Sell & Procure

NWE Styrene – Spot prices rise as market seeks forward cargoes

Chemical Industry

– May trades at $1,133/mt

– Chinese stocks decline

European spot styrene rose Thursday as market participants sought to secure volumes for forward deliveries. S&P Global  assessed styrene for loading 5-30 days forward at $1,133.50 /mt FOB ARA, up $4.50/mt on the day. A trade was heard at $1,133/mt FOB ARA for May loading. Buy interest was again the talking point as global turnarounds continue to halt supply. A trader said May traded several times. As trading moved to forward months, a source said there was still interest for prompt cargoes following April trades Thursday and Thursday. “April still has some demand so [it] is pretty strong,” a broker said. Upstream, the European benzene market surged following news of trades for both May and April. A deal was heard done at $765/mt for April and $725/mt for full-May. In Asia, styrene rose $9/mt on the day to $1,062/mt CFR China and $1,022/mt FOB Korea Thursday. According to market sources, total styrene stocks in east China fell 23,000 mt on the week to 227,000 mt. Consumption at 38,000 mt outstripped arrivals of 15,000 mt.

RATIONALE:

S&P Global  assessed styrene for loading 5-30 days forward at $1,133.50/mt FOB ARA Thursday, up $4.50/mt on the day. April was assessed at $1,135/mt, up $5/mt on the day, based on a stable $2/mt backwardation to May. May was assessed at $1,133/mt, up $5/mt on the day, in line with earlier trade at $1,133/mt.

 

Asian PX: Gains $3/mt on day amid rangebound discussions Wednesday

Chemical Industry

– Production disruption at FCFC likely to persist

– June trades twice at $1,052/mt CFR Taiwan/China

Asian PX prices edged $3/mt higher on Wednesday at $1,055/mt CFR Taiwan/China and $1,036/mt FOB Korea, with market discussions rangebound amid quiet market. The impact from the unplanned outage at Taiwan’s Formosa Chemicals and Fibre Corp. No. 3 aromatics plant remains unclear, following a fire that lead to a shutdown on Sunday. Some market participants were of the view that the plant would likely be shut for at least a month to conduct repairs, leading to an estimated production loss of 74,000 mt. A prolonged shutdown of the plant may lead to a tighter May PX market, resulting in a dearth of May delivery offers on the market, as sellers held back to observe the market. The May/June backwardation was assessed at $9/mt Wednesday, unchanged on the day as June delivery cargoes continue to come under heavy pressure from the start-up of Hengli Refining and Chemical Co.’s PX unit in northeastern Dalian, which should lead to a continued widening of the May/June backwardation, traders said. During the Wednesday Market on Close assessment process Wednesday, an outstanding Asian-origin May bid from Hengli at $1,061/mt remained at the end, with no market participant expressing any interest, while an outstanding June offer from Oman Trading International at $1,058/mt also failed to attract any buying interest. There were two trades concluded on the MOC, both for June delivery at $1,052/mt CFR Taiwan/China.

RATIONALE:

Asian PX prices were assessed up $3/mt day on day at $1,055/mt CFR Taiwan/China and $1,036/mt FOB Korea Wednesday. The markers take an average of the H2 May and H1 and H2 June laycans. The H2 May laycan was assessed at $1,061/mt, above an outstanding open origin May bid from GS Caltex at $1,060/mt. The June laycans were assessed at $1,052/mt CFR Taiwan/China, at the level of the last June trade between BP Singapore and Mercuria, and above an outstanding Asian origin June bid by GS Caltex at $1,051/mt, which was normalized due to a restriction in origin. The June laycans were also assessed at a $9/mt backwardation to the H2 May laycan, unchanged on the day. The above rationale applies to the following market data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

 

