The Chinese methanol Chemical Industry ended the week on a muted note. Offers ranged from $280/mt to $305/mt CFR for May-arrival but buying interest was tepid. Traders rued that bids were few and buying sentiment weak. In Taiwan, fundamentals were stable to a little bearish, with end-users ensconced in sufficient inventory. “In March, most Chemical Industry participants expected April demand to be better, but formaldehyde demand is bad because the plywood industry, which is related to construction and real estate, is not so good in Taiwan,” a trade source said. He added that their term supplier had pushed them to lift more term cargoes, but he declined as he had more than enough stock. In South Korea, domestic Chemical Industry was stable and discussions for imported cargoes were thin. In Southeast Asia, trade sources said the market was a little firm in the first half of May, but a number of Middle Eastern cargoes were arriving in the region from May 15 and cargoes were being offered at $330/mt CFR for Southeast Asian main ports.
Methanol was assessed at $298/mt CFR China Friday for cargoes delivered 20-50 days forward, unchanged day on day, amid stable Chemical Industry fundamentals. Domestic east China prices edged up Yuan 5/ mt to Yuan 2,455/mt Friday and were up Yuan 15/mt week on week, amid discussions at Yuan 2,450-2,460/mt. The CFR Southeast Asia marker was assessed at $335/mt Friday, up $2/mt day on day after taking into consideration a $5/mt backwardation between H1/H2 May. The CFR Korea marker was stable on week at $327/mt CFR, under a selling idea of $328/mt CFR for a 5,000 mt cargo arriving in H2 May. The Taiwan marker was stable week on week at $303/mt CFR amid thin discussions and stable Chemical Industry fundamentals.
Asian benzene prices were stable to up $3.66/mt on day amid gains in global benzene prices and crude oil futures. With laycan declaration for May FOB Korea material concluded Friday, H2 May offers emerged Friday, with supply heard more than demand for benzene loading. June FOB USG paper was assessed unchanged on the day at 228 cents/gal Friday, or $681.72/mt, and the spread between May FOB Korea and and June FOB USG paper stood at $52.05/mt. While spot freight between South Korea and the US was heard at $60-$65/mt, market sources acknowledged that with a contract of affreightment, freight rates could be lower. With 20,534 mt of benzene loaded from Korea for shipment to the US between April 1-10, market sources said that it was possible that supply would outweigh demand upon arrival of the material. Nonetheless, demand for benzene in the US continued to be heard firm. Over in the CFR China market, trading continued to be heard thin. With poor CFR China demand, CFR China prices have been below that of FOB Korea since April 1. S&P Global assessed the CFR China/FOB Korea spread at minus $21.33/mt Friday. Amid negative spreads, both buyers and sellers were heard not keen to discuss prices.
FOB Korea benzene was assessed up $3.66/mt on the day at $633.33/mt Friday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 May, H2 May and H1 June. During the Market on Close assessment process Friday, no transparent bids or offers were seen. The H1 and H2 May laycans were assessed at $632/mt FOB Korea, widening the May/June spread to minus $4/mt Friday from minus $2/mt Friday, based on available supply for H2-May-loading material. The H1 June laycan was assessed at $636/mt FOB Korea, above a bid last at $635/mt. The CFR China marker was assessed down $3/mt on the day at $609/mt Friday, below sell indications for May-arrival material heard at $610/mt CFR China. The East China marker was assessed up Yuan 10/mt on the day at Yuan 4,417/mt, or $571.18/mt on an import-parity basis.
– 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.
Benzene was up $8/mt in Europe on Thursday, with the CIF ARA 5-30 days forward loading assessment at $724/mt. Despite a trade heard for April laycans, activity in the market was sparse, with few bids and offers heard from elsewhere. Ranges may be developing for the first half of May, a trader said, implying some immediate shortness in the front end of the month. But the overall global supply situation for benzene remained long, he said, with little expected to change that. Some upheaval is anticipated by the market in the coming months, as both steam crackers and styrenics production units enter turnarounds. On the whole, benzene prices have been carried upwards by a bullish crude market this week. The upwards trend for crude continued on Thursday, with the ICE Brent 16:30 London assessment up 70 cents to $71.37/b.
S&P Global assessed benzene for delivery 5-30 days forward at $724/mt CIF ARA Thursday, up $8/mt from Tuesday. April was assessed up $9/mt at $730/mt, based on a trade heard at this level on Thursday. May was assessed up $9/mt at $715/mt, keeping a backwardation of $15/mt to April amid no disproving indications. June was assessed at $704/mt, up $9/mt in line with May. July was assessed at $703/mt, up $9/mt in line with June. August was assessed flat to July. FOB was assessed at $724/mt, flat to CIF.
