Month: February 2019

NWE Xylenes – OX rises as traders look for Asian cargoes

– PX M1, M2 show backwardation

– MX premiums stable; market still quiet

European orthoxylene spot prices gained $10/mt Tuesday to close at $935/mt FOB Amsterdam-Rotterdam-Antwerp, as supply tightness continued and European participants looked to Asia for material. In particular, this was due to strong gains in the US orthoxylene market, which saw US Gulf Coast spot prices rise to 41.75-42.75 cents/lb ($920-$942/mt) FOB USG last Tuesday, a rise of $110/mt since February 1 and increasing to around parity to Northwest European prices. “US is not an option,” a trader said. “There are offers there [from Asia].” In the mixed xylenes market, activity was still thin and premiums were unchanged on the day at $160/mt CIF ARA February and $153/mt CIF ARA March. Mixed xylenes seemed unaffected by products downstream, which have shown gains both on Tuesday and last week. European paraxylene gained Tuesday, showing a backwardated structure as laycans in Asia rolled forward. February closed at $1,011/mt FOB ARA, up $10/mt, while March gained $5/mt to close at $1,006/mt FOB ARA. As laycans rolled in Asia, a clearer picture could be seen for strong April demand. Despite the strong demand for April cargoes in Asia, Europe’s main export hub, one European trader said: “There are no exports. No offers, no demand, prices don’t match.” This came despite discounts to the CFR Taiwan/China market providing gross profit margins above freight costs. Freight costs were calculated at $80/mt last Tuesday, from Rotterdam to Far East Asia. February’s gross discount to the CFR Taiwan/China H2 April laycan was calculated at $105/mt, while March showed a $104.25/mt discount to the CFR Taiwan/China H1 May laycan on Tuesday.

RATIONALE:

S&P Global   assessed the February CIF ARA premium to Eurobob gasoline stable on the day at $160/mt Tuesday, with no disproving indications. The March CIF ARA premium was stable at $153/mt, maintaining its structure to February from Tuesday. February Northwest European paraxylene gained $10/mt to $1,011/mt FOB ARA, tracking the CFR Taiwan/China H2 April laycan. March was assessed up $5/mt at $1,006/mt FOB ARA, tracking the CFR Taiwan/China H1 May laycan. The paraxylene 5-30 day forward spot price was assessed as the average of the period at $1,007.25/mt FOB ARA, up $6.25/mt. Orthoxylene was assessed up $10/mt at $935/mt FOB ARA, taking into account an indication that values were “above $930/mt.” Another indication saw prices as high as $950/mt but was not corroborated.

Asian PX: CFR Taiwan/China gain $7.42/mt amid a rollover in backwardation

– April trades twice at $1,115/mt CFR

– April/May backwardation assessed at $4.75/mt

Asian paraxylene prices rose $7.42/mt from last Tuesday to be assessed at $1,113.42/mt CFR Taiwan/China, and up $7.75/mt at $1,094.42/mt FOB Korea Tuesday, amid a rollover of laycans in backwardation. Activity in the S&P Global   Market on Close assessment process has shifted firmly to April-delivery cargoes following March declaration, with two April cargoes traded in the MOC process Tuesday at $1,115/mt CFR Taiwan/China for both deals. Firm demand for April cargoes had maintained a backwardated structure between April and May laycans, with the April/May backwardation assessed at $4.75/mt at the close of Asian trade Tuesday. No trades were seen for May as sellers kept offers firm, while buyers were tentative in matching higher offers in the market, wary of increased Asian spot supply next month originating from Southeast Asia, with both Thailand’s PTTGC and Indonesia’s TPPI offering additional spot PX for March loading.

RATIONALE:

Asian PX prices rose $7.42/mt from Tuesday, assessed at $1,113.42/mt CFR Taiwan/China and up $7.75/mt at $1,094.42/mt FOB Korea Tuesday, amid a rollover of laycans. The markers take an average of the H1 and H2 April and H1 May laycans. The April laycans were assessed at $1,115/mt CFR Taiwan/China, below an outstanding April offer from Oman Trading International at $1,119/mt, and considering the level of the last April trade between GS Caltex and Mercuria. The H1 May laycan was assessed at $1,110.25/mt, above an outstanding May bid from GS Caltex at $1,110/mt, and below an outstanding offer from BPSG at $1,115/mt. The H1 May laycan was also assessed at a $4.75/mt backwardation to the April laycans, considering an outstanding Apr/May Asian-origin timespread bid from Mercuria at $5.50/mt. The above rationale applies to the following market data codes: “”PHASS05″” for FOB Korea and “”AAQNE00″” for CFR Taiwan/China.

