AMERICAS: The week ahead in petrochemicals

US OLEFINS

Spot ethylene and propylene prices are expected to remain high the week beginning Aug. 9 amid supply constraints due to multiple cracker outages.

Trading activity heard the morning of Aug. 9 showed little to no change over the weekend, with prices expected to be stable or higher until such supply tightness is relaxed.

US POLYMERS

US domestic polyethylene prices could rise the week of Aug. 9 after protracted discussions of 5 cents/lb price increases announced by producers. Talks were heard to have been somewhat contentious, lasting longer than typical. Export PE pricing could remain stable, with HDPE volume availability seen particularly tight. Producers expect supply tightness to last through the rest of 2021. Export polypropylene prices remained largely notional given the continued lack of export volume availability as demand has consistently outstripped supply throughout 2021.

Spot homopolymer polypropylene is expected to rise this week as continued supply tightness pushes prices higher, sources said. Pricing is expected to continue to rise in the short term amid ongoing supply tightness and proposed supplier increases for August, sources said.

Some market players were expecting prices to come down in August, but with the increase in monomer pricing, PP prices are now expected to be higher this month, one source said. Supply is currently so limited from the freeze in February coupled with shutdowns in 2020, that producers are playing catch-up, the source added. With the tight supply and increasing demand not even big buyers are getting additional pounds, leading to a lack of spot sales, the source said.

US VINYLS

US export polyvinyl chloride prices could increase the week of Aug. 9 amid negotiations for some September volumes. Supply remains tight, and the domestic market is mulling price increases announced for August by all four producers. OxyChem, Westlake Chemical and Formosa Plastics USA are seeking 4 cents/lb for August, while Shintech announced 2 cents/lb for August and 2 cents/lb for September. Upstream, export ethylene dichloride market activity was seen thin, while caustic soda prices had eased from earlier highs.

US METHANOL

Constrained supply is expected to continue to affect the US methanol market, with continued outages heard at the Natgasoline facility in Beaumont, Texas, the YCI Methanol One facility in St. James, Louisiana, and LyondellBasell's La Porte, Texas acetyls facility. Sources indicated that the combination of US and European supply constraints were causing global supply tightness. The week ended Aug. 6 had few pricing indications, with one source saying the lack of spot market indications could be attributed to balanced market fundamentals. The source said that when this occurred there were few offers and buyers not wanting to show their bids. Sources the morning of Aug. 9 said pricing indications had seen little to no change over the weekend, with prices expected to remain high until supply tightness is alleviated.