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NWE Benzene – 5-30 day price falls on March-April backwardation

– 5-30 day price $0.50/mt lower on day

– Market normalizing after price spike last week

S&P Global  assessed benzene for delivery 5-30 days forward at $649.50/mt Thursday, $0.50/mt lower on the day. Market participants said the market was moving into a more balanced situation and was normalizing after last week’s price spike that followed the outage of the 320,000 mt/year Bohlen plant. “[The] market had to digest the Dow shutdown, but we could be back on an upward trend [after] today,” a trader said Thursday. A second trader said benzene prices “were supported by the energy complex coming up a bit,” adding that they “found a bullish element today.” The 1630 London time ICE Brent crude oil futures assessment rose to $67.09/b Thursday from $66.57/b Tuesday. Meanwhile, the benzene-naphtha spread indicated that length on the benzene market had returned. The spread was last seen at $126.75/mt Tuesday, down from $143.50/mt Thursday, with values below $150/mt indicating ample available benzene supplies on the market. Downstream,  assessed styrene loading 5-30 days forward at $1,084.50/mt FOB ARA Thursday, up $24/mt on the day. March was assessed at $1,076/mt, up $25/mt on the day, $1 above the best bid at $1,075/mt and below an outstanding offer at $1,080/mt. April was assessed at $1,094/mt, up $21/mt based on the existing contango between March and April and below the latest offer at $1,095/mt. This narrowed the contango $4/mt to $18/mt.

RATIONALE:

S&P Global  assessed benzene for delivery 5-30 days forward at $649.50 /mt CIF ARA Thursday, down $0.50/mt from Tuesday’s assessment due to the backwardation between March and April. March was assessed stable on the day at $654/mt, within the latest bid-offer range of $635-$655/mt. April was assessed stable on the day at $644/mt, within the latest bid-offer range of $635-$645/mt and maintaining a stable backwardation of $10/mt between March and April. May was assessed at $644/mt, $5/mt lower on the day, within the latest bid-offer range of $630-$645/mt. June and July were assessed flat to May. FOB was assessed at $649.50/mt, flat to CIF.

Asian styrene monomer fell $2/mt from Tuesday to $1,081/mt CFR China and $1,041/mt FOB Korea

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– Tracks weakness in feedstock benzene

– Styrene inventory at 410,000 mt Tuesday

Asian styrene monomer fell $2/mt from Tuesday to $1,081/mt CFR China and $1,041/mt FOB Korea Tuesday, tracking the weakness in feedstock benzene. In the CFR China market, buying interest was strong for April-arrival and loading cargoes, while there were fewer selling interest. Bids were heard at $1,060-$1,078/mt for April-arrival cargoes and $1,080/mt for April-loading cargoes, while offers were heard at $1,090/mt for April-arrival cargoes. No deal was heard concluded. In the east China domestic market, prices slid from the start of the day before easing towards the late afternoon, and the April marker was assessed down Yuan 30/mt from Tuesday to Yuan 8,580/mt ex-tank. According to market sources, styrene inventory in east China stood at 410,000 mt Tuesday, up 10,000 mt on the week, where arrivals of 26,000 mt outstripped consumption of 16,000 mt. Current inventory level is 280,000 mt higher than the same period last year. The buildup in inventory has been a concern but sentiments remain bullish resulting in the strength in Asian styrene since early this year. A market source noted that there is no clear price direction since last week and the change in inventory level in the next one to two weeks would be important for the market. “Market has been expecting tighter styrene supply during this peak turnaround season so all eyes will be on the change in inventory level in the subsequent weeks. There are concerns that prices will collapse if there is minimal change in stockpiles,” a market participant said. In Europe, styrene for loading 5-30 days forward was assessed at $1,051/mt FOB ARA Tuesday, up $1/mt on the day and up $40/mt on the week.

RATIONALE:

Asian SM was assessed down $2/mt from Tuesday at $1,081/mt CFR China and $1,041/mt FOB Korea Tuesday. The CFR China and FOB Korea SM markers currently take the average of the H1 and H2 April laycans. There were no transparent bids and offers during the  Market on Close assessment process on Tuesday. H1 and H2 April were assessed at the pegged level of $1,081/mt CFR China, above the best bid heard at $1,080/mt with no offer heard. In the East China domestic market, the April marker was assessed at Yuan 8,580/mt ex-tank Tuesday, down Yuan 30/mt from Tuesday. On an import parity basis, this is approximately $1,079.06/mt. FOB Korea marker was assessed at $1,041/mt Tuesday, based on the pegged $40/mt spread to CFR China, while CFR Taiwan marker was assessed at $1,069/mt Tuesday, based on the pegged $12/mt spread to CFR China.