Asian isomer-grade mixed xylenes rose

– Naphtha rallies $15/mt

– PX jumps $7.42/mt

Asian isomer-grade mixed xylenes rose from Tuesday by $2/mt to $694/mt FOB Korea and at $708/mt CFR Taiwan on Tuesday, tracking rising prices in related markets. A trade source said market participants were still eying exports to the US amid recent price rises there. However, the Asian MX market was quiet Tuesday. In related markets, April ICE Brent crude oil futures rose $1.95/b to $66.78/b at 0830 GMT in Asian trade, while naphtha jumped $15.25/mt to $535.25/mt CFR Japan. Asian paraxylene also increased by $7.42/mt to $1,113.42/mt CFR Taiwan/China.

RATIONALE:

Isomer-MX was assessed up from Tuesday by $2/mt at $694/mt FOB Korea and at $708/mt CFR Taiwan on Tuesday. The markers take the average of the third and fourth half-month laycans, currently H1 March and H2 March. No bids or offers were registered during the   Market on Close assessment process or heard during the day. The two markers were pegged and assessed up $2/mt based on movements in related markets. The above rationale applies to the following market data codes: PHAUV00 for FOB Korea and PHAUT00 for CFR Taiwan.

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NWE Toluene – February premium stable as production issues persist

– Premiums assessed at parity

– Arbitrage remains shut

Little change was seen for European toluene on Tuesday. Tightness in the market persisted due to production issues at two European production plants. The impact from this situation is expected to spill into March, sources said. Because of this, the premium to Eurobob for March toluene was assessed up $2.25/mt at $183/mt, at parity to the February premium. The spread between toluene and paraxylene in Europe shrank to $264.75/mt on Tuesday, the lowest point since the beginning of January. Outright European pricing on Tuesday remained at a strong premium to arrival-date assessments in the US and in China, keeping arbitrage windows closed.

RATIONALE:

S&P Global   assessed the CIF ARA toluene premium to Eurobob gasoline at $183/mt for February on Tuesday, stable from Tuesday. One trader pegged the market premium in a range of $180-$190/mt. The March premium was assessed up $2.25/mt to $183/mt. A trader indicated that February and March premiums were flat.

Asian Toluene: Rises $11/mt on thin trading

– Domestic East China ex-tank price rises

– Stable downstream TDI market in East China

Asian toluene rose $11/mt from Tuesday to be assessed at $605/mt FOB Korea and $636/mt CFR China, largely tracking the East China marker amid thin trading. Before the   Market on Close assessment process Tuesday, a bid for a 2,000-mt cargo was heard at $630/mt CFR China for any March delivery, with a bid and offer for a 2,000-mt second-half March loading cargo also heard at $605/mt FOB Korea and $622/mt FOB Korea, respectively. No bids or offers were seen during the   Market on Close Tuesday, despite the surge in upstream crude over the weekend, as participants stayed on the sidelines keeping a watch on prices. Price discussions for ex-tank prompt cargoes in the domestic East China market were heard at the Yuan 5,000/mt-Yuan 5,080/mt range earlier during the day, and rose to Yuan 5,060/mt-Yuan 5,070/mt towards the end of the day. The East China marker was assessed at Yuan 5,065/mt, converting to an import parity of about $632/mt Tuesday. Meanwhile, toluene end-users in China were mostly heard to have returned to the market on Tuesday. Downstream toluene di-isocyanate, also known as TDI, was heard traded at about Yuan 14,000/mt on Tuesday in East China. “The TDI market has been stable since after the Chinese New Year holidays,” a toluene end-user said Tuesday.

RATIONALE:

The FOB Korea toluene marker was assessed at $605/mt FOB Korea Tuesday, up $11/mt from Tuesday, largely tracking the CFR China marker amid thin trading. The marker takes the average of the third and fourth half-month laycans, currently H2 March and H1 April. The CFR China marker was assessed at $636/mt Tuesday, also up $11/mt on the day, tracking the domestic East China marker. No transparent bids or offers were seen during the   MOC process. The H1 March and H2 March laycans were assessed at $636/mt CFR China Tuesday, maintaining a flat market structure from Tuesday.

