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NWE Xylenes Chemical Industry – MX market quiet due to May 1 holidays

Chemical Industry

Chemical Industry news of NEW Xylenes

– PX May ECP expected lower

– MX market oversupplied

European xylenes Chemical Industry trading was thin on Thursday due to May 1 public holidays in many European countries. Traders found little pricing direction from Asia either, with a national holiday in Singapore, as well. In the mixed xylene market, oversupply continued, with few outlets for mounting supply. Demand remained weak due to a lack of export opportunities and bearish downstream paraxylene. Bearishness in the downstream paraxylene Chemical Industry was influencing May contract price expectations on Thursday. Some participants in the polyethylene terephthalate market, a downstream product of paraxylene, were expecting “overdue” decreases in May of up to Eur70/mt. However, robust crude oil and naphtha prices, which have helped squeeze paraxylene production margins considerably in the last couple of weeks, are sure to make negotiations difficult. In the Asian Chemical Industry, no major May settlement has been reached, with buyers and sellers far apart in their pricing ideas. The gap between the highest bid and lowest offer was $120/mt, with the bid at $930/mt CFR Asia and the offer at $1,050/mt CFR Asia. However, even the offers were below the last major paraxylene ACP settlement, at $1,080/mt CFR Asia in March. Orthoxylene spot pricing was stable at $1,150/mt FOB ARA, with little trading so far this week.

RATIONALE:

S&P Global assessed M1 May and M2 June mixed xylene CIF ARA premiums to Eurobob gasoline were stable on a day to $100/mt on no disproving indications. May Northwest European paraxylene (Chemical Industry) was stable at $820/mt FOB ARA on no disproving indications. June was stable at $820/mt FOB ARA, maintaining parity with May. The paraxylene 5-30 day forward spot price was assessed as the average of the period at $820/mt FOB ARA, stable on the day. Orthoxylene was assessed at $1,150/mt (Chemical Industry) FOB ARA on no disproving indications.

 

Chemical Industry
Chemical Industry

Asian Phenol/Acetone Chemical Industry – Domestic price stable, international higher

Chemical Industry

Chemical Industry news of Asian Phenol/Acetone

PHENOL: Although domestic prices remained largely stable in China this week for both phenol and acetone, international prices in some Chemical Industry were inching up. The CFR China price for phenol was assessed up the $30/mt week on week at $1,030/mt on Thursday as the negotiation range for imports was heard at $1,020-1,100/mt this week. However, the domestic price was up marginally on a week by Yuan 100/mt at Yuan 7,800/mt, or about $972/mt on an import parity basis, up roughly $10/mt. Other Chemical Industry such as India and Southeast Asia were stable and did not see any price changes. Demand in India was weaker due to the ongoing elections, sources said. In other related Chemical Industry, benzene fell this week with the FOB Korea marker assessed at $618/mt Thursday, down $35/mt from last Thursday.

ACETONE: Asian acetone Chemical Industry was relatively stable this week but the CFR China price was assessed up to $30/mt at $380/mt Thursday, similar to the increase in phenol. Acetone import negotiations were heard at $370-$400/mt on CFR China basis. The domestic price was rising on a week by Yuan 50/mt to Yuan 2,975/mt, or about $371/mt on an import parity basis, up roughly $6/mt in terms of import parity basis. The CFR India Chemical Industry was heard negotiated at $360-$390/mt, relatively stable week on week. Meanwhile, the feedstock FOB Korea propylene price was assessed at $850/mt Thursday, down $15/mt on the week.

 

NWE AA/VAM Chemical Industry – VAM price falls on week

Chemical Industry

Chemical Industry news of NWE AA/VAM

– AA price stability persists

– VAM Chemical Industry set to tighten

AA: European acetic acid Chemical Industry fundamentals were stable again in the week to Friday sources said. AA was assessed at Eur700/mt FD NWE, unchanged week on week. A source said the material was being imported into Europe. In Asia, ample supply weighed, with some Chinese sellers reported to be offering cargoes to Southeast Asia and India, Chemical Industry sources said. Trading activity remained subdued, with buyers not keen to procure cargoes amid sufficient stocks. In the US, AA pricing softened on the week, with export and domestic product assessed at $555/mt. In producer news, Celanese announced it planned to increase methanol Chemical Industry production at its Clear Lake unit in Texas to 1.7 million mt/year, the company said. While no specific dates were given on the timeline of the project, it said the expansion is due to be carried out “as soon as operationally feasible and pending customary regulatory and permitting approvals.”

