Coronavirus affecting EMEA petrochemicals markets

New York — The coronavirus pandemic and the restrictions on movement that have followed continue to pose fresh challenges to the European petrochemical industry and the wider EMEA region.

Supply-chain concerns in Europe continue to rise and market players are faced with the prospect of cutting rates regardless of margins. Talks of end product production closures are expected to feedback into feedstock petrochemicals in the coming months.

"Europe currently has the lowest cost of ethylene production in the world based on cracking naphtha feedstocks," senior manager for Petrochemical Analytics at S&P Global Platts, Rob Stier, said. "However, these high margin are not expected to last much longer as buyers and sellers have to face reality in April and fix prices."

Below are the latest facts.

Infrastructure:

**Recycled plastic sustainability initiatives press ahead despite coronavirus' impact

**French recycling market sees 35% reduction in sorting operations; plans to reopen in coming weeks, source says.

**Turkish polypropylene fiber sector hit by shutdown of carpet market.

**Sales of road fuels by the UK's largest fuel retailer Tesco, dive 70% on corona-virus-related travel curbs.

Trade flows:

**Butadiene arbitrage between Europe and Asia closing due to falling prices in Asia as an influx of European cargoes arrives.

** Strong demand in Turkey for HDPE blow molding grade from medical and cleaning sector.

**Spot discounts widening in European ethylene market as suppliers seek export opportunities.

**Aggressive PP offers heard into West Africa from the Middle East, South Korea and China.

**Trade slow across North Africa on reduced payment terms and slower logistics.

**European caustic soda market seeking imports from Middle East and US as domestic spot supply dries up.

Prices:

**European naphtha crack spread falls to eight-year low on lack of demand.

**European MTBE price falls another 6.5% on day on bearish fundamentals for gasoline components.

**Toluene market oversupplied; run rate reductions expected.

**European paraxylene falls to 18-year low on bearish sentiment.

**European benzene loses support as arbitrage window to US closes.

**Sellers retreat from styrene market despite abundance of material.

**Polypropylene producers not fully tracking drop in monomer prices.

**EPS producers push for rollover of contract price into April despite March feedstock rout.

**PVC market takes a wait-and-see approach until after the Easter break to finalize the April contract price and will take direction from lockdown policies.