Spot propylene is expected to continue its decline as market participants await the startup of Dow Chemical's 750,000 mt/year propane dehydrogenation unit in Freeport, Texas.
OLEFINS
Despite maintenance work at two PDH units this quarter, spot polymer-grade propylene has shown some weakness, shedding 4 cents/lb since mid-June, according to S&P Global Platts data.
Sources have attributed the decline to weak downstream demand and as Flint Hills Resources' PDH unit continues to ramp up operating rates following a planned turnaround.
Spot ethylene also has been on the decline, shedding 12.125 cents/lb since early May, according to Platts data. Sources attributed the lower pricing to healthy run rates at US Gulf Coast steam crackers, coupled with storage issues at a well in the USGC region. The healthy run rates stem from no ongoing maintenance at USGC crackers.
POLYMERS
There were growing expectations that domestic polyethylene prices could roll over for July, with some producers heard pushing for an additional increase of 3 cents/lb in August.
Spot export prices have been stable to firmer in the first half of July amid ongoing tightness, and market sources have been hesitant to take strong positions at current prices given the expectation for new capacity to begin coming online later in Q3.
Formosa Plastics Corporation USA has restarted its polypropylene units and was working Friday to restart the final polyethylene line at its Point Comfort, Texas, petrochemical complex, the company said. Company spokesman Steve Rice said that all lines were running, or "scheduled to be so very soon."
Rice said there was no timeline yet for lifting the force majeure on polypropylene or polyethylene sales from the plant. Expectations from market participants with knowledge of the situation have ranged from another week to through August.
LATIN POLYMERS
Buyers in key South American markets could continue to see higher offer levels on US-origin polyethylene resin from importers, who have been citing August increase letters from US producers for recent upward pressure on pricing, sources said.
Some buyers, however, have balked at higher prices in July, buying smaller volumes from local producers while waiting for competitive offers from other regions such as the Middle East and Asia, both of which have been dealing with weak demand in the second and third quarters of 2017, sources said.
Demand for PVC should continue at lower levels normal for the season, sources have said, adding that pricing has been relatively stable this month.
Polypropylene import prices could firm to close out July after remaining stable last week, sources said, adding that proposed August increases from US producers could apply pressure.
After lowering LDPE prices while maintaining stable prices on all the grades of PE and PP in the domestic market, Brazilian producer Braskem was heard rolling over prices across the board this week, sources said. Braskem did not immediately respond to a request for comment on pricing.
Dow Chemical, meanwhile, raised pricing by 3 cents/lb ($66/mt) on all grades of PE sold in South America's Andean region, the Caribbean, and in Central America, according to a letter to customers obtained last week by S&P Global Platts.
US AROMATICS
US aromatics prices posted gains on energy, and toluene-fed chemical production margins benefited as a result.
Hydrodealkylation margins gained just over $6.50 week on week to close at $26.99/mt, while toluene disproportionation (TDP) and Mobil selective toluene disproportionation (MSTDP) margins posted stronger gains, rising $18.37 and $26.86 to finish the week at $120.17/mt and $93.03/mt, respectively. The gains were a function of increases in benzene and MX as well as relatively steady toluene prices.
Blend values rose on stronger demand and were estimated near 200 cents/gal as of close of business Friday, 2 cents above the nitration-grade assessment and 7.5 cents above the commercial-grade assessment.
Mixed-xylene prices maintained a 3-cent premium to blend value as of close of business Friday. There was brief demand to send MX east, but that demand fizzled and prices continued to be supported by blend demand.
US METHANOL
Spot pricing has been mostly stable in recent weeks, with market activity talked slower following July contract announcements from US producers Methanex and Southern Chemical Corp., both of which cut July prices by 3 cents to 113 cents/gal and 108 cents/gal, respectively.
Spot pricing has been talked around a 20% discount to contract values, sources said. Methanol traded at 88 cents/gal FOB USG last week, with offers levels continuing to be heard late last week at 90 cents/gal FOB USG.