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pexels-photo-261706-min

Asian benzene prices fell sharply across the region

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– East China prices fall Yuan 80-130/mt

– South Korea exports 57,615 mt March 1-10

Asian benzene prices fell sharply across the region Tuesday, with market participants caught unprepared for the unexpected fall, market sources said. Sharp price falls in the domestic East China market had set off the regional downtrend, amid uncertainty about recovering demand from downstream markets including styrene, phenol and caprolactam. Prices of domestic material had fallen Yuan 50/mt early Tuesday, from Tuesday’s close, and had subsequently fallen an additional Yuan 30-80/mt to Tuesday’s assessed levels. Prompt domestic benzene was assessed at Yuan 4,680/mt, down Yuan 80/mt from Tuesday, or $588.58/mt on an import parity basis. Balance March benzene was down Yuan 120/mt over the same period to Yuan 4,690/mt ($589.84/mt), while April was down Yuan 130/mt to Yuan 4,710/mt ($592.35/mt). The fall also came amid an unexpected increase in inventory levels, as market sources had previously said that any further rise was unlikely owing to almost-full tanks. Arrivals continued to be greater than consumption at 50,000 mt and 46,000 mt, respectively, while inventory levels rose 4,000 mt on the week to 238,000 mt Tuesday. The price fall in Yuan-denominated material triggered a similar decline in US dollar-based CFR China prices, amid bearish sentiment as the domestic-import arbitrage window stood closed. CFR China was traded at $602/mt Tuesday, $13-$18/mt lower than deals concluded last Tuesday. With domestic material now priced lower than that of imported material, the domestic-import arbitrage, whereby benzene is imported and stored in commercial tanks for subsequent sale in Yuan-denominated parcels, stands closed. This also resulted in selling pressure, especially with large volumes of imported material currently residing in these commercial tanks. In other news, ballpark figures of South Korean exports May 1-10 were seen Tuesday, during which the country exported 57,615 mt of benzene. 73.9% of exports went to China, while the remaining 26.0% of exports were US-bound. A market source said that these exports were likely to hit US shores in May, during which demand may recover amid the summer season.

RATIONALE:

FOB Korea benzene was assessed down $8.33/mt from last Tuesday at $602/mt Tuesday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 April, H2 April, and H1 May. During the  Market on Close assessment process Tuesday, no fully transparent bids and offers were seen. The H1 and H2 April laycans were assessed at $598/mt and $600/mt, respectively, keeping the H1 April/H2 April and H2 April/May spread unchanged from the pegged levels of minus $2/mt and minus $8/mt, respectively. The H1 May laycan was assessed at $608/mt FOB Korea, below an offer last seen at $609/mt FOB Korea, and above a bid at $606/mt. The CFR China marker was assessed down $13/mt from last Tuesday at $602/mt, with a trade heard concluded at the same level. The East China marker was assessed down Yuan 110/mt on the day at Yuan 4,693/mt, or $590.26/mt on an import parity basis.

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NWE Benzene – Market steady on stable fundamentals

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– 5-30 day price down $0.50/mt on the day

– Supply, demand unchanged

 

S&P Global  assessed benzene for delivery 5-30 days forward at $668.50/mt Thursday, down $0.50/mt from Wednesday’s assessment, based on the March-April backwardation caused by the continued shutdown of Dow’s 320,000 mt/year Bohlen plant in Germany. The outage has greatly reduced prompt benzene supply. The benzene-naphtha spread also indicated a reduction in the length of benzene supply in the market. It was last seen at $139.25/mt Wednesday, up from $125.50/mt Friday, the highest since November 30, 2018. The benzene market was subdued, with many participants taking part in the EPL conference. “A lot of people are in Monaco so no news still today,” a trader said Thursday. Upstream, crude oil prices rose slightly, with the 1630 GMT ICE Brent crude oil futures assessment rising to $65.88/b Thursday from $65.58/b Wednesday. Downstream, in the European styrene market, prices rose marginally Thursday. S&P Global  assessed styrene for loading 5-30 days forward at $1,050/mt FOB ARA Thursday, up $1/mt on the day. Spot business was described as quiet. Discussions were heard of high inventory levels in east China, which stood at 345,500 mt Wednesday according to  data.

