US ethylene participants are expected to confirm a marketwide settlement for the October ethylene contract on Monday. There was no confirmation of a marketwide contract settlement on Friday, but trade participants had reported some settlements at a 2.50 cent/lb decline from September. A 2.50-cent decline would take October ethylene contracts to 31.25 cents/lb. Meanwhile, trade sources have said Chevron Phillips's Port Arthur, Texas, facility, should be back online heading into this week, following a 60-day turnaround. In the propylene market, with all three propane dehydrogenation units in the US, inventory is expected to continue growing. Downstream, no other polypropylene producers have come out with price increases for November. Braskem America said in October it will apply a 2 cents/lb ($44/mt) increase in addition to any change in pricing for feedstock polymer-grade propylene (PGP) between October and November, but trade sources have said the market may not accept the increase as propylene prices have come down. However, LyondellBasell said it will implement a 3 cents/lb price increase for all North American polypropylene products sold, effective December 1, according to a letter obtained Friday by S&P Global Platts. The letter, which was dated November 1, said the company will implement the price adjustment for all PP products, in alignment with any published changes in US Gulf Coast propylene monomer prices for December as compared with November.
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US benzene prices were expected to remain soft amid continued weak derivative demand from the styrene segment as well as on the back of recent pressure by a softer energy complex. Buy interest was likely to remain scant in the face of sharply falling prices, sources said. US benzene prices were hovering at a 19-month low to start the week and were expected to post continued declines. Sources anticipated that this would put continued pressure on softening styrene prices, which were last talked at near $1,010/mt FOB USG. Toluene prices were last assessed at 262 cents/gal and sources said that demand would likely continue to come via MSTDP margins, which benefited from a rollover in the October paraxylene contract. US xylene prices were expected to be flat to lower as recent declines seen in the other aromatics were somewhat offset by an increase in mixed and paraxylene exports out of the US in October and November.
Toluene and xylene pricing is unlikely to rise this week as it tracks a US market where buying interest has been absent, sources said. Friday saw FOB Brazil pricing for toluene fall to 3.5-month low while the xylene assessment dipped to a three-month low, as both were pressured by relatively soft demand in the US, sources said.
Polyethylene market players enter the first full week of November with an eye on producer strategies and looking for additional direction from the impending release of October output and sales statistics, sources said. After September's data from the American Chemistry Council showed reduced output sales for US and Canadian producers, and considering consistent feedback of a bearish market in October, buyers in the region are heard to be digging in for a price floor as we enter what is typically a destocking season, sources have said. Most US producers have proposed 3 cents/lb price hikes on the table for each of November and December, but market feedback has pointed to neither having much support after a similar increase was rejected in October, sources have said.
US export PVC pricing for November was expected to settle this week after protracted negotiations. A producer had nominated November pricing up $20/mt from October levels, in a range of $790-$805/mt FAS Houston, while others had offers at rollover levels of $765/mt and $760/mt. As of October 31, talks were largely quiet, with buyers pushing for lower pricing while producers resisted pressure to reduce. However, market sources say global demand remained soft in key markets such as North Africa, the Middle East, Europe and Asia, though the CFR India price rose $5/mt to $905/mt on a CFR basis as demand inched up. A source said activity appeared to be picking up, though buyers still pushed for bargain prices that would require further price reductions from US producers unwilling to comply. Shintech was expected to wrap up its turnaround at its Plaquemine, Louisiana, complex in the coming days, but OxyChem had a turnaround coming up in late November at its Pasadena, Texas, operations, that was expected to further limit export volume availability.
PE buyers in Brazil could be poised to show more of an appetite in November as consumer confidence improves and the nation's currency maintains recent gains in the wake of far-right candidate Jair Bolsonaro being elected president in late October, sources have said. Buying for much of the third quarter was subdued due to seasonal slowdowns and a weak Brazilian real, but activity has slowly picked up as the currency has strengthened by 11.6% since its valuation against the US dollar reached its weakest point in 2018 at 4.1807 on September 18, according to feedback from sources and S&P Global Platts data. Additionally, import pricing could face pressure from local producer Braskem, who was heard lowering domestic PE pricing by Real 400-500/mt ($108-$135/mt), sources have said, adding that the reductions could also serve to help the company destock after months of weak sales. Braskem representatives have not responded to a request for confirmation at those levels. Along South America's Pacific Coast, PE buyers enter November looking for additional discounts on US-origin offers in the wake of US producers scrapping a 3 cents/lb hike and instead rolling over on domestic contract pricing in October, sources said. WCSA market players have termed current conditions a "buyer's market," while indicating restocking might not occur until December on the expectation further reductions could be in store through the end of the year.