– US logistics issues continue to hamper arbitrage
The toluene market in Europe was quiet Thursday, with no disproving indications heard. Premiums for both April and May were assessed stable at $86/mt and $99/mt respectively. Supply has been heard to be flush in Europe, with little spot demand for premium TDI grade material from petrochemical buyers. This has led to the premium falling towards the gasoline blend value of the market, last heard in a range of $50-$80/mt from sources. Further material is expected to arrive before the end of April from the Mediterranean, further weighing on the market. So far, export opportunities have been thin. The spread between US and EU pricing implied arbitrage was possible on Thursday, showing a potential gross profit of approximately $30/mt. The route remained unworkable, however, due to a continued lack of trading interest in the US. This has been due to logistical issues that carry an uncertain end date.
S&P Global Thursday assessed the CIF ARA toluene premium over Eurobob gasoline at $86/mt for April, stable from Thursday with no disproving indications. The May premium was assessed stable at $99/mt, with no disproving indications.
Asian toluene was assessed unchanged day on day at $710/mt FOB Korea on Thursday. Although Brent crude oil was quite strong on Thursday, which promised that demand for aromatics blendstocks would remain firm, values for other aromatics products like Asian isomer-MX and paraxylene were weaker day on day. The Asian paraxylene CFR Taiwan/China marker was assessed lower by $36.08/mt at $1,006.42/mt, day on day. Toluene demand in South Korea from buyers was pretty healthy, one producer said, with demand for cargo across May and June loadings. Toluene buyers come from all over Asia, including Southeast Asia, domestic South Korean buyers and Chinese buyers as well, a source said. South Korea’s YNCC’s BTX No. 1 unit, located in Yeosu, will be undergoing a turnaround between May 17 and June 23, said the source. The plant will be unable to provide any toluene cargoes to the market during this time. The plant will also not be selling any toluene cargoes during May, since it has to fulfill its May term cargo commitment. In Taiwan, CPC would only hold its June spot cargo sell tender in the first week of May, a market source said. Asian buyers of CPC toluene cargoes currently seem to be using their cargoes primarily for gasoline blending, he added. CPC generally supplies between 6,000-9,000 mt of toluene to the market on a monthly basis.
Toluene was assessed unchanged day on day at $710/mt FOB Korea and at $726/mt CFR China on Thursday. The markers take the average of the third and fourth half-month laycans, currently H2 May and H1 June. No bids or offers were registered during the Market on Close assessment process. No bids or offers were heard on Thursday for either the FOB Korea or CFR China marker. The East China domestic prompt price was higher day on day by Yuan 10/mt at Yuan 5,360/mt on Thursday, with offers heard between Yuan 5,380-5,400/mt.
Asian styrene monomer was $19/mt lower on the week at $1,071/mt CFR China and $1,031/mt FOB Korea Friday on the bearish sentiment despite stronger upstream crude (Imported data). Day on day, styrene was assessed flat amid rangebound discussions. Prices were initially lower earlier in the day before recovering to end the day stable. In the CFR China Imported Data, a bid was heard at $1,065/mt for June-arrival cargoes but it did not attract any selling interest. In the east China domestic market, the prompt marker was assessed at Yuan 8,200/mt ex-tank Friday, Yuan 10/mt higher day on day. At 4:30 pm Singapore time (0830 GMT), ICE June Brent futures were up $2.29/b (3.316%) on the week at $71.35/b Friday. Imported Data has been rather “directionless” Friday amid weak buying interests, a market participant said. According to sources, styrene inventory in east China fell 3,100 mt on the week at 229,600 mt, where consumption of 23,100 mt outstripped arrivals of 20,000 mt. Despite the recent continuing drawdown in styrene inventory, it hasn’t been a supporting factor to prices and sentiments given that the current level remains much higher than historical Imported data, Market sources said. Styrene inventory in east China is 154,500 mt higher as compared to the same period last year. Market participants further noted that the earlier news of China’s Changzhou New Solar Chemical shutting its 300,000 mt/year styrene monomer plant in Changzhou, Jiangsu for 20-25 days of unplanned maintenance from April 15 might have some short-term influence on styrene when the plant starts maintenance coming Friday. The CFR India and Southeast Asia markers were assessed down $19/mt on the week at $1,064/mt and $1,061/mt Friday, respectively.