 

RATIONALE:

S&P Global  assessed benzene for delivery 5-30 days forward at $668.50/mt CIF ARA Thursday, down $0.50/mt on the day on the back of the March-April backwardation. March was assessed stable on the day at $671/mt, above the most competitive bid of $670/mt. April was assessed stable on the day at $661/mt, based on a stable backwardation of $10/mt between March and April and within the latest bid-offer range of $645-$665/mt. May was assessed at $667/mt, stable on the day, based on a stable April-May contango of $6/mt and within the latest bid-offer range of $645-$670/mt. June and July were assessed flat to May. FOB was assessed at $668.50/mt, flat to CIF.

toluene price updates
toluene price updates

NWE Styrene – Spot prices rise on renewed buying interest

– Styrene trades at $1,030/mt

– Less length in benzene market

European styrene started the week with rises in the spot market on renewed buying interest. S&P Global  assessed styrene for loading 5-30 days forward at $1,032.50/mt FOB ARA Tuesday, up $21.50 from Tuesday. Buying interest for March continued Tuesday as a styrene deal was heard conducted on Tuesday. A producer sold 2,000 mt at $1,030/mt FOB Moerdijk. Market participants are poised for the styrene turnarounds which are likely in the second quarter. In feedstocks, market participants said that at least six trades were conducted Tuesday, three for April and three for March delivery, as consumers sought to secure volumes. The benzene-naphtha spread also pointed to a reduction in length in the benzene market. The industry-settled European ethylene contract price for March has fully settled at Eur1,015/mt ($1,157/mt) FD NWE, an increase of Eur30 on February, market sources said Tuesday. In Asia, styrene extended its gains from Tuesday by $7 to $1,083/mt CFR China Tuesday on expectations that fundamentals will become more bullish from late March due to the scheduled turnarounds. A source said that there were also expectations that high inventories in China would fall this week.

RATIONALE:

S&P Global  assessed styrene for loading 5-30 days forward at $1,032.50/mt FOB ARA Tuesday, up $21.50 from Tuesday. March was assessed at $1,030/mt, up $19, within the latest bid offer range heard at $1,015-$1,040/mt and in line with a trade heard at $1,030/mt done late Tuesday. April was assessed at $1,052/mt, also up $19, within the latest bid offer range heard at $1,045-$1,060/mt, maintaining a $22/mt contango to March.

Asian Benzene – FOB Korea falls $9.33/mt

– South Korean exports to the US plunge in February

– Renminbi prices fall Yuan 50-70/mt

FOB Korea benzene prices fell Tuesday, driven by large drop in the domestic East China benzene market. The fall in domestic prices was in part due to the fact that inventory levels had yet to decrease, standing at 240,000 mt Tuesday, up 9,000 mt on the week. Arrivals stood at 63,000 mt, of which 48,000 mt was delivered to commercial tanks, while end-users received the remaining 15,000 mt. This prompted sellers to offer at lower levels. Offers for material loading before March 10 were seen in the market, as sellers were keen to free up some tank space. Prompt benzene was assessed down Yuan 70/mt from last Tuesday at Yuan 4,890/mt, or $616.39/mt on an import parity basis, while balance-March material was assessed down Yuan 50/mt at Yuan 4,930/mt ($621.44/mt). April benzene was assessed down Yuan 50/mt at Yuan 4,960/mt, or $625.22/mt. “Renminbi prices fell today…[but] CFR is still so firm,” a trader said Tuesday. This closed the domestic-import arbitrage. Previously, traders could opt to import CFR China material and store the cargo in shore tanks, subsequently selling the product in Yuan-denominated parcels, and profit from the arbitrage. However, with April CFR China prices $3.78/mt higher than April domestic benzene, the arbitrage stood closed Tuesday. In other news, ballpark figures of South Korean export statistics for benzene loaded in February, South Korea exported a total of 230,768 mt, up from 208,932 mt in January. Out of that 84.3% (194,572 mt) of exports were China-bound, while just 5.2% (12,091 mt) of benzene was headed towards the US. Volumes headed toward the US are down sharply from the 38,476 mt in January. This comes amid growing competition for demand from the Asian market, as several producers across the various countries in the region were heard keen to work the Asia-US route.