NWE Xylenes – MX trading stalemate broken; supply still long

– No impact on NWE PX from Formosa shutdown: sources

– PX, OX negotiations ongoing

The stalemate that has persisted between buyers and sellers in the mixed xylene market since the end of March was broken Wednesday as trading activity emerged. The April premium over Eurobob gasoline gained slightly as a result, up $8/mt on the day at $113/mt CIF ARA. Demand emerged for April 20-30 delivery, though there were still cargoes heard to be arriving in H1 April and loading H2 April in the Mediterranean. “MX is still long,” a trader said. “There is still some volume in the ARA market and no demand.” The May premium was stable at $105/mt CIF ARA. The European paraxylene market remained quiet Wednesday, despite the shutdown of Formosa Chemicals and Fibre Corp.’s No. 3 aromatics plant at Mailiao, Taiwan, affecting the paraxylene market in Asia. “I don’t expect much impact on the European market. They [Formosa’s customers] will get supply from Asia,” a trader said. “I don’t think European cargoes will replace the lost volume.” Orthoxylene spot pricing in Europe was also stable, with little activity heard Wednesday. In contract news, negotiations for April settlements of paraxylene and orthoxylene are ongoing, with both appearing to be tricky this month. In the paraxylene market, spot pricing has taken a sharp downturn since the March settlement. In the orthoxylene market, European supply is still low and is being balanced by Korean imports.

RATIONALE:

S&P Global Wednesday assessed the M1 April mixed xylenes CIF ARA premium over Eurobob gasoline up $8/mt on the day at $113/mt Wednesday, at the level of a trade in the Market on Close assessment process. Stasco sold 1,000 mt to Total for April 20-30 delivery. The May premium was stable at $105/mt CIF ARA, amid no disproving indications. April Northwest European paraxylene was stable at $910/mt FOB ARA, in line with an indication by a trader. May was stable at $910/mt FOB ARA, maintaining parity with April. The paraxylene 5-30 day forward spot price was assessed as the average of the period at $910/mt FOB ARA, stable on the day. Orthoxylene was assessed stable at $1,020/mt FOB ARA, amid no disproving indications.

PTA Chemical Industry

Imported Data

Market sentiment causes volatile Chinese PTA „„

PTA imports cheaper post VAT revision

Asian purified terephthalic acid spot trade discussions were quiet Friday amid the Chinese Chemical Industry. The PTA CFR China Chemical industry was relatively stable this week, but the China domestic PTA prices fell by Yuan 195/mt early this week, followed by a rebound of Yuan 170/mt day on day Friday. Chinese trade participants were speculative this week amid the turnaround news. “Even though Chinese PTA prices were volatile this week, the overall trend remains stable within a longer time frame [of around 2-3 weeks],” a PTA buyer said, adding that price fluctuation was mainly driven by chemical industry sentiment. With the value added tax cut from 16% to 13% effective April 1, PTA imports became cheaper than China domestic products, with the average spread of around $11/mt this week. As a result, there were active buying inquiries heard, with CFR China deals closed for 2,000 mt-20,000 mt cargoes from northeast Asia. Similarly, even though upstream PX was volatile throughout this week, the CFR Taiwan/China marker was assessed at $1,039.88/mt in average this week, similar to the average of $1039.65/ mt last week. In India chemical industry, demand from the textile sector was heard to have not improved, leading to accumulation in polyester finished goods, a few producers said. The inventories were high enough to meet demand for the next three weeks, sources said. Nevertheless, there were “still no major production cuts” in the polyester sector amid expectations of improvement, leading to healthy demand for PTA, sources said. Spot discussions were scarce for CFR India Chemical Industrial market this week. In plant news, China’s TongkunGroup plans to shut its 2.2 million mt/year PTA line in Zhapu, Zhejiang, for around 15-20 days of maintenance from early April, a company source said Friday. China’s Hengli Petrochemical plans to shut its 2.2 million mt/year No. 1 PTA unit in Dalian for 15 days maintenance from April 15, a company source said Friday. China’s Fujian Fuhaichuang Petrochemical plans to shut its 1.6 million mt/year paraxylene and 4.5 million mt/year PTA plants in Gulei, Fujian province, early May for at least two weeks, a company source said Friday (chemical industry). Separately, multiple chemical plant explosions in China increased concerns over stricter safety inspections. According to market sources close to major polyester and purified terephthalic acid companies in east China, there has not been any official statement yet regarding shutdown for safety inspection. The sources added that the impact was “terrible” with stricter safety regulations expected soon.