VAM Chemical Industry: The European vinyl acetate monomer market was assessed down Eur10/mt at Eur890/mt Friday with the Chemical Industry described as quiet. “Demand is not as fast as we hoped. I spoke to end users using VAM and they are far behind on orders,” a distributor said of the slow start following Easter. Despite the slow week, sources predicted tightness as the month draws to a close. “If demand picks up there will be some degree of tightness,” the distributor said. Supply was said to be tightening in other regions as a result of maintenance works. VAM supply was tighter amid turnarounds at Sinopec, Celanese, and Chang Chun plants, with Chemical Industry participants expecting prices to rise further in the coming weeks. “Supply is getting tighter because of scheduled maintenance in the US and the Far East. [However] there is no issue finding VAM in Europe,” the distributor said.

RATIONALE:

S&P Global assessed acetic acid spot truck prices at Eur700/mt FD NWE Friday stable on the week. Product was heard pegged at around this level by Chemical Industry participants. Acetic acid FOB NWE was assessed at $700/mt, also stable and in line with FD price. Vinyl acetate monomer spot trucks were assessed down Eur10/mt on the week at Eur890/mt FD NWE, at the top end of a source indication at Eur860-890/mt. FOB NWE VAM Chemical Industry was assessed down $11/mt at $964/mt, in line with FD price movement.

Chemical Industry
Chemical Industry

Toluene Chemical Industry was assessed higher by $4/mt, day on day

Chemical Industry

– China blending demand for MTBE higher

– China toluene downstream operation rates low

Toluene Chemical Industry was assessed higher by $4/mt, the day on day, at $714/mt FOB Korea, while the CFR China marker remained unchanged on Tuesday at $723/mt. Crude oil climbed firmly on Tuesday, with ICE Brent futures for June up by $2.15/b at $73.91/b, at the Singapore close at 4:30 pm local time. This drove strength in toluene on a FOB Korea basis, although there were no firm offers heard in the Chemical Industry on Tuesday. Low June bids for FOB Korea were heard in the $700-702/mt FOB Korea region. An Asian trader said that in Southeast Asia, blending demand was still robust with cargo sold for both May and June and blending margins were looking healthy. “Toluene being cheaper bits of help,” said the trader. A May selling idea for toluene was heard at $745/mt CFR Vietnam. Demand from within China was still not very healthy, said sources, although there were some mixed opinions, with some traders saying that there was gasoline blending demand coming from China, others strongly refuted this. Domestically, within China, toluene would not go into the blending pool right now, one trader said, since domestic China MTBE margins work out better than toluene Chemical Industry. Refineries within China would use MTBE due to better margins and turn towards toluene as a blendstock only once the MTBE blending limit is reached. Chinese domestic demand for gasoline is not as strong as gasoline demand in Southeast Asia right now, the trader added (Chemical Industry). Demand from Chinese downstream solvent manufacturers is currently quite low, said another source, due to low operation rates. Operation rates have been cut by downstream producers primarily because the Chinese government is conducting safety checks at various facilities, he added, and this is affecting overall demand from that sector. Although there was no outside confirmation, the source said that he expected demand from the Chinese downstream producers to remain low until September (Chemical Industry).

RATIONALE:

Toluene was assessed higher by $4/mt, the day on day, at $714/mt FOB Korea and unchanged at $723/mt CFR China on Tuesday. 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 Chemical Industry on Close assessment process. The CFR China marker was assessed above the highest June bid on Tuesday, heard at $722/mt CFR China. The East China domestic prompt price was lower day on day by Yuan 10/mt at Yuan 5,360/mt on Tuesday, with bid-offer heard between Yuan 5,350 and 5,380/mt. The FOB Korea Chemical Industry was assessed higher due to stronger crude oil prices and no disproving information.