RATIONALE:

FOB Korea benzene was assessed down $9.33/mt from last Tuesday at $617/mt Tuesday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 April, H2 April, and H1 May. During the  Market on Close assessment process Tuesday, there were no transparent bids and offers seen. H1 and H2 April were assessed at $615/mt FOB Korea, widening the April/May spread from minus $4/mt Tuesday to minus $6/mt Tuesday, below an offer at minus $5/mt seen Tuesday. The H1 May laycan was assessed at $621/mt FOB Korea, where a deal was concluded Tuesday. The CFR China marker was assessed down $3/mt from last Tuesday at $629/mt Tuesday, tracking falls in the domestic East China market. The East China marker was assessed at Yuan 4,927/mt Tuesday, down Yuan 56/mt on

The Asian naphtha complex saw low trade activity at the onset of the week

The Asian naphtha complex saw low trade activity at the onset of the week, while fundamentals were largely unchanged on Tuesday. Expectations on the arbitrage cargoes for April-arrival into the Far East was lower than for March, market sources said. The East/West naphtha paper spread, however, appeared to be strengthening. According to one market source, the April-arrival naphtha arbitrage volume was earmarked around 1.2-1.4 million mt, while March-arrival volume was near 1.7 million mt. The East/West naphtha spread rebounded from a five-month low at plus $13/mt to $16.5/mt on Tuesday and was pegged slightly higher at $16.75/mt on Tuesday’s 0300 GMT trade hours. Meanwhile, the spread of Far East Index propane swap against the Mean of  Japan naphtha swap fell for the third straight session to minus $76/mt on Tuesday, a level not seen since October 25 last year at minus $76.75/mt. In other news, Japan’s Keiyo Ethylene is currently running its naphtha-fed steam cracker in Chiba at 100% capacity after completing some repair works, a company source said late Tuesday. The cracker, which is able to produce 700,000 mt/year of ethylene and 400,000 mt/year of propylene, was shut down around mid-February for for about 10 days of repairs. India’s Bharat Petroleum Corp. Ltd.’s refinery in Mumbai plans to shut down a 6 million mt/year (120,000 b/d) catalytic distillation unit during July-August for maintenance. The regular maintenance has been planned for 25 days. The refinery has two CDUs. It mainly caters to the demand for petroleum products in the western region. BPCL’s refinery has a capacity of 12 million mt/year (240,000 b/d). Brunei-based Hengyi Industries is on track for completion of its new refinery in Pulau Maura Besar this July and will begin operations by the end of 2019, according to local media reports. The final investment decision was made in March 2017, according to S&P Global  data. The plant is expected to process initially 175,000 b/d of crude and condensate. With the completion of phase 2 in 2022, the plant’s capacity is set to increase to 22 million mt/year (440,000 b/d), the report said. The refinery will deliver products to the local market and also export to China. China’s Hengyi Group owns 70% of Hengyi Industries while the Brunei government, through Damai Holdings, owns 30%.

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IPA: IPA prices noticed Rs 70/kg but some traders also quoted Rs 69/kg to clear their existing stocks

IPA: IPA prices noticed Rs 70/kg but some traders also quoted Rs 69/kg to clear their existing stocks on low margin. Prices expected stable to low in coming days as offer for IPA also heard at $830/mt CFR India level.

Booking level of IPA assessed between $830-850/mt week on week.

European isopropyl alcohol was assessed at Eur980/mt FD NWE, stable on the week, within a range heard at Eur950-1,050/mt. The market this week was “balanced with stable supply,” a source said. Export and domestic isopropyl alcohol prices were stable on the week at $1,191-$1,213/mt FOB USG and $1,235-$1,257/mt delivered. The assessment considered trucks heard bought at around 53-54 cents/lb FOB Houston with talk of local delivery cost at around 2 cents. Upstream, refinery-grade propylene was assessed at 20 cents/lb, down 4.5 cents on the week.