Rationale

The CFR China PTA Chemical Industrial price was assessed flat day on day at $840/mt on Friday for 15-30 days forward cargoes, with scarce discussions amid the Chinese public holiday. China prompt domestic price was assessed flat at Yuan 6,510/mt over the same period for the Chemical Industry. Both CFR Southeast Asia PTA and CFR India PTA were assessed down $5/ mt week on week at $850/mt on Friday, amid scarce spot discussion this week, keeping the spread at $10/mt against CFR China.

 

Chemical Industry
Chemical Industry

Asian Styrene: Slides $30/mt on week; assessed $1,042.50/mt CFR China

Imported data

– Consumption picks up slower than expectation

– ABS held stable, GPPS/HIPS rises $10/mt

Asian styrene monomer slid $30/mt on the day to a two-month low of $1,042.50/mt CFR China and $1,002.50/mt FOB Korea Thursday as consumption has been picking up much slower than market expectation. This is the largest day-on-day decline in approximately four months. Further, feedstock benzene CFR China decreased by $12/mt on the day to $591.50/mt Thursday as Sinopec, a major Chinese benzene producer, has cut its domestic ex-tank benzene price by Yuan 150/mt to Yuan 4,650/mt. In the east China domestic market, prices fell throughout the day with the prompt marker down Yuan 200/mt on the day at Yuan 8,070/mt ex-tank Thursday. According to market sources, styrene inventory in east China fell 28,500 mt on the week at 325,000 mt, where consumption of 35,500 mt outstripped arrivals of 7,000 mt. Despite the week-on-week decline, sources said that total inventory remains considerably high and consumption has been weaker than expected, leading to bearishness in the market. “Market has been concerned about the record high styrene inventory in east China and all eyes have been on the week-on-week change. Persistently high inventory and slow demand recovery have eventually led to a crash in prices,” a market source said. Sources further noted that SM buying sentiments will likely be affected as prices softened. In trade statistics news, Thailand’s styrene imports increased 159.9% on the month, or 1,794.9% on the year, to 11,540 mt in February. In related downstream markets, week on week, acrylonitrile-butadiene-styrene were unchanged at $1,560/mt CFR China and $1,580/mt CFR Southeast Asia, general purpose polystyrene rose $10/mt to $1,290/mt CFR China and $1,320/mt CFR Southeast Asia while high-impact polystyrene increased $10/mt to $1,345/mt CFR China and $1,370/mt CFR Southeast Asia Thursday.

RATIONALE:

Asian SM was assessed down $30/mt on the day at $1,042.50/mt CFR China and $1,002.50/mt FOB Korea Thursday. The markers currently take the average of the H2 April and H1 May laycans. There were no transparent bids or offers during the Thursday Market on Close assessment process on Thursday. H1 May was assessed at $1,044/mt CFR China, between the best bid heard at $1,040/mt against the best offer heard at $1,045/mt. Maintaining the pegged April/May spread of minus $3/mt, H2 April was assessed at $1,041/mt CFR China, below a normalized any April offer heard at $1,040/mt. The any April offer is restrictive as half-month delivery laycan declaration has already passed. In the East China domestic market, the prompt marker was assessed down Yuan 200/mt on the day at Yuan 8,070/mt ex-tank, equating to $1,015.85/mt on an import parity basis. The FOB Korea marker was assessed at $1,002.50/mt, based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,030.50/mt, based on the pegged $12/mt spread to CFR China.

Asian Iso-MX: Prices unchanged amid dearth of CFR offers

Chemical Industry

– China domestic prices rise

– MX blending MX into gasoline seen in China

 

Bids from China were seen in the isomer-grade mixed xylene market Tuesday at around $680/mt CFR China for April delivery, traders said. A fresh bid was heard Tuesday at $680/mt CFR China, also for April delivery. A market source said although MX offers were thin on the ground, the offer level into China has heard to be around $690-$695/mt CFR China for April delivery. China’s domestic market was rising Tuesday, with prompt delivery cargoes heard offered at around Yuan 5,620-5,650/mt ($695.80-712.19/mt) ex-tank East China, a source said. Higher Chinese domestic values were being prompted by gasoline blending demand for MX, a market player said. China domestic PTA prices were also bullish on Tuesday, rising to Yuan 6,610/mt from Yuan 6,530/mt on Tuesday. Parazylene prices were stable to higher over the same period. Freight rates for a 3,000 mt April isomer-MX parcel were in the range of $20-$21/mt between South Korea and Taiwan and $20-$25/mt between South Korea and China for April, market sources said.