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Spot market off to quiet start amid thin discussions

– Buyers look to May cargoes

– Asian markers up $11.50/mt on day

The European styrene market started the week on a quiet note amid thin discussions Tuesday. S&P Global   assessed styrene for loading 5-30 days forward at $1,002/mt FOB ARA Tuesday, up $3.50/mt on the day. Bids in the European market were heard at $995/mt for March cargoes while offers were heard at $1,040 /mt for April cargoes. Buyers and sellers looked to May cargoes ahead of the turnaround season in the second quarter. No deals were heard concluded. Buying interest faded Tuesday as sources described the day as “quiet” and “dull”. Further upstream, fundamentals in the benzene market were unchanged, with demand generally soft despite recent price increases. “Prices are a little bit higher but no one wants to take [benzene],” the source said. The styrene-benzene spread was last seen at $389/mt Tuesday, remaining in healthy territory, well above the breakeven level of $250/mt. In Asia, styrene rose $11.50/mt from Tuesday to $1,062.50/mt CFR China and $1,022.50/mt FOB Korea Tuesday. While China is facing a continuous stock build, the turnaround season in other Asian countries has tightened supply. According to market sources, styrene inventory in east China stood at 312,500 mt last Tuesday.

RATIONALE:

S&P Global   assessed styrene for loading 5-30 days forward at $1,002/mt FOB ARA Tuesday, up $3.50/mt on the day. February was assessed at $979/mt, unchanged on the day, with no disproving indications. March was assessed at $1,009/mt, also unchanged on the day, within the bid-offer range heard at $995-1,010/mt.

Asian Styrene: Rises $11.50/mt on stronger energy complex

– East China domestic prices fall

– Feedstock benzene, ethylene higher

Asian styrene monomer rose $11.50/mt from Tuesday to $1,062.50/mt CFR China and $1,022.50/mt FOB Korea Tuesday, tracking the rise in upstream crude oil futures, as well as higher feedstock benzene and ethylene prices. The spread between CFR China prices and import parity levels in the east China market has widened, in part reflecting diverging fundamentals between China and the rest of Asia, market sources said. While China is facing a continuous stock build, turnaround season in other Asian countries have tightened supply. Bids in the CFR China market were heard at $1,060-$1,065/mt for April cargoes while offers were heard at $1,070/mt for March cargoes. No deals were heard concluded. In the east China domestic market, the March marker was assessed lower by Yuan 30/mt from Tuesday at Yuan 8,330/mt ex-tank, with its import parity at $1,041/mt Tuesday. At 4:30 pm Singapore time (0830 GMT), ICE April Brent crude futures were at $66.78/b, up $1.95/b from Tuesday. In the feedstock markets, benzene rose $2.50/mt from Tuesday to $614.50/mt CFR China, while ethylene increased by $5/mt to $1,200/mt CFR Northeast Asia Tuesday.

RATIONALE:

Asian SM was assessed higher by $11.50/mt from Tuesday at $1,062.50/mt CFR China and $1,022.50/mt FOB Korea Tuesday. The CFR China and FOB Korea SM markers currently take the average of the H2 March and H1 April laycans. There were no transparent bids and offers during the   Market on Close assessment process. H1 April was assessed at the pegged level of $1,066/mt CFR China, above the best bid heard at $1,065/mt with no offer heard. Maintaining the pegged March/April spread of minus $7/mt, H2 March was assessed at $1,059/mt CFR China. East China domestic March marker was assessed at Yuan 8,330/mt ex-tank, down Yuan 30/mt from Tuesday. On an import parity basis, this is approximately $1,041/mt. The FOB Korea marker was assessed at $1,022.50/mt Tuesday, based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,050.50/mt, based on the pegged $12/mt spread to CFR China.

