US toluene values looked to remain strong this week as demand remained firm from the chemical segment.
Toluene-fed chemicals saw continued support as, despite declines on the week, benzene prices continued to subsidize disproportionation margins. TDP margins posted the most significant declines, shedding near $71.50 to close Friday at near $123/mt. MSTDP margins fell near $19 to close at near $99, while HDA margins were down roughly $39.50 to near $91.50/mt, according to S&P Global Platts data.
December mixed xylenes prices were down about 3 cents on the week, closing Friday at 230 cents/gal FOB USG and pressured to post further declines in the coming week. Derivative demand for mixed xylenes was limited amid recent length in the US paraxylene market. Mixed xylene’s blend value rose about 5 cents on the week to finish at near 215 cents/gal as sources reported blending material as derivative demand was limited.
While prices were under pressure, sources anticipated that mixed xylene’s prices would see some support from paraxylene with prices in the 220s cents/gal range. Prompt spot paraxylene prices were down slightly on the week as market length added pressure. Prices shed $10 to finish at $830/mt FOB USG. Sources reported an uptick in exports this past week with at least 30,000 mt leaving the US in November and another 10,000 mt loading in early December.
After export polyethylene prices began trending lower last week, market participants were eagerly anticipating new December offers.
Volumes for export have remained somewhat limited, sources said, noting that rail cars could be procured, but not in great volumes. Trader sources were heard seeking rail cars in the mid-upper 40s cents/lb range, while pricing was being seen closer to 50 cents/lb for most grades, per market feedback.
On the domestic front, there have been expectations pricing could move lower in December after producers have worked hard to maintain the 10 cents/lb increases that have been implemented since later August when Hurricane Harvey hit the Texas Coast. Sources have suggested that most — if not all — of the post-hurricane increases could be out of the market by the end of January through market-wide decreases and potentially through non-market moves as producers and buyers finalize contracts for 2018.
US export polyvinyl chloride prices for December were settled at $760/mt FAS Houston by at least two producers late last week, and market participants looked for news on Shintech’s negotiations for January pricing as a sign of an expected recovery next month. Prices have fallen 17.4% from a post-Hurricane Harvey high of $920/mt FAS Houston amid weak global demand, and producers resisted pressure from traders to cut prices to the range of $740-$750/mt FAS Houston.
Market participants expect January pricing to begin inching up, as buyers have already begun asking for higher volumes and inventory rebounds are expected. Market sources said Shintech’s January settlement should be a bellwether of what’s to come, and the company is expected to settle that pricing later this week or early next week. PVC’s direction also is expected to trickle down to ethylene dichloride and vinyl chloride monomer, which have retreated in tandem with PVC amid weak global demand.
Import PE buyers in key South American markets are expected to continue to show little buy interest in the wake of US-origin offers that many in the region still view as too high, sources said. While PE prices from US exporters have softened in recent weeks, many markets players from Brazil to Chile are of the opinion that a floor has yet to be reached, sources said.
PP buyers, meanwhile, have seen availability of regionally produced resins improve along the Pacific Coast, with Colombia’s Esenttia and Chile’s Petroquim returning to normal production levels between the end of Q3 and Q4. With more South America-produced PP resins available, some pressure has been felt in the import market, particularly by traders peddling on-the-water cargoes, sources have said.
In Brazil, Braskem is raising domestic PP prices by Real 100-200/mt (around $31-$62/mt)for December, a company source said Friday, citing a weakening Brazilian Real and stability in international pricing. Braskem will roll over the November 15 Real 200/mt increase on all PE sold in Brazil, the source said, adding that demand has been strong. Many of Braskem’s customers are expected to maintain operations throughout December, the source said.
Others in Brazil, however, are eyeing reduction in consumption of resins this month, in line with seasonal slowdowns typically brought on by port closures, worker vacations and holiday celebrations.