RATIONALE:

Isomer-MX was assessed unchanged from last Tuesday at $671/mt FOB Korea and up $2/mt at $689/mt CFR Taiwan Tuesday. The markers take the average of the third and fourth half-month laycans, currently H1 and H2 April. No bids or offers were registered during the  Market on Close assessment process. No bids or offers were heard on an FOB Korea basis durng the MOC process. The April laycans were each assessed at $671/mt FOB Korea, unchanged from last Tuesday. Market discussion was heard with buying ideas around $680/mt CFR Taiwan/China for April delivery and selling ideas around $690-$695/mt CFR China. The above rationale applies to the following market data codes: PHAUV00 for FOB Korea and PHAUT00 for CFR Taiwan.

toluene price updates
toluene price updates

Asian Toluene: Stable in thin trade

– Domestic Chinese prices unchanged on day

– Demand picking up ahead of gasoline season

(CORRECTION: This corrects the first line of the March 1 commentary, the correct sentence is as follows ‘The CFR China was assessed at $662/mt Tuesday, up $8.50/mt from Tuesday’) Demand in the Asian toluene market was expected to improve in the near term, in the months leading up to the peak gasoline blending season in July to September. Trading activity was muted Tuesday as it was the beginning of the week and market participants had yet to begin discussions in earnest. Domestic Chinese prices were assessed at Yuan 5,320/mt Tuesday, unchanged from Tuesday, or $653.26/mt on an import parity basis. April bids were heard from $635-$639/mt FOB Korea, but attracted no selling interest. The best offer was heard at $655/mt FOB Korea later Tuesday. The CFR China market was quiet, with thin discussions heard. An offer was lowered from $675/mt CFR China to $672/mt CFR China, but failed to attract any buying interest.

RATIONALE:

The FOB Korea marker was at $640/mt FOB Korea Tuesday, stable from last Tuesday. The marker takes the average of the third and fourth half-month laycans, currently H1 and H2 April. No transparent bids or offers were seen during the MOC process Tuesday. An April bid was heard at $639/mt FOB Korea against an offer at $655/mt FOB Korea, and was subsequently assessed at $640/mt FOB Korea, within the bid and offer. An April offer was heard at $672/mt CFR China, the CFR China marker was assessed at $662/mt Tuesday, unchanged from Tuesday. CORRECTION (This corrects the March 1 rationale, the correct rationale is as follows: The CFR China marker was assessed at $662/mt Tuesday, up $8.50/mt from Tuesday)

European oxo-alcohols spot prices were stable to higher in the week

European oxo-alcohols spot prices were stable to higher in the week to Thursday, with sources saying the market was largely balanced. Market participants said that demand from the automotive industry was still weak. However, a tightness of 2-ethylhexanol in the US market led to increased buying interest from US consumers on the European spot market, which in turn provided support to European 2-eh spot prices. Additionally, sources said there was a tightness on the dioctyl terephthalate (DOTP) market caused by a delayed shipment from Korea, which contributed to more inquiries for 2-eh used in the process of creating DOTP. “My opinion is that the 2-eh sector is the most dynamic right now with better demand than in the previous weeks,” a producer said. 2-eh was assessed at Eur1,070/mt Thursday, up Eur10 on the week, within a range of Eur1,050-Eur1,100/mt corroborated by several sources and based on indications of a slight uptick in demand. In the butanols market, sources said demand was weak and there was ample availability of Russian iso-butanol in the Amsterdam-Rotterdam-Antwerp region. N-butanol and iso-butanol were assessed at Eur960/mt FD NWE and Eur800/mt FD NWE, respectively, both stable on the week. Prices for n-butanol were assessed based on a Eur950-Eur960/mt range heard corroborated by several sources and indications of weak demand. I-butanol was assessed within a range heard of Eur700-Eur840/mt and based on unchanged fundamentals. Prices in the phthalic anhydride market rose by Eur10 on the week to Eur950/mt FD NWE, corresponding to a value of Eur950/mt heard in the market. On the upstream OX market, supply was tight on unconfirmed production issues which gave support to the PA market. One PA market participant said that he received “quite a few inquiries for product [since] some [PA] suppliers may not have been able to receive enough OX and had to lower their output.”