Chemical Industry
Chemical Industry

Asian Benzene Chemical Industry – Sellers seek outlet ex-Asia

Imported Data

– FOB Korea-CFR China spread negative

– FOB Korea down $4/mt, CFR China down $5/mt

Asian benzene Chemical Industry prices kicked the week off lower by $4/mt from last Tuesday at $638.33/mt FOB Korea Tuesday, as demand continued to come from ex-Asia demand centers such as the US and the EU. The bulk of South Korean material continued to seek outlet in the US, despite a closed arbitrage on paper, and a long voyage which results in Chemical Industry  price risk. June FOB USG paper was assessed at 227 cents/gal Tuesday, or $678.73/mt, bringing the FOB Korea-FOB USG paper spread to $36.40/mt Tuesday, insufficient to cover freight costs between the two regions. Regardless of the arbitrage being closed on paper, traders continued to turn to the US for demand amid a negative FOB Korea-CFR China price spread. CFR China was assessed at $621/mt Tuesday, $17.33/mt lower than FOB Korea. Meanwhile, Southeast Asian material was heard mostly shipped to the EU. A May-loading FOB Southeast Asia 3,000 mt sell tender, which had closed late last week, was heard concluded at a discount of $30/mt to the FOB Korea benchmark. Freight rates between Southeast Asia and ARA were heard in the low $70s/mt range. In CFR China, bearishness in the East China Chemical Industry provided little support to the price of imported material. Prompt domestic East China benzene was assessed down Yuan 90/mt on the day to Yuan 4,340/mt, or $561.06/mt on an import parity basis. May domestic material was assessed at Yuan 4,485/mt, or $579.81/mt. With the May CFR China-East China benzene spread at minus $41.19/mt, demand for CFR China was thin. A domestic trader was heard keen to sell H2 April-arrival benzene, as opposed to storing the imported material in commercial tanks. Earlier this year, traders were able to import CFR China material for subsequent sale in the East China Chemical Industry in Yuan-denominated parcels. However, amid the negative price spread, the import-domestic arbitrage stands closed on paper Tuesday.

RATIONALE:

FOB Korea benzene was assessed down $4/mt from Tuesday at $638.33/mt Tuesday. The marker takes the average of the third, fourth and fifth half-month laycans, H1 May, H2 May and H1 June. During the  Chemical Industry on Close assessment process Tuesday, there were no transparent bids and offers seen. The H1 May laycan was assessed at $638/mt FOB Korea, keeping the H1 May/H2 May spread unchanged from the pegged level of plus $1/mt. The H2 May laycan was assessed at $637/mt FOB Korea, below an offer seen at $638/mt. The H1 June laycan was assessed at $640/mt FOB Korea, keeping the H2 May/H1 June spread unchanged from the pegged level of minus $3/mt. The CFR China marker was assessed at the pegged level of $621/mt, tracking falls in the domestic East China Chemical Industry. The East China marker was assessed down Yuan 40/mt from Tuesday at Yuan 4,423/mt, or $571.84/mt on an import parity basis (Chemical Industry).

 

Chemical Industry
Chemical Industry

NWE Xylenes – MX trading stalemate broken; supply still long

Chemical Industry

– 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.

NWE Styrene (Imported data) – Buying interest emerges

Imported Data

– April, May trade at $1,100/mt

– Stricter safety inspections in China

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).

RATIONALE:

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).

 

Imported date
Imported date

Styrene (Imported Date)

Chemical Industry

Muted trading, public holiday in China, Taiwan „„

Ethylene stable while benzene rises $17/mt

Asian styrene monomer rebounded $72.50/mt on the week to $1,090/ mt CFR China and $1,050/mt FOB Korea Friday, following the steep losses seen in the prior week (imported date). Day on day, however, prices were stable amid muted trading due to the public holiday in China and Taiwan. A source said that discussions will restart when the market returns next week. The east China domestic May marker was stable on the day at Yuan 8,270/mt ex-tank, with its import-parity equivalent at approximately $1,070.03/mt (imported date). Western crude inched slightly higher on the day, with the ICE May Brent futures up 14 cents/b on the day, or 95 cents/b on the week, at $69.06/b at 4:30 pm Singapore time (0830 GMT). Feedstock ethylene was also unchanged on the day at $1,020/ mt CFR Northeast Asia. Benzene rose $17/mt to $603/mt FOB Korea Friday. Styrene production margin remains healthy, hovering at around $135-$165/mt this week (imported date). Styrene inventory in East China fell 22,300 mt on the week to 232,700 mt Friday, according to market sources. European styrene for loading 5-30 days forward fell $0.50/mt on the day to $1,072.50/mt Friday amid slow spot trading.

