AMERICAS: The week ahead in petrochemicals

US OLEFINS: Spot polymer-grade propylene prices are expected to remain stable to higher this week despite Dow's propane dehydrogenation unit maintenance.

Dow's 750,000 mt/year PDH unit in Freeport, Texas will undergo maintenance for the next 60-90 days, sources said May 19. The domestic May PGP contract settled 13 cents higher on the month at 70 cents/lb May 24, according to sources. Prompt spot refinery-grade propylene is expected to remain at an 11-month low of 14 cents/lb this week or fall slightly with higher refinery utilization rates.

US POLYMERS: Spot export US polyethylene prices are expected to decrease as sources await fresh pricing for June. PE producers are expected to announce allocations towards the end of next week for US PE pricing, sources said. "US prices will have to come down substantially to have any possibility for exports. Most overseas markets have found competitive alternatives to the US. I think some of these replacements are here to stay," one trader source said. Separately, domestic PE contracts remained stable on the week May 19 after increasing for the April settlement on May 5, based on higher pricing being pushed by producers, sources said. Meanwhile, US polypropylene market participants are expected to see firm to potentially higher pricing, amid talk of higher monomer pricing on the month and announced PP supplier hikes announced for June. Tightened supply has also minimized export opportunities, market sources have said. S&P Global Platts assessed the export homopolymer injection-grade polypropylene flat on the day May 21 at $2,238-$2,260/mt (101.5-102.5 cents/lb) FAS Houston basis. Railcar pricing was talked around the 99 cents/lb level. Still there is talk of pricing continuing to climb in the short term, market participants said.

US VINYLS: US spot export polyvinyl chloride prices were expected to hold steady the week of May 24 as the market looks toward Asia for pricing direction. Asian producers were expected to announce fresh June offers the week of May 24, later than usual, amid a demand decline in India amid its widespread COVID-19 infection surge. US export PVC prices have declined $80/mt since April 28 amid market pressure to sell parcels at prices that are workable in markets outside of Latin America, such as North Africa and Europe. Upstream, both export and domestic caustic soda prices could rise after Formosa Plastics USA shut its Texas chlor-alkali facility after it was flooded by heavy rain and declared force majeure May 19 on chlor-alkali products. Formosa on April 26 had lifted its force majeure on chlor-alkali products that was declared the week of Feb. 15 when sustained subfreezing temperatures hit the US Gulf Coast and much of the US.

US METHANOL & MTBE: US spot methanol prices have remained rangebound following a week of increased trading activity. Though one market source indicated that US demand is at its seasonable peak, further upticks in prices are not currently expected, as sources expect prices to decrease as new capacity comes online. The YCI Methanol One facility is still expected to begin production in the near-term. May volumes are heard to be sold out, and offers for June have remained steady over the past several days. Offers have been heard for Q3 for 10,000 barrels/month, indicating continued anticipation of a flat forward curve.

MTBE prices are expected to be stable to slightly weaker, with talk of production having returned to the market from two regional facilities that had been heard to have been running at reduced rates. At the same time, export demand to Latin America has been talked as flat to weaker, contributing downward pricing pressure to spot MTBE prices.

LATIN AMERICA: Latin polymers prices are expected to be stable to lower this week for polyethylenes driven by more availability from the US and continuous lower Asian prices, and also expects lower values for polypropylenes in the imports markets of Brazil and the West Coast of South America, driven by offers from Asia and Middle East. The Latin American region had been mostly relying on imports from Europe and Asia since early March as the US was having very limited volumes for exports, which opened a window of opportunity for Asian markets to stablish more competitive offers than the US. However, since mid-May more US material became available for the region, still at higher values than Asian material. Markets are dividing its expectations to see if US prices summed with freight would be more competitive than Asian products considering freight. The US is generally the most important supplier of polyethylene for the region, while Middle East and Asia for polypropylene. In Brazil, local producer already announced prices for May bookings, so expectation is for flat prices for the week as players await for June new pricing list. All prices are already at the historical all time high for all PE in Real and US dollars.

Polypropylene prices are expected to be flat to lower for the week with offers on the sea from Asia, while lower prices are beginning to be seeing from local producers in Latin America. Brazil and the West Coast of South America imports mostly come from Asia and the Middle East if compared to the US. The PVC market in Latin America expects to also see flat to lower prices on week. Most Latin American countries have poor demand at the moment, leaded by Brazil with buying interest very low. WCSA is currently seeing higher prices than Brazil, unusual for the market due to poor Brazilian demand. In Mercosur, prices for May bookings were settled in the beginning of the month, so a new pricing list is expected for June. In Argentina, prices are expected to be flat on week, while many sources believe the local producer could try to push increases following hike letters in the US markets from producers.