Industry

Asian Styrene: Falls $6/mt on the day, $1,077/mt CFR China

– Styrene inventory rises 12,000 mt on the week

– Sinopec drops domestic BZ price by Yuan 150/mt

Asian styrene monomer fell $6/mt on the day at $1,077/mt CFR China and $1,037/mt FOB Korea Thursday. In the East China domestic market, prices fell to a greater extent towards the end of the day. The April market fell Yuan 70/mt on the day to Yuan 8,530/mt ex-tank Thursday. A market source attributed the weaker prices to the rise in inventory and fall in Sinopec’s listed price for domestic East China benzene, one of the feedstock for styrene production. According to market sources, styrene inventory in east China increased 12,000 mt week on week to 357,500 mt Thursday, as arrivals of 31,000 mt outstripped consumption of 19,000 mt. “Inventory data finally showed a decline in stockpiles level last week, which raised optimism in the market as it could imply the start of inventory easing, but it’s only for a week before we see an increase in inventory again,” a downstream producer said. China Petroleum & Chemical Corporation, or Sinopec, a major Chinese benzene producer reduced its domestic ex-tank price by Yuan 150/mt, a company source said Thursday. The listed price for domestic East China benzene was revised to Yuan 4,800/mt from Yuan 4,950/mt. The new listed price equates to approximately $604.34/mt on an import parity basis, based on an exchange rate of 6.7128. The downward price revision did not come as a surprise to the market, with prompt domestic East China prices having fallen Yuan 250/mt since the last time Sinopec had revised its listed price on February 21. In downstream plant news, Taiwan’s major acrylonitrile butadiene styrene maker, Chi Mei, will expand its ABS capacity by 600,000 mt/year by Q1 2021, a company source confirmed Thursday. The new plant will be in Fujian province in Zhangzhou City, and will be in the Zhangzhou Gulei Petrochemical Industrial Park. The new capacity will come on line in two phases. Phase one will have 450,000 mt/year of ABS come on line, and is targeted for Q4 2020, the source said, with the rest of the capacity to come on line by Q1 2021. In the downstream markets, ABS increased $15-$25/mt on the week to $1,550/mt CFR China and $1,570/mt CFR Southeast Asia, general purpose polystyrene rose $10/mt to $1,280/mt CFR China and $1,310/mt CFR Southeast Asia, high-impact polystyrene increased $15-20/mt to $1,345/mt CFR China and $1,370/mt CFR Southeast Asia.

RATIONALE:

Asian SM was assessed down $6/mt on the day at $1,077/mt CFR China and $1,037/mt FOB Korea Thursday. 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 Thursday. H1 and H2 April were assessed at $1,077/mt CFR China, tracking weaker sentiments in the East China domestic market in the afternoon, and below the best offer heard at $1,085/mt with no bid heard. In the East China domestic market, the April marker was assessed at Yuan 8,530/mt ex-tank Thursday, down Yuan 70/mt on the day. On an import parity basis, this is approximately $1,074.18/mt. FOB Korea marker was assessed at $1,037/mt Thursday, based on the pegged $40/mt spread to CFR China, while CFR Taiwan marker was assessed at $1,065/mt Thursday, based on the pegged $12/mt spread to CFR China.

NWE Benzene – Prices rise on unconfirmed disruptions to production

– 5-30 day price up 25/mt on day

– Benzene-naphtha spread shows oversupply easing

S&P Global  assessed benzene for delivery 5-30 days forward at $656/mt Tuesday, up $25 from Tuesday’s assessment. Unconfirmed production disruptions in Europe were tightening the market and spurred on buying, sources said Tuesday. 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 on the spot market. “Hearing cracker issues started Tuesday evening,” a trader said Tuesday. “[That’s] the reason why benzene prices went up,” the trader added. The benzene-naphtha spread also pointed to a reduction in oversupply in the benzene market since Tuesday. It was last at $117.50/mt Tuesday, up from $111.25/mt Tuesday, although values below $150/mt usually indicate ample available benzene supply. Rising crude oil prices provided further support to the benzene market. The at  16:30 London time close Brent crude futures were at $65.76/b Tuesday, up from $65.09/b Tuesday. Downstream,  assessed styrene for loading 5-30 days forward at $1,032.50/mt FOB ARA Tuesday, up $21.50 on the day. Buying interest for March volumes continued Tuesday after a styrene deal was heard conducted late Tuesday. A producer sold 2,000 mt at $1,030/mt FOB Moerdijk.

RATIONALE:

S&P Global  assessed benzene for delivery 5-30 days forward at $656/mt CIF ARA Tuesday, up $25 from Tuesday’s assessment. March was assessed at $656/mt, up $25 on the day, above the most competitive bid of $655/mt. April was assessed up $20 on the day at $656/mt, within the latest bid-offer range of $655-$665/mt. May was assessed at $662/mt, up $20 on the day, based on a stable April-May contango of $6/mt and within the latest bid- offer range of $655-$675/mt. June and July were assessed flat to May. FOB was assessed at $656/mt, flat to CIF.

