US aromatics prices posted gains on the week amid declines in reformate pricing.
US AROMATICS
The spread between reformate and both toluene and mixed xylenes widened on the week, with both spreads finishing near 35 cents. Despite the attractive economics, sources said that the market for nitration grade toluene and mixed xylenes remained tight. Blend values finished the week near 200 cents/gal while the spread between blend value and reformate closed at near 24.50 cents.
Activity for high purity toluene was notably absent and most transactions seen in recent weeks have been for commercial-grade or product with a higher aromatics content.
Toluene demand could improve on the back of stronger benzene prices. October spot benzene prices rose 9 cents on the week, lending support to stronger TDP and MSTDP margins. TDP and MSTDP margins gained throughout last week and finished Friday at $70.11/mt and $50.97/mt respectively, according to Platts S&P Global data.
US benzene, last assessed at 275 cents/gal FOB USG and 274 cents/gal DDP USG for October, saw gains last week because of low imports from Asia and a stronger energy complex. Market participants expect these same dynamics to lead to higher pricing again this week as inventories continue to shrink.
Meanwhile, US styrene started to move higher late last week as Asia styrene prices started to rebound. Market participants have said pricing could continue that rebound this week as China reserves are still low and could lead to stronger demand for US product. US styrene was last assessed at 51.95 cents/lb ($1,145/mt) and 51.50 cents/lb ($1,135/mt), respectively, for October and November.
US OLEFINS
Spot ethylene pricing was heard rising late last week as the market saw a stronger buy interest from a producer, market sources said. As of Wednesday, ethane cracker margins had dropped 3.3 cents since October 6, and were calculated Wednesday at 19.89 cents/lb, according to S&P Global Platts data. When compared with the same time last year, the margin is 9.16 cents lower. On Friday, ethane cracker margins sat at 21.29 cents/lb, Platts data showed.
Meanwhile, October propylene contract negotiations continue, with market expectations between an increase 1 cent/lb to a decrease of 1 cent/lb, sources said. Spot PGP pricing has fallen 3.25 cents/lb since the start of the month, and sat Friday at 45 cents/lb FD USG. September PGP contracts were settled at 46.5 cents/lb, sources said.
US POLYMERS
There were strong expectations US polyethylene producers would be able to implement domestic increases announced for mid-October, with some suggestion from market participants that the increases -- which could potentially reach 10 cents/lb since August -- would be hard to maintain as new capacity comes online and post-Harvey activity returns to normal.
Export activity remains slow, with limited volumes available to traders due to strong domestic demand and a premium for rail cars in the US market. Sources have suggested export activity could remain slow into November, though other sources have said ongoing issues with butene, hexene and octene production from a major producer could limit production for multiple PE producers.
US PVC prices were flat last week amid bearish sentiment in Asia and lingering Hurricane Harvey-related force majeures at OxyVinyls and Formosa Plastics. However, Mexichem on Friday lifted its force majeure on PVC sold from its facilities in the US, Mexico and Colombia, so prices could decline with more supply reaching global markets when demand has been tepid, market sources have said. PVC was assessed $5/mt lower last week in China, Southeast Asia and India, and flat in Europe and Turkey. US market sources have said buyers were holding back in anticipation of lower prices in November.
Prices for ethylene dichloride and vinyl chloride monomer last week also were assessed flat as market players await pricing indications for November and producers had little incentive to reduce prices to workable levels without abundant supply availability. Also, OxyVinyls started a three-week EDC turnaround in Louisiana earlier this month, further reducing available spot supply for export, after Formosa Plastics and Olin had lifted force majeures on chlor-alkali.
LATIN POLYMERS
Polyethylene prices in Latin America were mostly stable last week after price increases in the past two months related to diminished supply from the US in the aftermath of Hurricane Harvey.
Some sources reported that product from the US is beginning to show up at lower prices -- at least in some grades. There is also expectation that prices should begin to drop at some point in the near-to-medium term because of new production expected to come online late this year and early next year in the US.
Amid this situation, Braskem has proposed increases of about $70/mt in Brazil, but some sources said it may not be fully realized. Sources said increases could be tough to maintain if and when US-origin resin again becomes less expensive than locally produced and Asian-origin polyethylene.
PVC import prices in Latin America were seen stable in both the WCSA and Brazil amid little changes in export pricing in the US and Europe, where the lowest priced alternatives originate. The lifting of a force majeure by Mexichem Resinas Colombia would add supply in the region, though the locally produced resin carries a premium to imports and may not immediately affect CFR prices in either region, sources said. The producer was also recently heard seeking price increases both for October and November.
US METHANOL
Prices have shown stability during October and market participants expect this trend to continue. Balanced market dynamics are the primary reason behind stable prices, according to sources.
While there is still interest in buying for October, sources said interest and focus has begun shifting to November. Liquidity in the market remains limited, however, and one source suggested participants were still waiting for post-holiday direction from China.
