OLEFINS: US Gulf Coast spot ethylene is expected to remain stable to higher the week starting Nov. 16 amid stronger upstream ethane.
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Spot polymer-grade propylene is expected to continue climbing amid tight supply. November spot PGP finished at 38 cents/lb FD USG on Nov. 13. Refinery-grade propylene is expected to continue its stable trend at 17.25 cents/lb FD USG.
POLYMERS: US polyethylene spot export prices are expected to decline this week as the market continues to face weak demand and correct previous highs. Sources expect pricing to continue to decline as the US market trends down to compete with other foreign markets. "Prices are confusing now," one trader source said in response to hearing a wide range of pricing in the market. In domestic markets, contracts were flat after rolling over Oct. 28, based on demand slowing and suppliers trying to keep the market stable, one source said.
AROMATICS: Continued supply tightness and downstream demand from styrene monomer, MDI, phenol and acetone were expected to continue supporting spot benzene prices, which closed out the previous week at a new eight-month high of 199 cents/gal DDP USG for prompt delivery. Liquidity is expected to be encouraged by the ongoing December contract price trading period, the beginning of which saw more than 200,000 barrels trade on Nov. 13, boosting prices 18 cents in one day. Styrene prices were also expected to continue rising in the short term, maintaining a month-long trend of growth amid global undersupply and unplanned outages in Asia. Prompt styrene reached a new 18-month high Nov. 13 at $960/mt FOB USG for prompt loading.
Backwardated pricing in toluene and mixed xylenes was expected to continue as major producer Citgo was heard to be preparing offers for its first on-spec mixed xylenes at its Lake Charles refinery since late summer. The outlook for toluene is seen as slightly more bullish than for mixed xylenes, given possible upticks in demand for conversion into benzene amid recent upticks in prices. On the other hand, no upticks in support are on the horizon for mixed xylenes, as downstream US paraxylene producers continue to run at low rates and end-users source material from overseas rather than produce or buy in the US.
METHANOL & MTBE: Supply in the US methanol market is anticipated to remain tight this week with a major turnaround heard to be ongoing at a production facility in Geismar, Louisiana. Demand continues to be talked as healthy to stronger from the formaldehyde sector and for use in other winter applications. In the US MTBE market, participants are expecting prices to be stable to stronger, with some supply tightness having been seen late in the week ended Nov. 13.
LATIN AMERICA: Latin polymers are expected to see some downtrend in the imports markets of Brazil and the West Coast of South America, following drops in the US market. The foreign exchange rate started the week most unfavorable to the Brazilian real at 5.42/$1 on Nov. 16. New domestic prices were announced in the beginning of the month, with no more expectation of further increases during the week. Polypropylene prices are expected to be stable to higher on week, following hikes coming from Asia and Middle East - Brazil and the West Coast of South America imports mostly come from Asia and Middle-East if compared to the US.
In the WCSA, spot import polyethylene prices are also expected to continue to be highly attached to the US movements over the week. The PVC market in Latin America is expecting to continue seeing higher prices in the market as reflection of higher Asian and European values, linked to imports into Brazil, while US prices, most attached to the WCSA, will be also higher on week. Product is still unavailable in most of the markets – very limited availability from the US for exports, which could continue to drive prices higher.
In Mercosur, spot pricing is expected to be unchanged after receiving new higher prices last week. Some distributors said they were already sold out of material for November. In Argentina, prices are expected be unchanged for the week.