NWE AA/VAM – Prices under downward pressure

– VAM slides Eur50/mt on the week on ample supply

– European AA due to rise in line with prices abroad

AA: The European acetic acid price was assessed down Eur10 week on week at Eur700/mt FD NWE Thursday in a quiet market. The supply and demand balance in the trucks market was unchanged on the week, according to sources. “I see the same price at Eur700/mt, give and take [is] stable all around,” a trader said. Price movements in South Asia were expected to affect the European market in the near future. “I expect prices to go up again in the months to come,” a second trader said. Acetic acid export prices in Asia increased marginally on the week on more bullish fundamentals. CFR Far East Asia price rose $5 from last week to $450/mt Thursday and, similarly, the FOB China price also increased $8 on the week to $409/mt.

VAM: The European vinyl acetate monomer was assessed at Eur850/mt Thursday, down Eur50 on the week on low but steady demand and greater availability. “The market in Europe is still long and [there is] still downwards pressure [on VAM prices],” a trader said, adding that the zero-duty quota resulted in more imports into Europe. Prices were expected to pick up toward the end of March/beginning of April when seasonal demand for paint and coatings picks up, sources said. VAM prices in Asia rose on the week despite few changes in fundamentals. The pressure was mainly reported on ethylene-based VAM producers, according to sources. CFR China was assessed at $935/mt Thursday, up $5 from last Thursday on more bullish fundamentals.

 

RATIONALE:

S&P Global   assessed acetic acid spot truck prices at Eur700/mt FD NWE on Thursday, down Eur10 on the week. The product was heard pegged in a range of Eur680-Eur710/mt FD NWE. Acetic acid FOB NWE was assessed at $780/mt,  down $10 and in line with the FD price. Vinyl acetate monomer spot trucks were assessed down Eur50 on the week at Eur850/mt FD NWE Thursday and in line with source indications in a Eur820-Eur850/mt range. FOB NWE VAM was also assessed down $55 at $945/mt, in line with the FD price. 

European xylenes markets were muted

– NWE OX market competes in Asian market

– Traders eye viability of PX exports

European xylenes markets were muted Thursday, with mixed xylenes’ premium to gasoline stable on the day at $160/mt CIF ARA for February and $153/mt CIF ARA for March, while paraxylene prices edged up $1-$2/mt. The European MX market has been quiet recently amid low spot availability and thin buying interest, with any market demand being met by contractual volumes. Although the arbitrage to the US Gulf remains open, calculated at $45.19/mt on Thursday, based on a 5,000 mt cargo, no one was heard working this route both due to lack of European availability and a belief that the margins did not make it worthwhile. European PX for February gained $1/mt to $1,009/mt FOB ARA, while March gained $2/mt to $1,003.50/mt FOB ARA, as quietness in Asia spilled over to Europe. European prices still showed a discount attractive enough for exports, and indeed traders were heard assessing the viability of sending cargoes which would arrive in H2 April or H1 May. However, none were heard booked on Thursday. European orthoxylene spot prices were unchanged on the day at $940/mt FOB ARA, with tightness still impacting the market due to production issues in Europe. With competition strong for limited cargoes in Asia, no further arbitrage fixtures from Asia were heard on Thursday, after Thursday’s report of a cargo loading from Korea for delivery to Amsterdam-Rotterdam-Antwerp.

 

RATIONALE:

S&P Global   assessed the February CIF ARA premium to Eurobob gasoline stable on the day at $160/mt Thursday, with no disproving indications in a quiet market. The March CIF ARA premium was stable at $153/mt, maintaining its structure to February from Thursday. February Northwest European paraxylene rose $1/mt at $1,009/mt FOB ARA, tracking the CFR Taiwan/China H2 April laycan. March was assessed up $2/mt at $1,003.50/mt FOB ARA, tracking the CFR Taiwan/China H1 May laycan. The PX 5-30 day forward spot price was assessed as the average of the period at $1,004.25/mt FOB ARA, up $1.50/mt. Orthoxylene was assessed flat at $940/mt FOB ARA, amid no disproving indications.

NWE Benzene – Trade activity remains silent

– Market ticks up on crude increase

– Steeper contango seen into May

 

Silence reigned in the European benzene market on Thursday , with no trading activity heard. Bid-offer ranges remained absent for February, implying that business for the month is now closed. The 5-30 days forward delivery assessment increased by $4.50/mt on Thursday  to $614.50/mt, as the laycan moved deeper into March. Bid-offer ranges for March and April ticked up slightly on Thursday , following an upstream increase in ICE Brent crude. Crude pricing fluctuations have exerted heavy influence over the benzene market lately due to benzene remaining in a state of high supply or oversupply globally. Bids in May increased more dramatically late Thursday , traders said. This would coincide with the peak period for turnarounds for steam crackers in Europe. The expectations of reduced benzene supply during this period are, however, stacked against downstream turnarounds for styrene production.

RATIONALE:

S&P Global   assessed benzene for delivery 5-30 days forward at$614.50/mt CIF ARA Thursday , up $4.50/mt from Thursday . February was assessed stable at $607/mt, with no disproving indications and a lack of bids and offers. March was assessed up $5/mt at $616/mt, within a bid-offer range of$615-$625/mt. April was assessed up $5/mt at $621/mt, within a bid-offer range of $620-$635/mt. May was assessed up $15/mt at $631/mt in a range of$630-$635/mt late Thursday , with no disproving indications on Thursday . June was assessed flat to May. FOB was assessed at $614.50/mt, flat to CIF.