The Asian naphtha market remained under downward pressure due to lukewarm buying interest from Far East Asian end-users for H2 May delivery clips as some crackers in Northeast Asia were shut for scheduled maintenance, sources said Thursday. In addition, an aromatics plant outage at Taiwan’s privately-owned Formosa Chemicals and Fibre Corp. (FCFC) has reduced Formosa Petrochemical Corp.’s (FPC) requirements for heavy naphtha and may have some impact on its steam cracking naphtha demand. FPC will not be seeking heavy naphtha for second-half May delivery, while its paraffinic naphtha requirements were still unclear after Sunday’s explosion and fire at one of its aromatics plants, a company spokesman said. An explosion and subsequent fire that broke out at FCFC’s No. 3 aromatics plant at Mailiao resulted in disruption to the link that diverts pygas from the cracker unit. “The feed into that aromatics plant is pygas produced by their cracker, so if the aromatics plant is shut down due to the explosion, then the cracker cannot run and store the pygas produced,” a Singapore-based market source said. Formosa’s cracker was heard running at lower rates due to the shutdown of the aromatics unit, a Singapore-based LPG trader said. This could not be confirmed with Formosa. One of the company’s olefins buyers said that Formosa is still attempting to run its steam cracker at 100%. Reflecting the weaker market, the CFR Japan naphtha crack against front-month June ICE Brent crude futures contract fell to $37.25/mt at the Asian close Tuesday, down from $41.43/mt the previous day. The crack was pegged at $40.20/mt at 0300 GMT Thursday. Spot cash differential for CFR Japan naphtha fell to a near three-month low of $4.25/mt Tuesday. The differential was last lower on January 15 at $3/mt, S&P Global data showed. Meanwhile, supply continued to stream out from India. State-owned refiner Bharat Petroleum Corp. Ltd. was offering 35,000 mt of naphtha with minimum 76% paraffin and maximum 350 ppm sulfur for May 2-3 loading from Kochi in a tender closing April 12, with same-day validity. In plant news, India’s state-owned Hindustan Petroleum Corp. Ltd.’s 8.3 million mt/year Vizag refinery on the east coast is running normally after a major fire disrupted operations for a couple of hours over the weekend, company officials said. The fire broke at the continuous catalytic reformer on Thursday afternoon and was contained in about half an hour. “The refinery operation is smooth with no hiccups,” a refinery official said.
ACETONE Chemical Industry: US acetone prices were steady on the week as sources continued to eye an ongoing anti-dumping duty investigation. The US International Trade Commission has removed Saudi Arabia from the investigation but continues to investigate charges lobbied against Belgium, Korea, Singapore, South Africa and Spain. There was little change in fundamentals this week as the Chemical Industry continued to be talked long with pricing soft. Acetone prices were last heard in the low-30s cents/lb range as upstream propylene values posted slight gains on the week. Refinery grade propylene prices were up slightly on the week, gaining .75 cents to 21.50 cents/lb. Acetone production costs were estimated this week at near 17.20 cents/lb, according to S&P Global data.
PHENOL Chemical Industry: The US phenol market remained tight this week amid healthy demand and continued strength in the upstream benzene Chemical Industry. Prices rose recently on the back of gains in the April US benzene contract, which rose 23 cents to 225 cents/gal. Sources anticipated flat to higher pricing going forward as benzene prices have continued to inch higher and were last assessed at 229 cents/gal DDP USG. Supply side conditions could improve as sources have said that previously announced force majeures were lifted, however, producer confirmation was not available at time of publication. In pricing, sources continued to talk export adders at 18-20 cents above the April benzene contract. Adders for the domestic Chemical Industry were last heard at 15-17 cents/lb. In Asia, phenol values fell sharply on the week, shedding $90 to $1,010/mt CFR China on the back of waning demand.
IPA Chemical Industry: Export and domestic isopropyl alcohol pricing was stable on the week at $1,213/mt FOB USG and $1,257/mt DER. In the absence of firm indications, the assessment considered small changes in upstream refinery-grade propylene. RGP was stable on the week at 21.25 cents/lb (Chemical Industry). In producer news ExxonMobil announced in a letter to customers that it will increase prices for some oxygenated fluids, including IPA. IPA pricing is set to increase by 5 cents/lb, effective April 12.
