-Carnival return to higher levels of industrial activity, sources have said. PE and PP buyers along West Coast South America market continued expecting a resolution on the US-China trade tensions while in the meantime will continue with hand-to-mouth strategy, sources said. Traders hope pricing has arrived to a floor where buyers would trigger purchase orders, however buyers are acting with precaution watching global signals such as demand in China, currency woes and volatility of international prices, as per market feedback. Pricing is poised to remain stable to lower with no further changes in the current market fundamentals, sources said.
–Edited by Richard Rubin, [email protected]
Source: S&P Global Platts
