Petrochemical feedstock volatility is expected to last through the rest of 2020 with low oil prices and and production shut-ins that depress naphtha and boost ethane prices in the fallout of the coronavirus pandemic, LyondellBasell CEO Bob Patel told a conference Friday.
NOVA Chemicals and Chevron Phillips Chemical plan to increase the prices for all their polyethylene products by 4 cents/lb in June, the companies told customers in letters obtained by S&P Global Platts on Thursday. Chevron Phillips and NOVA Chemicals are the latest in a group of producers announcing plans this week to implement a price increase on US polyethylene products in an attempt to stabilize or increase pricing in the PE market, sources said. Formosa, Dow Chemical and LyondellBasell's subsidiary Equistar Chemicals also announced a 4 cents/lb increase for PE products earlier this week.
Equistar plans to implement the increase on all grades of PE products in North America, the company said in a letter to customers obtained by Platts May 12. The increase will be effective June 1 and is in addition to any previously announced price hikes, the letter said.
Formosa Plastics plans to implement its own 4 cents/lb increase on all of its US PE, the company said in a letter to customers obtained by Platts May 11. The revised cost will be effective for all shipments as of June 1 and "orders for all products will be subject to our ability to supply, based upon normal operations of our facilities," it said.
INFRASTRUCTURE
**Nan Ya's new 800,000 mt/year monoethylene glycol plant in Texas was expected to come online by December or January 2021 rather than during the third quarter this year, a source familiar with company operations said this week.
**As major automakers prepare to resume some manufacturing this month, petrochemical producers see upstream benefits to polymers and other products such as polypropylene and polyurethanes that provide the pieces that make up vehicles, executives told a conference.
**State-backed YPF, the biggest oil refiner in Argentina, has restarted operations at its 25,000 b/d Plaza Huincul refinery as domestic demand recovers because of an easing of the pandemic-related economic shutdown, a company executive said.
**Indorama Ventures, the world's largest polyethylene terephthalate (PET) producer, is reducing inventories and preparing for longer term pandemic-related lockdowns if they happen, the company said May 12. The company said in a statement that its overall PET sales increased despite pandemic-related lockdowns in various countries in the first quarter of 2020, and lower upstream oil prices helped boost earnings of its US feedstock paraxylene and global purified isophthalic acid (PIA) businesses. However, pandemic uncertainty has prompted Indorama to tighten stocks and spending.
PRICES
Olefins
**Platts assessed spot polymer-grade propylene for front-month May at 23 cents/lb FD USG Friday, flat day on day. The assessment took into account a May PGP bid at 22.75 cents/lb MtB-Pipe. Forward-month June PGP was assessed at 23.25 cents/lb FD USG, also unchanged day on day. The assessment kept Thursday's market structure. US prompt spot refinery-grade propylene was assessed at 10.75 cents/lb FD USG, also flat day on day. The assessment was based on the last known pricing indications amid no fresh activity.
**Platts assessed US spot butadiene at 13.75 cents/lb CIF USG Friday, flat week on week, based on the last known pricing indications amid no fresh activity.
**The US butadiene contract for May was assessed at 20 cents/lb, flat week on week, based on a May contract settlement heard at this level.
**US export MEG prices were flat this week at 13.5-14.5 cents/lb FOB USG.
**Platts assessed spot Mont Belvieu ethylene for front-month May at 10.75 cents/lb FD Mont Belvieu Friday, flat day on day. The assessment came within a May ethylene bid-offer range of 11-12.75 cents/lb MtB-Nova. Forward-month June Mont Belvieu ethylene was assessed at 10.875 cents/lb FD Mont Belvieu, also unchanged. The assessment took into account a June ethylene offer at 13 cents/lb MtB-Nova.
**Choctaw ethylene for front-month May was assessed at 10.5 cents/lb FD Choctaw, flat day on day. The assessment took into account a May ethylene offer at 12.25 cents/lb FD Choctaw. Forward-month June ethylene was assessed at 10.625 cents/lb FD Choctaw, also flat day on day. The assessment took into account a June ethylene offer at 13.5 cents/lb Choctaw-Pipe.