ETAC Chemical Industry: Ethyl acetate pricing was assessed flat on the week at $945/mt FOB USG and $989/mt DER, considering only small changes in upstream pricing. Acetic acid was assessed stable on the week Thursday at $577/mt FOB USG while ethylene was up just a penny on the week Thursday. BUTAC: Butyl acetate saw no change on the week at $1,101/mt FOB USG and $1,145/mt DER (Chemical Industry). In the absence of firm indications, the assessment considered stable upstream pricing. Acetic acid was assessed stable on the week Thursday at $577/mt FOB USG while N-butanol was also flat at $760/mt.
INDUSTRIAL ETHANOL Chemical Industry: Industrial ethanol pricing was assessed flat on the week at 270 cents/gal FOB DSP for 190-proof and 295 cents/gal FOB DSP 200-proof. Both assessments considered minimal changes in its fuel-grade counterpart with the Chicago Argo assessment down 1.95 cents on the week, assessed Thursday at 130 cents/gal. The spread between the 190- and 200-proof grades typically ranges between 15-25 cents/gal, per Chemical Industrial market feedback.
Acetone/Phenol Chemical Industry: Acetone supply was still long in Europe this week, with no sign of the Chemical Industry balancing soon, sources said. “It is free-fall indeed,” a source said. “Producers have to react now. It is crazy.” The spot price fell Eur15/mt to Eur425/mt FD NWE, within indications heard in a range of Eur400-mid-Eur400s/mt. Offer levels heard at Eur550-560/mt were not corroborated. On the other hand, phenol premiums over benzene rose Eur25/mt week on week to Eur600/mt FD NWE, at the lower end of a producer’s range at Eur600-650/mt. “There is spot demand; the issue is there isn’t the supply,” a source said. Although there was talk of reducing run rates because of high acetone stocks, this was not thought to be imminent. “At the moment we don’t need to reduce run rates because stocks are still healthy, but if the situation continues, there is only so much we can lose [on acetone chemical industry],” a producer said. “If we reduce run rates, it could be bad for contractual commitments.”
IPA/MEK Chemical Industry: Methyl ethyl ketone spot prices rose again this week, up Eur25/mt at Eur1,375/mt FD NWE, within indications at Eur1,350-1,400/mt. The impact of production issues in Taiwan was still being felt in the European market. On the other hand, isopropyl alcohol spot prices were steady week on week. The Chemical Industry is balanced and increases in line with the higher April propylene contract price settlement had already been done. Spot was assessed stable at Eur1,025/mt FD NWE, in line with an indication and within a range at Eur1,000-1,050/mt.
ETAC/BUTAC Chemical Industry: Sentiment in the etac Chemical Industry was fairly mixed this week, with some saying increases could be seen because of delays to shipments out of the US Gulf. However, on the whole, there supply was heard to be healthy in the Amsterdam-Rotterdam-Antwerp hub and that increases had only been seen by a select number of participants affected by the delays. Others said there had been no issues sourcing material. Spot prices fell Eur10/mt to Eur910/mt FD NWE, within a range of Eur870-1,000/mt. The top end of the range was not corroborated. The butac Chemical Industry was maintained the quiet of recent weeks, with spot prices stable at Eur1,050/mt FD NWE, at corroborated indications and within a range of Eur1,040-1,060/mt.
European buying interest emerged Wednesday as a total of 5,000 mt traded for April and Mayat $1,100/mt. The trades — a 3000 mt cargo for April and a 2,000 mt cargo for May — come as the styrene Imported data prepares for the start of the turnaround season concentrated in the second quarter. The Shell POSM 450,000 mt/year plant maintenance in Moerdijk is said to be the biggest of the maintenance works, lasting six to seven weeks. “The high volume of trades is due to the Moerdijk turnaround as well as strike action. There is no cheap replacement at the moment,” a trader said. “If (Imported data) try to buy at the US level and include freight you reach that price level.” In Asia, sources said that while the Formosa Chemicals explosion and fire incident did not have an impact on the company’s styrene plant, the resulting loss of benzene production would have an effect on the styrene Imported data. In China, petrochemical plants are facing stricter safety inspections following previous explosions. The Market remained uncertain of the impact of the safety checks on the styrene (Imported data).
S&P Global Wednesday assessed styrene for loading 5-30 days forward at $1,101/mt FOB ARA Wednesday, up $25/mt on the day. April was assessed at $1,101/mt, up $25/mt on the day, $1 above the bid at $1,100/mt following an earlier trade at $1,100/mt. May was assessed at $1,101/mt, also up $25/mt on the day, $1 above the bid at $1,100/mt following an earlier trade at $1,100/mt. This kept April and May at parity (Imported data).
