US OLEFINS
With the February propylene contract having settled last week, US olefins participants said they were now awaiting February ethylene contract settlements this week. Trade participants were expecting a decline for the February ethylene contract as spot levels in February have fallen to a 7-month low amid ample supply. However, the spot market rebounded last week to 15.75 cents/lb FD USG as a pump fire at Flint Hills Resources’ Port Arthur, Texas, chemical complex caused an upset and shutdown of a 634,000 mt/year mixed-feed steam cracker, according to a regulatory filing made public Friday.
US POLYMERS
Market participants expected activity for US polypropylene to remain static based on they expected feedstock polymer-grade propylene prices to decline. With sources unclear on precisely when PGP spot, which closed last Friday at 32.50 cents/lb, will reach its floor, PP participants are awaiting demand to rise above ample domestic supply. Latin America remains the primary market for exports.
LATIN POLYMERS
Market activity is expected to be muted this week throughout Mercosur amid annual Carnival celebrations in Brazil, with many buyers and distributors calling the festival as the end of summer vacation season, sources said. Brazilian producer Braskem has lowered domestic prices for polyethylene (PE) by Real200/mt (around $53/mt) in March amid devalued currency concerns, a company source said Friday. At least one other South American PE producer was heard to be following Braskem’s lead by lowering Brazilian prices, as was at least one US producer who regularly distributes in the region. Braskem’s domestic polypropylene (PP) prices will hold stable, the source said, adding that recent firming in Asian markets was a factor. Along West Coast South America, PE prices were poised to continue being stable to higher under expectations that both US and China will complete a trade agreement soon, sources said. Traders said pricing was at a floor where buyers may feel confident to trigger purchase orders. Buyers, on the other side, kept watching global market fundamentals such as demand, US production and inventories, sources said. Buyers believed US producers have healthy export volumes available, as the US continued to be the driver for both sourcing and pricing for WCSA, sources said. Colombia’s participants will continue monitoring domestic producer Ecopetrol after the energy company placed both of the low-density polyethylene (LDPE) units on a preventive maintenance, sources said. Although Colombia’s sole producer of polyethylene said the maintenance was not expected to impact Ecopetrol’s supply, some sources said they will keep an eye on inventories.
US VINYLS
US spot export polyvinyl chloride prices are expected to be stable this week at $785-$790/mt FAS Houston after at least two producers last week settled March pricing at the midpoint of that range, which was a rollover to February levels. However, market sources said prices could begin to retreat with rising pressure to destock inventories held over from previous months. Sources said producers have export volumes available as domestic demand was weakened by prolonged cold weather in the US Northeast and Upper Midwest. Typically, domestic demand strengthens in March ahead of the peak construction season, but colder weather has dampened that trend so far this year. This weakness comes as producers were seeking price increases for domestic PVC, either 4 cents/lb in February or 2 cents/lb in February and March. Market sources said a 2 cents/lb price increase is possible if domestic demand strengthens, particularly for construction and pipes.
US STYRENICS
US spot benzene values are expected to remain relatively firm in the near term following the settlement of the March benzene contract. Sources anticipated that liquidity would tick up in the near term as Americas Styrenics returns from a 45-day planned maintenance at its St James, Louisiana, site. That bump in demand was expected to be shortlived however as a second styrene producer was expected to go into turnaround toward the end of the month. Additionally, the market would face continued pressure from market length as import levels for January and February surpassed 100,000 mt/month, sources said. Downstream, styrene prices were poised to remain firm as well in the near term with supply tightening globally in Q2, sources said.
Source: S&P Global Platts
