AMERICAS: The week ahead in petrochemicals

POLYMERS: US polyethylene spot export prices are expected to increase during the week starting Oct. 4 as PE producers continue to announce fresh October pricing.

Since producers have announced new pricing, there is some availability to offer but at extremely limited quantities, one trader source said. In domestic markets, US PE rose 5 cent/lb on the week Sept. 30 based on strong demand and limited supply, a separate source said. Meanwhile, in US polypropylene, the market is expected to remain firm following the upstream propylene contract price rollover settlement. Despite talk of expected increased resin supply on startups in October, participants still anticipate tight supply in the short term. Export players will also grapple will perceived higher price levels compared to global markets. Several key suppliers also have increases of 3-4 cents/lb on the table for the month. Uncertainty awaits the market as Q4 2020 gets underway.

OLEFINS: Spot ethylene is expected to be stable to lower later in the week amid cracker restarts. Spot polymer-grade propylene is expected to continue its stable trend despite downstream polypropylene plant restarts.

VINYLS: US export polyvinyl chloride prices are expected to be stable during the week in a range of $1,095-$1,105/mt FAS Houston, after sharply limited export volumes settled at $1,100/mt FAS. Those volumes were initially nominated at $1,150/mt FAS, but market participants pushed back, saying international demand was not strong enough to support that level. In addition, market sources expect PVC prices to soften in November and December when the force majeures declared in August by Formosa Plastics USA and Westlake Chemical will be lifted, and Shintech will finish a turnaround for October at its Plaquemine, Louisiana, complex. Upstream, however, producers were concerned that ramping up output too much could depress caustic soda prices, which have held at $230-$240/mt FOB USG since Aug. 25, according to S&P Global Platts data, with little activity seen. Sources said producers were reluctant to sell caustic soda at those prices, but eventually, they would have to begin selling volumes to prevent inventories from rising too high.

METHANOL & MTBE: US spot methanol prices are expected to be stable to higher during the week, with continued supply tightness and robust buying interest heard in the market. The first cargo of methanol to be exported from the CGCL production facility in Trinidad and Tobago is expected to fill in some of the domestic methanol supply gap, according to market sources. For MTBE, prices are expected to be stable to weaker in the week, with talk of some regional supply returning to the market.

LATIN AMERICA: Latin polymers are expected to see stability in the imports markets of Brazil and the West Coast of South America, with a possibility of increases in the domestic markets across the region. The foreign exchange rate started the week mostly unchanged to the Brazilian Real at 5.61/$1 on Oct. 5. Domestic prices are expected to be Real 900/mt higher for all polyethylene products, as announced by the local producer and anticipated by local distributors. Local sources continue to report lack of availability of some products in Brazil's domestic market.

Polypropylene prices are expected to be lower to stable on the week, following small decreases coming from Asia and the Middle East. Brazil and the West Coast of South America imports mostly come from Asia and the Middle East. In the domestic market of Brazil, the local producer announced an increase of Real 500/mt. In the WCSA, spot import polyethylene prices are expected to continue to track the US movements and are therefore expected to be up on the week, considering possible increases for October. Latin American prices could see a delay compared to US movements in a week or two, depending on availability of products in the market.

The PVC market in Latin America is expected to continue seeing higher prices in the market as reflection of higher European values, linked to imports into Brazil, and the US prices, most attached to the WCSA. Product was unavailable in most of the markets, with very limited availability from the US for exports, which could continue to drive prices higher. In the Mercosur region, the new spot pricing list was already expected for September bookings for several weeks. Distributors continued to report not having received new prices yet, though, due to null product availability in the market. October pricing list was also expected in the previous week, with market players expecting the situation to change only if products become available for the region. In Argentina, prices are expected be see higher values in the market for October. Distributors in the previous week anticipated possible increases of $110/mt for HDPE and LLDPE as well as $130/mt for LDPE, which are expected to have been official implemented.