Prices tick up amid contango structure

– Quiet market

– No offers for February

The European benzene market was off to a quiet start on Tuesday. No availability of material was seen for February, although buyers did show some interest, sources said. Bids and offers heard in the market were little changed from Tuesday, with wide enough ranges to suggest a lack of serious appetite. Several sources referred to the market as being quiet on Tuesday. The 5-30 day forward assessment for benzene was up 50 cents to $610/mt due to the contango in the market moving through into March. On Tuesday, the spread between naphtha and benzene in the European market shrank to $97.25/mt. Narrower spreads can indicate high levels of supply for benzene in the market, with less than $150/mt usually said to indicate oversupply of significance.

RATIONALE:

S&P Global   assessed benzene for delivery 5-30 days forward at $610/mt CIF ARA Tuesday, up 50 cents from Tuesday, based on the existing contango into March. February was assessed stable at $607/mt, above the best bid at $600/mt and with no offer heard. March was assessed stable at $611/mt, within a bid-offer range of $610-$625/mt. April was assessed stable at $616/mt, within a bid-offer range of $615-$635/mt. May and June were assessed flat to April. FOB was assessed at $610/mt, flat to CIF.

 

Rises $12.33/mt to $607.33/mt FOB Korea

– Tracking gains in upstream western crude

– Inventory in East China rises 5,000 mt on week

Asian benzene rose $12.33/mt from Tuesday to be assessed at $607.33/mt FOB Korea Tuesday, tracking gains in crude. The FOB Korea April laycan was assessed at $611/mt, above an outstanding bid from SKGC Singapore at $610/mt. The laycans rolled over Tuesday, from H1 March, H2 March and H1 April to H2 March, H1 April and H2 April, within a contango market structure. The CFR China marker was assessed up $2.50/mt from Tuesday at $614.50/mt Tuesday, between buying and selling indications for H2 March or April cargoes. The spread between the CFR China and FOB Korea markers narrowed from $17/mt on Tuesday to $7.17/mt Tuesday. The East China marker was assessed at Yuan 4,880/mt, or $610/mt on import parity equivalent. Front-month ICE April Brent crude futures were up $1.95/b from last Tuesday to $66.78/b at 4:30 pm Singapore time (0830 GMT). According to market sources, benzene inventories in East China rose 5,000 mt on the week to 236,000 mt. Arrival of 50,000 mt of benzene outstripped consumption of 45,000 mt, they said. According to S&P Global   data, the styrene monomer-benzene spread was at $448/mt CFR China Tuesday, up $9/mt from Tuesday and $11/mt on the month.

RATIONALE:

FOB Korea benzene was assessed up $12.33/mt from Tuesday at $607.33/mt FOB Korea Tuesday. The marker currently takes the average of the third, fourth and fifth half-month laycans, H2 March, H1 April and H2 April. The April laycans were assessed at $611/mt, above an outstanding bid from SKGC Singapore at $610/mt. The H2 March laycan was assessed at $600/mt, based on the pegged March/April spread staying unchanged on the day at minus $11/mt. The CFR China marker was assessed up $2.50/mt from Tuesday at $614.50/mt Tuesday, between buying and selling indications for H2 March or April-arrival cargoes at $613/mt and $620/mt, respectively. The East China marker was assessed at Yuan 4,897/mt, with its import parity equivalent assessed at $612/mt.

NAPHTHA CARGO CIF NWE MOC deals

NAPHTHA CARGO CIF NWE MOC deals: Gunvor-Stasco CIF NWE Naphtha Cargo min 28,000 mt, at $520/mt for March 4 to March 8 delivery, TQC Indic 1, Optol plus $1/mt; NAPHTHA MOC: OUTSTANDING INTEREST: BIDS: 1) BP Bids CIF NWE Naphtha Cargo 12,500 mt +/- 10%, at $522/mt for March 1 to March 5 delivery, TQC Indic 1; 2) BASF Bids CIF NWE Naphtha Cargo 12,500 mt +/- 10%, at $516/mt for March 5 to March 9 delivery; 3) GLENCORE Bids CIF NWE Naphtha Cargo min 24,000 mt, at $514/mt for March 6 to March 10 delivery, TQC Indic 1, Optol plus $2.00; 4) BP Offers CIF NWE Naphtha Cargo min 12,500 mt, at $516/mt for March 6 to March 10 delivery, TQC: Indic 2; 5) BASF Offers CIF NWE Naphtha Cargo min 12,500 mt, at $515/mt for March 10 to March 14 delivery. OFFERS: None.