Americas petrochemicals outlook, w/c May 3

US olefins

US spot polymer-grade propylene is expected to continue rising in the week on strong downstream polypropylene demand, sources said.

US spot ethylene is expected to continue falling amid steam cracker restarts. Domestic April ethylene contracts are expected to settle at a 1 cent increase in the week, according to sources.

US vinyls

US polyvinyl chloride prices are expected to hover in a range of $1,745-$1,750/mt FAS Houston, having fallen $50/mt from an all-time high of $1,800/mt on April 28. A producer nominated prices at $1,750/mt FAS on April 27, having noted lower pricing in Asia and sharply reduced demand in India due to a COVID-19 outbreak. US PVC supply remains tight as producers work to clear order backlogs and restock depleted inventories, but market participants had expected prices to retreat given pushback from end-users, who said they can no longer pass along record-high prices to customers. Formosa Plastics USA was slated to launch a turnaround at its 513,000 mt/year PVC unit at Baton Rouge, Louisiana, the week of May 3. Westlake Chemical had a turnaround on tap for the three chlor-alkali plants at its Lake Charles, Louisiana, complex for mid-May to mid-June, which was expected to reduce its downstream production.

US aromatics

US toluene prices are expected to remain firm in the week amid ongoing tightness, healthy demand from conversion units, and strengthening blend values. STDP margins were sharply lower during second-half April as benzene slipped but remained strong, last seen at near $121/mt. Additionally, sources anticipated continued strength in blend values, which were last estimated at near 251 cents/gal. Xylenes prices were expected to see little change with movement in the mixed xylenes market tracing RBOB futures amid relative softness in paraxylene. Benzene prices are expected to find direction in the week following sharp declines in pricing during the last week of April. Derivative demand from the styrene segment was expected to be tied to European pricing, which posted sharp declines April 30. The spread between the two regions was expected to dictate any continued exports out of the US.

US methanol, MTBE

US spot methanol prices are expected to be rangebound to weaker, with the return of some regional supply in Louisiana and Trinidad helping balance out the market, according to sources. Demand continued to be talked as robust, potentially limiting any price declines resulting from higher available prompt supply. In the US MTBE market, prices are expected to be stable to stronger on favorable blending economics in comparison with other pricier octane boosting components commonly exported to Mexico and Latin America for gasoline blending. Favorable production margins for MTBE and resulting higher regional production could serve to limit any price increase as a result of renewed export demand.