Asian SM was assessed stable on the day at $1,071/mt CFR China and $1,031/mt FOB Korea Imported data Friday. The markers currently take the average of the H1 May and H2 May laycans. There were no transparent bids or offers during the Platts market on Close assessment process on Friday. H1 and H2 Jun were assessed at $1,071/mt CFR China Imported data, above the best bid heard at $1,065/mt with no offer heard. Maintaining the pegged flat May/Jun spread, H1 and H2 May were assessed at $1,071/ mt, also tracking firmer sentiments in the east China domestic market in the afternoon. In the east China domestic Chemical Industry, the prompt marker was assessed up Yuan 10/mt on the day at Yuan 8,200/mt ex-tank, equating to $1,058.37/mt on an import parity basis. The FOB Korea marker was assessed at $1,031/mt, based on the pegged $40/ mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,059/mt, based on the pegged $12/mt spread to CFR China Imported data.
– Nan Ya to run 2-EH unit full capacity by end Apr
The phthalic anhydride Chemical Industry in Southeast Asia continued to trend higher this week as buyers jostle for cargoes, as more producers from Northeast Asia were gearing up for turnarounds next month. South Korea’s Aekyung Petrochemical plans to shut its 210,000 mt/year phthalic anhydride plant at Ulsan on May 7 for three weeks of scheduled maintenance, a Chemical Industrial company source said Friday. The shut down is expected to result in a production loss of 12,000 mt, S&P Global Friday estimated. PA is mainly used in the manufacture of dioctyl phthalate, which is a plasticizer. “It takes three months to reach normal operation rate, so we can only operate fully in the end of July,” said a company source with Aekyung. Taiwan’s Nan Ya Plastics aims to run its 2-ethyl hexanol unit at full capacity by end April after the plant restarted March 20 following an unexpected shutdown on March 18, a Chemical Industrisl company source said Friday. The 2-EH unit is located at Mailiao and has a production capacity of 205,000 mt/year. The unit was shut down unexpectedly due to a technical issue. “We are only running at 85% of our operating rate at the moment due to some technical problem, but we will reach full output capacity by end April,” said a company source. Nan Ya Plastics is the largest 2-EH producer in Taiwan.
Dioctyl phthalate was assessed down $10/mt on week at $1,045/mt CFR China Chemical Industry Friday, above a buying indication at $1,040/mt, and above a selling indication at $1,050/mt. The CFR SEA marker was assessed unchanged over the same period at $1,290/mt. Phthalic anhydride was assessed unchanged on week at $940/mt CFR China, below a selling indication at $970/mt and above a buying indication at $930/mt. The CFR SEA Chemical Industry was assessed up $20/mt on week at $1,060/mt, based on trades concluded in the range of $1,040-$1,090/mt CFR SEA. 2-EH was assessed unchanged on week at $1,060/mt CFR China, with trading indications at the same level. The SEA marker was assessed unchanged on week at $1,100/mt in quiet trading. Normal butanol was assessed down $10/mt at $910/mt CFR China, below an offer at $930/mt CFR China Chemical Industry. The SEA marker was flat at $890/mt CFR, below a selling indication at $900/mt.
Spot Gulf Coast MTBE remained at a discount to its Northwest European counterpart Thursday after being assessed below an offer seen in the imported data on Close assessment process. In the MOC process, Lukoil made an offer at 217 cents/gal FOB USG for 25,000 barrels. No bids or trades were confirmed Thursday. While notional talk Thursday after the assessment placed the differential at around plus 4 cents, Thursday’s MOC offer kept the differential stable on the day at minus 2.41 cents. In related energy markets, NYMEX May RBOB jumped 7.02 cents day on day to $2.0692/gal in impoted data. Blended and shipped values were last estimated near 262 cents/gal while the MTBE factor relative to gasoline was at 1.0494. In Asia, the FOB Singapore marker rose $7/mt (about 1.97 cents/gal) to $759/mt (about 213.56 cents/gal imported data). In Europe, the FOB ARA marker rose 4.36 cents/gal to 218.77 cents/gal.
Spot USG MTBE was assessed Thursday at 216.36 cents/gal FOB USG, up 4.36 cents day on day. The assessment was based on an unchanged 2.41-cent discount to the FOB ARA marker and came below an offer in ( imported data) the market on Close assessment process at 217 cents/gal FOB USG.