AMERICAS: The week ahead in petrochemicals

US OLEFINS

Continued outages have led to prolonged price increases in the US. After a short-lived restart heard at LyondellBasell's La Porte cracker, market sources July 23 said that the facility was back offline.

The LyondellBasell and Sasol joint venture 1.5 million mt/year cracker was also heard to still be offline. Market indications July 26 pointed to more price increases, which sources said could possibly be attributed to end-of-the-month price rises, as well as the outages.

US VINYLS

US export polyvinyl chloride prices could rise the week starting July 26 as market participants await fresh offers for August volumes. Sources said those volumes would be limited, as they have been throughout 2021, amid continued strong domestic demand and operational issues that have constrained output. Shintech, the largest US PVC producer, has resumed normal rates at its Plaquemine, Louisiana, complex as of July 26, having replaced a lightning- and fire-damaged transformer, according to sources familiar with company operations. Lightning hit one of two transformers at the complex on July 2, prompting the company to shut down multiple plants. Those plants were slowly restarted days later, but operated at reduced rates until the company could replace the transformer. Upstream, Westlake Chemical in mid-July lifted two force majeures declared in June at chlor-alkali units in Natrium, West Virginia, and Longview, Washington, and was working to clear order backlogs, having restored normal output, according to sources familiar with company operations. Olin, the world's largest chlor-alkali producer, declared force majeure July 20 on all products manufactured at its McIntosh, Alabama, chlor-alkali plant, according to a customer letter seen by S&P Global Platts, which further tightening already snug US chlorine and caustic soda supply, market sources said. None of the companies responded to requests for comment.

US AROMATICS

US nitration-grade toluene is expected to continue trending higher during the latter part of the month, with stable to stronger gasoline blending demand seen in the market. At the same time, stronger benzene prices could continue to add price support to NGT spot values, although conversion margins have corrected lower in recent weeks. Spot mixed xylenes prices are also expected to move higher in line with stronger gasoline futures prices and stronger blending demand as an octane-boosting component.

US METHANOL & MTBE

With the YCI Methanol One facility heard to be in production, market participants have said they expect the market will reflect the added supply in the near term, with price decreases expected. However, market sources have pointed to outages across the globe, as well as decreased demand stemming from new surges of the coronavirus. Market sources have also described the market as quiet and anticipate that the upcoming European holidays will contribute to stagnant market activity.

In the US MTBE market, prices are expected to be stable to stronger, with gasoline futures likely to continue to hold to strong levels on increased summer driving demand. Export demand is also likely to strengthen moving further into August, with stable demand expected to Mexico.