Asian Styrene: Rises $6.50/mt amid gains upstream, China

– Demand seen rising as China’s factories restart

– SM production margin narrows 57% on month

Asian styrene monomer rose $6.50/mt on the day at $1,068/mt CFR China and $1,028/mt CFR China  Friday amid gains upstream and in the China domestic market. SM in the east China domestic market for March rose Yuan 60/mt over the same period to Yuan 8,420/mt, equating to $1,058.66/mt on an import parity basis. SM prices were largely stable immediately after the Lunar New Year holidays and sentiment could now be improving on expectations downstream demand returning after the 15th day of the Lunar calendar, when end-user factories restart, market sources said. “Downstream demand in China is beginning to show signs of recovery but there are barely any deals heard concluded. The market will need more time before more active trading resumes,” a market source in China said. April ICE Brent crude futures rose 73 cents/b (1.101%) day on day to $67.04/b at 4:30 pm Singapore time (0830 GMT). Feedstock benzene rose $6-$7/mt over the same period to $616.33/mt FOB Korea and $630.50/mt CFR China, while ethylene was stable at $1,200/mt CFR Northeast Asia and $1,080/mt CFR Southeast Asia. The styrene production margin stood at $53.60/mt  Friday, down $70.40/mt or 56.8% on the month. In plant news, Taiwan Styrene Monomer Co. shut its 180,000/year SM plant at Linyuan in Kaoshiung  Friday for 2-3 weeks’ scheduled maintenance, a company source said  Friday. TSMC has a 160,000 mt/year SM plant in Linyuan and that will run at normal rates during this period.

RATIONALE:

SM was assessed up $6.50/mt day on day at $1,068/mt CFR China and $1,028/mt FOB Korea  Friday. The markers currently take the average of the H2 March and H1 April laycans. There were no transparent bids or offers during the  Market on Close assessment process. H2 March was assessed at $1,065/mt. Maintaining the pegged March/April spread of minus $5/mt, the April laycans were assessed at $1,071/mt CFR China. The East China domestic price for March was assessed up Yuan 60/mt on the day at Yuan 8,420/mt ex-tank, equating to $1,058.66/mt on an import parity basis. The FOB Korea marker was assessed at $1,028/mt, based on the pegged $40/mt spread to CFR China, and the CFR Taiwan marker at $1,056/mt, based on the pegged $12/mt spread to CFR China.

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Take Decisions Based on Data

Asia and Middle East Naphtha Market Commentary

Fundamentals balance in the Asian naphtha complex appeared to be gearing towards more supply, as spot paraffinic naphtha offers continued to emerge on the physical front while buying interests from end-users were still dull. Trade sources  Friday said arbitrage naphtha cargoes delayed earlier had started to make its way to the Far East, although a handful of cargoes were still postponed. “Weather is easing off prior to spring [in the West]. Still, I can see some cargoes [being] delayed,” a trader in Asia said. The market source expected the February arbitrage volume to hover at slightly under 1.5 million mt. SK Energy chartered Torm Horizon to load 37,000 mt of naphtha from Tuapse on February 24 for a lumpsum cost of $1.325 million, S&P Global  tanker data showed. The destination is slated for Singapore. The front-month East/West naphtha spread touched a near four-month low at plus $13/mt on  Friday before edging up at plus $14.50/mt  Friday, reflecting the bearish sentiments hinging on a recovery in arbitrage flows. Following Reliance’s third offer this week of a Long Range I cargo loading end-March, state-run Bharat Petroleum Corp. Ltd., is offering 35,000 mt of naphtha with minimum 76% paraffin and maximum 400 ppm sulfur, ex-Kochi, for March 9-10 loading. The tender closes February 26. Hanwha Total Petrochemical, is offering 33,000 mt of light naphtha for lifting from Daesan over April 1-3, in a tender closing February 21. Petrochemical producer Yeochun NCC, bought late  Friday at least one cargo of 25,000 mt open spec naphtha with minimum 70% paraffin content for first-half April delivery, at a premium around $4-$5/mt to Mean of  Japan naphtha assessments, CFR, pricing 30 days prior to delivery. In the Asian mid-afternoon hours  Friday, the H2 April CFR Japan naphtha physical benchmark was pegged at $545.50/mt as underlying crude futures gained momentum. The second-line trading cycle was assessed at $539/mt on  Friday.

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