Polymers
**Export LDPE prices were flat week on week Wednesday at $849-$871/mt (38.5-39.5 cents/lb) FAS Houston.
**Export HDPE blowmolding was unchanged on the week Wednesday at $607-$629/mt (27.5-28.5 cents/lb) FAS Houston.
**Export LLDPE butene prices increased $11 week on week Wednesday to $596-$618/mt (27-28 cents/lb) FAS Houston.
**Export homopolymer PP prices dropped $77 week on week Wednesday to $750-$772/mt (34-35 cents/lb) FAS Houston.
**US export PVC prices rose $10/mt this week to $570-$580/mt FAS Houston.
**US import PET prices were assessed stable on the week Wednesday at $846-$868/mt (38-39 cents/lb) based on a pricing indication heard at that level.
**US ethylene dichloride prices were assessed at $60-$70/mt FOB USG May 12, an all-time low since Platts began assessing it in June 1996.
**CFR West Coast of South America pricing for HDPE film-grade was unchanged week on week, assessed Wednesday at $705-$715/mt based on pricing at $710/mt. CFR Brazil spot HDPE film was up $10/mt, assessed Wednesday at $710-$730/mt.
**CFR West Coast of South America spot LDPE was stable week on week, assessed Wednesday at $945-$955/mt CFR, based on most indications at $950/mt. CFR Brazil spot LDPE pricing was up $10/mt, assessed Wednesday at $950-$970/mt.
**CFR West Coast of South America spot LLDPE was flat week on week, assessed Wednesday at $685-$695/mt based on CFR offers at $690/mt. CFR Brazil spot LLDPE butene was flat week on week, assessed Wednesday at $690-$710/mt.
**CFR West Coast of South America spot homopolymer-grade PP prices were up $20/mt week on week, assessed Wednesday at $845-855/mt. Copolymer-grade PP also rose $20/mt to $925-$935/mt, with the premium over homopolymer talked at $80/mt. CFR Brazil spot PP prices were up $20/mt for both homopolymer and copolymer grades. PP homopolymer was assessed Wednesday at $860-$880/mt, while PP copolymer was assessed at $910-$930/mt.
**CFR West Coast of South America spot import PVC prices were assessed Wednesday $30/mt higher week on week at $625-$635/mt, while CFR Brazil spot import PVC prices were assessed $10/mt higher week on week at $675-$685/mt Wednesday.
Aromatics
**Platts assessed US spot MTBE 5.50 cents/gal lower at 70.50 cents/gal FOB USG, based on a trade seen during the Platts Market on Close assessment process. LyondellBasell bought 25,000 barrels of May 23-27 loading MTBE from Gunvor at 70.50 cents/gal on an FOB USG basis.
**Platts assessed front-month (May) spot methanol 0.50 cent/gal lower at 55 cents/gal FOB USG based on market indications. Second-month (June) spot methanol was also assessed 0.50 cent/gal lower at 56.50 cents/gal FOB USG, staying at a 1.50 cent/gal premium to the front-month value.
**US isopropyl alcohol was assessed higher on May 12, in line with indications of general price strength for spot volumes heard in the market. May IPA was assessed $210/mt higher at $2,860/mt FOB USG and $2,920/mt DER, moving a quarter of the way higher with market indications pegging the prompt value at $3,500/mt.
**Prompt and forward-month toluene prices were assessed 5 cents higher day on day at 119 cents/gal FOB USG Friday. Mixed xylene prices also moved higher Friday, with May and June pricing assessed 6 cents higher at 123 cents/gal and 124 cents/gal, respectively. Downstream, paraxylene prices moved higher as well, increasing $20 day on day to be assessed at $440/mt FOB USG.
TRADE FLOWS & SUPPLY
**North American polypropylene exports fell 6% month on month in April, preliminary data released by the American Chemistry Council showed May 12. Exports stood at 37.6 million lb, down more than 2.4 million lb from over 40 million lb in March.