Rationale

Asian SM was assessed flat on the day at $1,090/mt CFR China and $1,050/mt FOB Korea Friday. The markers currently take the average of the H1 May and H2 May laycans. There were no transparent bids or offers during the  Market on Close assessment process on Friday. H1 and H2 May were assessed at the pegged level of $1,090/ mt (imported date). In the East China domestic market, the May marker was assessed stable on the day at Yuan 8,270/mt ex-tank, equating to $1,070.03/ mt on an import-parity basis. The FOB Korea marker was assessed at $1,050/mt, based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,078/mt, based on the pegged $12/mt spread to CFR China (imported date).

The European daily methanol price was assessed up Eur3/mt to Eur270/mt.

Chemical Industry

– Stable domestic market

– Venezuela disruption may prompt more buying

The European daily methanol price was assessed up Eur3/mt to Eur270/mt FOB Rotterdam for the 5-30 day laycan Wednesday. On the week, the price was down Eur7.50/mt, however, after spot market activity softened in the days following the industry-settled second quarter methanol contract price being agreed at a rollover of Eur350/mt. The market saw a slight uptick in activity on Wednesday following a slow start to the week. A deal was heard at Eur270/mt early Wednesday. Overall, the market in Europe was heard to be relatively stable and as a result, attention was turned to other parts of the world and their potential impact on the European market. One trader said that while little change could be expected in the European market in April, the situation in Venezuela — already encouraging buying activity in Europe — remains unclear and may have a further impact.

RATIONALE:

S&P Global  assessed the FOB Rotterdam 5-30 day spot price up Eur3/mt on the day to Eur270/mt Wednesday. Mid-April was assessed at Eur270/mt, in line with a deal and within a bid-offer range heard at Eur268-272/mt. Mid-May was assessed at Eur271/mt, Eur1/mt below the offer and in a bid-offer range heard at Eur268-272/mt. A structure in contango with a daily increase of Eur0.037/mt was drawn between the two dates and extended to remaining laycan dates.

 

growth-3
growth-3

Asian Toluene: Climbs $3-$6.50/mt on bid during MOC

Mathanol Prices

– Domestic Chinese prices heard higher on the day

– Market expects bullish toluene

 

Asian toluene rose $3-$6.50/mt Tuesday to be assessed at $701/mt CFR China and $675/mt FOB Korea, respectively, on the back of a best bid heard at $674/mt FOB Korea during the  Market on Close assessment process Tuesday. During the MOC process, a 2,000-mt any May bid was heard at $660/mt FOB Korea, which was subsequently raised to $674/mt FOB Korea but no interest was heard generated. “So today is the 13% VAT [kicking in] for all manufacturing industry, but not many people are indicating their buying interest yet as this is just the first day of the week and the month as well. So most participants are still observing for now,” a Chinese trader said Tuesday. In China, East China domestic prompt ex-tank cargoes was heard discussed at Yuan 5,300-5,320/mt on Tuesday with prices hovering around the same level towards the end of the day. The domestic East China marker was assessed at Yuan 5,310/mt, converting to an import parity of about $671/mt and was up some Yuan 90/mt from Tuesday. Meanwhile, inventory levels in Jiangsu, East China was heard at 71,200 mt on Tuesday as the week saw inventory growth of about 12,800 mt compared with an outflow of 13,500 mt, sources said, causing an overall inventory drawdown. “The market will be bullish due to crude. Chinese inventory down and demand will be in the market as of this week. Furthermore, the purchasing manger’s index in China seems to be good,” a South Korean source said Tuesday. On that note, the Caixin China Manufacturing PMI rose to 50.8 in March from 49.9 in February, rebounding from the three-year low observed in January at 48.3, according to a report by S&P Global Market Intelligence. A reading below 50 indicates contraction. Despite this, some in the market are still maintaining cautiousness. “[Spot] market is very quiet today morning, but lower tax rates in China could spur demand further,” a South Korean market source said Tuesday. In other markets, an H1 May 3,000 mt cargo was heard traded at $725/mt CFR Vietnam on Tuesday.

RATIONALE:

The FOB Korea marker was assessed at $675/mt FOB Korea Tuesday, up $6.50/mt from the previous assessment day, and was assessed above a best bid heard at $674/mt FOB Korea during the MOC assessment process Tuesday. The CFR China marker was assessed at $701/mt Tuesday, up $3/mt from Tuesday, tracking the FOB Korea up. The FOB Korea and CFR China markers take the average of the third and fourth half-month laycans, currently H1 and H2 May. H1 May was assessed at $701/mt and H2 May at $701/mt CFR China on Tuesday, changing the market to a flat structure from the backwardation on Tuesday, to track the domestic East China market structure.