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Asian phenol and acetone prices moved in different directions between regions this week

Asian phenol and acetone prices moved in different directions between regions this week, with CFR China phenol increasing amid rising domestic prices in China and CFR India phenol falling as earlier supply tightness eased.

PHENOL: CFR China was assessed up $10/mt week on week at $1,070/mt, with domestic China prices heard increasing by Yuan 100-200/mt over the same period to Yuan 8,600-8,700/mt, equating to $1,045/mt on an import parity basis. Offers were also heard at high levels, with one trader indicating a sell idea at $1,200/mt versus a buyer’s idea at $1,020-$1,030/mt, meaning the negotiation gap was wide this week. A Taiwanese end-user said Chinese end-users did not need to buy imports at the moment and international spot prices remained too high for them. However, a trader said the Chinese market was short on supply. In India, supply tightness was easing after a Middle East plant restarted. Market sources pegged the CFR India import price at $1,180-1,200/mt.

ACETONE: CFR China was assessed down $5/mt week on week at $455/mt as a buy idea was heard at $430-$440/mt versus a tradable indication from a trader at $450-$460/mt. The domestic price in China was heard around Yuan 3,600/mt, equating to $435/mt on an import parity basis. The CFR Southeast Asia and CFR India markers were assessed down $5/mt at $515/mt and $500/mt, respectively, tracking the movement in the CFR China market.

Crude Solvent Suppliers in India
Crude Solvent Suppliers in India

Falls $13/mt amid slow demand outlook

Asian styrene monomer fell $13/mt from last Tuesday to $1,074/mt CFR China and $1,024/mt FOB Korea Tuesday on expectations that buying interest from downstream markets would not pick up strongly this week. Discussion remained muted as participants began returning to the market after week-long Lunar New Year holidays. In the east China domestic market, the prompt marker was assessed down Yuan 140/mt from last Tuesday at Yuan 8,430/mt ex-tank Tuesday, equating to $1,056/mt on an import parity basis. Operating rates of producers and buyers in downstream markets were expected to return to normal gradually. “Styrene price movements would depend on the rate at which operations return to pre-holiday rates. Further, new orders are expected to be limited this week,” a market participant in China said. High inventory levels of styrene in east China could also keep prices on a downtrend. The styrene inventory in east China stood at 306,500 mt Tuesday, up 37,000 mt from January 30, market sources said. Feedstock benzene rose $4/mt from last Tuesday to $609/mt CFR China Tuesday, while ethylene rose $15/mt over the same period to $1,100/mt CFR Northeast Asia. SM production margins remain healthy at $106.80/mt, although $20.70/mt lower than a month earlier, according to S&P Global CSG data.

RATIONALE:

Asian SM was assessed down $13/mt from last Tuesday at $1,074/mt CFR China and $1,024/mt FOB Korea Tuesday. The two markers currently take the average of the H1 and H2 March laycans. There were no transparent bids or offers during the CSG Market on Close assessment process. H1 and H2 March were each assessed at $1,074/mt CFR China. The East China domestic prompt marker was assessed at Yuan 8,430/mt ex-tank, down Yuan 140/mt from last Tuesday, and equating to $1,056/mt on an import parity basis. The FOB Korea marker was assessed at $1,024/mt, based on the pegged $50/mt spread to CFR China, and the CFR Taiwan marker at $1,062/mt, based on the pegged $12/mt spread to CFR China.

Take Decisions Based on Data
Take Decisions Based on Data