Premiums for European toluene dropped $6/mt on Wednesday, taking both April and May assessments down to $124/mt above Eurobob gasoline. A broad range of indications was heard from the market, with multiple sources pegging value between $105-$125/mt. On an outright basis, a distributor pegged value at $775/mt while a trader put the CIF ARA value at $765/mt for TDI grade toluene. Sources continued to point to a lack of demand in Europe for material, and a lack of possible arbitrage into the US Gulf as reasons for the premium to continue downwards. This also pushed against direction in the upstream energy market, where gasoline and crude oil continued to move higher. More supply was also inbound to the flush European market from the Mediterranean, a trader said, with no space for storage. “Material will definitely have to go out of Europe,” he said.
S&P Global assessed the CIF ARA toluene premium over Eurobob gasoline at $124/mt for April on Wednesday, down $6/mt from Wednesday. A trader said there was an offer in the market at $125/mt. This fit with indications in the market heard in a range of $100-$125/mt. The May premium was assessed at $124/mt, flat to April.
Benchmark FOB Korea laycans in the Asian benzene market rolled forward Tuesday amid a steep $18-$20/mt contango between the April and May. A positive benzene-naphtha spread supported benzene prices, flipping to $20.08/mt Tuesday after being negative last Tuesday and hitting a decade low of minus $18.25/mt the day before. While the price spread between benzene and naphtha has hovered below breakeven levels of around $150/mt since the fourth quarter of last year, sources had earlier said firm paraxylene margins were supporting refinery profits. Demand was thin for CFR China benzene Tuesday, although the East China market was finding its footing after China’s value-added tax was reduced to 13% from 16% on Tuesday in a bid to support the domestic manufacturing economy. In South Korea, benzene exports totaled 236,146 mt in March, up from 230,768 mt in February, latest customs data showed. Exports to the US comprised 29,565 mt or 13% of the total, in line with an annual pick-up in US demand for South Korean benzene in the second quarter. Inventory levels in East China rose 4,000 mt on the week to 247,000 mt Tuesday. This comes amid lower downstream operating rates in China amid reports the government was conducting checks at plants in Jiangsu province after a blast at a chemical plant in Yancheng, Jiangsu, two weeks ago. While an end-date to the checks is not known, market sources said more plants were expected to shut as the checks progressed.
Benzene was assessed up $26.33/mt from Tuesday at $582.33/mt FOB Korea Tuesday amid a laycan rollover. The marker takes the average of the third, fourth and fifth half-month laycans, currently H1 May, H2 May and H1 June. During the Market on Close assessment process, a bid for June loading cargo was last seen at $586/mt FOB Korea by GS Caltex. The H1 May and H2 May laycans were each assessed at $580/mt FOB Korea, narrowing the May/June spread to minus $7/mt, above a bid last seen at minus $8/mt. The H1 June laycan was assessed at $587/mt, above GS Caltex’s bid and below an offer at $589/mt FOB Korea. The CFR China marker was assessed up $9/mt from last Tuesday at $559/mt, tracking gains in domestic East China prices. The East China marker was assessed up Yuan 77/mt over the same period at Yuan 4,360/mt, equating to $562.97/mt on an import parity basis.
Market participants in the spot USG MTBE market assessed the impact of shipping delays in the Houston Ship Channel Wednesday, as pricing remained flat to Northwest Europe. On Wednesday, the Houston Ship Channel was declared open to all traffic by the Captain of the Port, though transits through the contamination zone were limited to one-way daylight transits. Water contamination in the Houston Ship Channel began to cause delays Friday, with market participants still assessing the impact Wednesday morning. “Shipping delays are affecting just about everything,” one source said, while a second corroborated the claim. A third source also considered upstream methanol constraints caused by logistics in the region. “Might see some supply disruptions from lack of feedstock.” Related energy weakened on the day, with NYMEX April RBOB down 6.02 cents to $1.8955/gal. Blended and shipped values were last estimated at 274 cents/gal, while the MTBE factor relative to gasoline was at 1.0830. In other regions, the FOB Singapore marker was up $5/mt (about 1.41 cents/gal) to $724/mt (about 203.71 cents/gal).
Spot USG MTBE was assessed at 203.15 cents/gal FOB USG, down 4.64 cents on the day. Gulf Coast pricing was kept flat to its Northwest European counterpart, unchanged on the day.