London — OLEFINS: The European ethylene market looks set to remain balanced with downstream issues continuing this week. The impact from outages at Shell's Moerdjik and Dow's Boehlen are yet to be seen fully by the market. The Easter holidays will keep the propylene market muted, with supply remaining healthy while the market starts preparing for the beginning of the planned turnaround season. The butadiene market will be eyeing developments in Malaysia, where last week's explosion and fire at the Pengerang Integrated Complex left traders uncertain about the direction of the Asian butadiene and derivatives markets.
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POLYMERS: Outages in the PVC market limiting availability are expected to have little pricing impact, with weak Turkish and general European demand expected to be in balance with tighter supply. Turkish prices are likely to fall due to the poor economic outlook there. Increased buying activity could be seen for PET this week ahead of the Easter holiday and converters shutting down their lines. Some producers, however, worry still that demand is not reaching its seasonal highs and supply from outside of the region is keeping pricing low. Polystyrene demand is set to remain weak following stock building activity in previous months. Production shutdowns are also expected in line with Easter. ABS market participants continue to monitor the acrylonitrile market following Ineos's force majeure at multiple sites. Competitive offers continue to be heard from South Korea, putting pressure on European producers.
AROMATICS: As mixed xylene supply begins to build up in the region, and with petrochemicals demand persistently low, sellers will be looking to offload material wherever they can this week. Gasoline blending should continue to provide a demand floor. After last week's sharp price rise, European orthoxylene traders will be awaiting further news on the Lotte Chemical 3,000 mt sell tender launched at the end of last week. If the cargo heads to Europe, it will be a much needed source of supply, with European production still low. Styrene buying interest continues this week amid global plant turnarounds. Shell is expected to begin maintenance on its 450,000 mt/year propylene oxide/styrene monomer unit at Moerdijk. With toluene prices remaining steady in Europe and US prices on the rise, the arbitrage to the US seems more and more workable on paper. Few European players seem ready to take advantage, however.
METHANOL/MTBE: The buying interest recently seen in the European MTBE market is expected to continue as demand remains healthy, due to bullish Eurobob gasoline. The wide spread between gasoline and naphtha will continue to drive demand for high-octane blend components. The methanol arbitrage to the US has closed, but recent exports should have cleared the length and the European market might see a more upbeat sentiment. Rising crude oil prices will also support economics, providing further upside to the methanol market.
OTHER: Several caustic soda plants are expected to reduce volumes for maintenance, though Q2 contract prices are expected to fall significantly. Ineos's ACN plant in Seal Sands, UK, is expected to stabilize its production after last week's restart.