Trading was off to a delayed start Tuesday due to the US Presidents Day holiday. Markets are seeing generally bearish or neutral trading sentiment.
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POLYETHYLENE: Market participants saw stable export pricing for polyethylene in the second half of last week amid unchanged rail car pricing. Some grades were expected to remain tight amid limited availability including for low density PE, linear LDPE butene and high density PE film. Pricing was firm to higher across the three grades. PE export prices are expected to rise as sources had been seeing higher prices from suppliers. Domestic players are also facing a 4 cent increase on all PE grades and were heard to be implementing increases for customers. Most offices were expected to be closed Monday in observance of Presidents Day, shortening the buying week.
LATIN POLYMERS: The Brazilian PE market is expected to see little change in prices in the coming week due to US market stability, while polypropylene prices are expected to follow Asian prices lower. Domestic delivered markets are expected to see prices with no discounts available during the week. The approach of the Carnival holiday at the end of the week is expected to put business on hold in Brazil at least until the end of next week. On the west coast of South America, spot PE import prices are also expected to be steady this week, with the US market also the key factor, while the picture is cloudier for PP as Asian prices fell while the US market held steady. In Mercosur, spot prices are expected to be stable in February, but the Carnival holiday could impact deliveries in the following two weeks, with local players expecting new price lists for March bookings only. In Argentina, distributors expect to receive new pricing lists for March after minimal change in the past few weeks. No increases have been announced since mid-January.
VINYLS: US PVC prices are expected to remain in the settled February range of $835-$845/mt FAS Houston this week, although some producers were heard to be seeking higher prices for incremental volumes. Last week a deal was heard done at $870/mt FAS, but was not yet seen as repeatable. A producer also was heard offering incremental volumes at $880-$900/mt FAS, but buyers were resisting that level. Market sources said prices could inch up if more deals at levels higher than the settled range are concluded. Supply has been seen as tight with one PVC turnaround underway, another slated to start in March and some operational issues that have further squeezed output. Upstream, spot export ethylene dichloride prices could rise this week with export volume availability seen to be shrinking. Caustic soda prices that have hovered at $200/mt FOB USG, the lowest level since February 2010, have prompted integrated producers to eschew exports and keep EDC output internal for downstream PVC production, reducing volumes that could be designated for export.
OLEFINS: US spot propylene is expected to remain stable at around 29 cents/lb this week. February US polymer-grade propylene contracts were heard settling 1 cent lower at 32 cents/lb, trade participants said February 12. This comes after the Energy Information Administration said domestic propylene inventory had fallen for four consecutive weeks, decreasing 18,000 barrels week on week to 5.451 million barrels in the week that ended February 7. US spot ethylene has continued its downward trend, trading at 15 cents/lb Monday, sources said. Spot ethylene was last lower July 23, according to S&P Global Platts data. Trade sources continue to attribute the fall in pricing to a glut of supply.
AROMATICS: Aromatics supply in North America was expected to remain tight amid ongoing maintenance by multiple US producers amid tepid demand. Mixed xylene demand was expected to remain soft from the downstream paraxylene segment amid soft pricing and talk of increased imports in the second half of March and into April. Toluene consumption was expected to remain steady, with demand from STDP units healthy amid positive contract margins. There remained some questions as to whether or not this would be sustainable amid expectations of a higher benzene contract price and anticipated declines in paraxylene. Blend values rose week on week and sources anticipate increased seasonal demand from the octane segment in March and April.