US OLEFINS
With the May propylene contracts having settled at an increase last week, US olefins market participants are focusing their attention on the May ethylene contract this week. Trade sources have been targeting a decline for May contracts, citing ample supply and a decline in spot levels throughout May. US polyethylene market participants have said they expect a downward correction in June, citing ample supply and global downtrend, which has been driven by weaker demand. Producers have also announced they would delay domestic May price increases to June. Sources added that domestic June PE contracts would likely be settled by the first week of July.
US POLYMERS
Market participants continue to seek direction on the immediate future of polypropylene spot pricing, with the expectation of greater clarity forthcoming now that upstream propylene monthly contracts settled up 4.50 cents/lb. Following a wide spread of transaction pricing ranging from 48 cents/lb to 53 cents/lb last week, stability should be on the horizon in tandem with feedstock prices. Inventory remains ample and demand modest, but the start of the summer months might yield a boost in the latter.
LATIN POLYMERS
Latin America expects increased polypropylene pricing week on week amid lack of availability, sources said. Braskem announced at the end of last week a Real 600/mt increase for all polypropylene resins for Brazil, and the market is waiting confirmation. Buyers continue waiting for fresh pricing indications to start the month, sources said. Regional producers had announced more increases are coming for new orders in June, sources said. Sources said they have seen an increase in PP during May, with less on-the-water cargoes being offered. Traders are now looking for arbitrage opportunities to bring Asia-origin PP into South America, sources said. Latin America will see mixed pricing for polyethylene this week, sources said. Braskem May's increase announcement of Real 300/mt is still under acceptance by the market. LDPE and LLDPE have been less available for South America markets, sources said. Traders said product has gone to other markets, such as Africa, Southeast Asia and Europe, where they have found better economic margins. Pricing of LDPE and LLDPE has rebounded amid lack of availability, unlike HDPE pricing, which has been mostly stable to lower, sources said.
US AROMATICS
The US benzene market was expected to remain backwardated amid expectations of stronger import volumes. May benzene exports from Korea to the US breached 109,000 mt, according to KITA statistics. The imports were expected to be slightly offset via reduced production from toluene conversion units as margins have loitered in negative territory for well over a month now. This has resulted in toluene demand coming largely from the gasoline segment and near-term, toluene prices are expected to trace blend values. Spot benzene pricing was expected flat to lower following the June benzene contract settlement, which was heard done at 234 cents/gal. Demand along the styrenics chain was expected to be subdued as styrene exporters look to Asia while PS and ABS demand is dented by ongoing trade disputes between the US and China and the US and Mexico. In xylenes, paraxylene pricing was expected to remain under pressure amid limited activity. This was expected to translate into continued limited buy interest in the US mixed xylenes market.
US VINYLS
US export polyvinyl chloride prices were expected to rise this week as producers finish sterling June pricing negotiations. Market participants said producers were firm in offers ranging from $810-$820/mt FAS Houston, up $75/mt from May levels. Pricing had already risen to last week's assessed range of $760-$770/mt FAS Houston amid deals heard done at those levels. Market sources said a seasonal uptick in domestic demand, delayed from March and April by prolonged winter weather and severe flooding, would squeeze June export volume availability, as well as turnarounds.
