Factbox: Commodity markets affected by Europe's automotive industry

Commodity markets have been significantly affected since mid-March by the challenges faced by Europe's automotive industry during the coronavirus pandemic.

With countries starting to soften lockdown measures, the recovery of Europe's automotive-related and transport fuel segments was expected to be slow and gradual.

INFRASTRUCTURE & TRADE FLOWS

• Water levels in Kaub, a key choke-point on the Rhine, have been falling since May, reaching 107 cm on June 3, down from above 150 cm a month ago, data from the German waterways authority showed
• Turkish polymer buyers have been shunning rail transport from Iran due to the long lay-time
• Nigerian interstate border closures were limiting polymer trade despite exemptions for delivery logistics
• Increased Iranian polymer levels were expected in Turkey with further border crossings set to open in coming weeks

DEMAND

• European polypropylene producers share concerns on growing PP copol inventories as demand from the automotive industry remains depressed
• Europe's oxo-alcohols industry is braced for continued demand losses until next year, with a lack of new car sales expected to halt the recovery of the auto sector
• European oxo-alcohols producers' margins continue to thin, as upstream June CP increases are not met by demand, amid the weak automotive
• Russian methanol demand from MTBE has picked up, with spot prices recovering from multi-year lows
• Solvent blending markets see recovery on higher underlying upstream markets

PRICES

• Gasoline blendstocks MTBE and ETBE premiums over Eurobob gasoline has been steady in recent sessions, despite the gains in Eurobob, capped by the narrower gasoline-naphtha spread
• European toluene and MX premiums to Eurobob gasoline fell $5/mt on June 3, on the back of further demand weakening and limited possibilities for any improvements
• High supply in both toluene and MX markets
• June contract price for European toluene settled at $375/mt, up $89.50/mt from May's average.
• European ethyl and butyl acetate prices fell Eur80/mt and Eur50/mt, respectively from the last week of May to the first week of June, with the tepid demand from the automotive industry pointed as the main driver for the price pressure
• Turkish sources unclear on the extent of PE and PP price rises with sellers reluctant to confirm offer levels