**Colombia's state-controlled oil giant Ecopetrol's shipment of petrochemical and industrial materials rose 9.8% year on year to 24,700 mt in Q1, the company said May 12.
**Brazilian imports of PP homopolymer products in April fell 31% year on year to 13,538 mt, Ministry of Development and Foreign Trade data showed May 11. The imports were valued at $15.4 million FOB, compared with a year-ago value of $24.9 million FOB for the 19,590 mt imported. Colombia was the leading exporter to Brazil, with 3,987 mt, followed by Saudi Arabia with 3,007 mt and Argentina with 2,594 mt.
**Brazilian exports of PP homopolymer products fell 13% year on year in April to 18,503 mt. The exports were valued at $16.2 million FOB. A year earlier, 21,291 mt exported was valued at $23.1 million FOB. During April, the leading importer from Brazil was Argentina with 3,447 mt, followed by Italy with 2,585 mt, and the US with 1,650 mt.
**Brazilian exports of benzene stood at 2,660 mt in April, down 80.7% year on year and 74.9% month on month, data from the Ministry of Development and Foreign Trade showed. The exports were valued at $1.56 million FOB, while a year earlier, a volume of 13,775 mt of benzene exported during the same period was valued at $7.75 million FOB. Brazilian exports of toluene in April rose 50.1% year on year to 3,834 mt, but fell 46.3% month on month. The exports were valued at $1.95 million FOB.
**Brazilian imports of LLDPE products in April rose 17% year on year to 51,350 mt, Ministry of Development and Foreign Trade data showed. Imports were valued at $45 million FOB. A year earlier, the 44,050 mt imported was valued at $47.4 million.
**Brazilian imports of LDPE products in April rose 38% year on year to 15,707 mt, Ministry of Development and Foreign Trade data showed. Imports were valued at $15.4 million FOB. A year earlier, the 11,391 mt imported was valued at $12.6 million, which means LDPE imports last month were cheaper than those in April 2019.
**Brazilian imports of HDPE products in April rose 42% year on year to 29,411 mt, Ministry of Development and Foreign Trade data showed. Imports were valued at $23.5 million FOB. A year earlier, the 20,769 mt imported was valued at $23.3 million. On average, import prices for HDPE products last month were 29% lower than in April 2019.
**Brazilian imports of PVC products in April tumbled 37% year on year to 20,520 mt, Ministry of Development and Foreign Trade data showed. Imports were valued at $19.5 million FOB. A year earlier, the 32,541 mt imported was valued at $29.4 million FOB.
**Brazilian imports of PP copolymer products in April dropped 22% year on year to 9,108 mt, Ministry of Development and Foreign Trade data showed. Imports were valued at $13.1 million FOB. A year earlier, the 11,601 mt imported was valued at $17.4 million FOB.
**North American LLDPE production in April dropped 8.8% compared with March's total, according to American Chemistry Council preliminary data released May 12. However, production was 21.7% higher in than the year-ago month.
**North American LDPE production in April fell 4.6% compared with March, according to ACC preliminary data. Production fell less than 1% compared with the year-ago month, the data showed. April production totaled about 636.633 million lb, down from about 667.576 million lb in March and 639.37 million lb in April 2019, according to the ACC.
**North American HDPE production in April dropped about 10% compared with March's total, according to ACC preliminary data. Production was also 6.2% less than the year-ago month, the data showed. April production totaled about 1.815 billion lb, down from about 2.013 billion lb in March and 1.935 billion lb in April 2019, according to the ACC.
**North American PVC production plunged 31.6% in April from March, reflecting a turnaround at a major Texas complex as well as reduced rates as pandemic-related shutdowns slashed demand, preliminary data from the ACC showed. April production surpassed 894 million lb, down from 1.308 billion lb in March and nearly 1.202 billion lb in April 2019, the data showed.
**LyondellBasell's Patel said Friday the company has been hampered on exporting more PE to China during the ramp-up of its new 550,000 mt/year HDPE plant in Texas because China sees limited export demand for finished goods made with imported resin as international markets slowly emerge from pandemic-related lockdowns.
