The European toluene

NWE Benzene – Availability remains tight at prompt

Chemical Industry

– Turnaround uncertainty driving buying

– Imports seen capping market

The price of benzene loading 5-30 days forward was assessed $1/mt lower Friday at $765.50/mt, due to backwardation as the month rolled forward. Prices have pushed higher this week as the upstream energy market rallied over the Easter weekend. Higher pricing has been seen in the prompt due to tighter availability. Upstream, cracker turnarounds and maintenance works have begun to affect benzene run rates in Europe. Styrene production rates may have also been affected, as sellers have been seen sitting on supplies ahead of their respective turnarounds. This has been triggered by a declaration of force majeure across a slate of products at Shell’s Moerdijk production facility and its Pernis facility. The prompt premium is capped for the second half of May, a trader said. The timescale still allowed for US imports, he said, and material would also be incoming from India.

RATIONALE:

S&P Global assessed benzene for delivery 5-30 days forward at $765.50/mt CIF ARA Friday, down $1/mt from Friday due to market backwardation as delivery dates rolled forward. May was assessed at $763.50/mt with no disproving indications. June was assessed stable at $714/mt with no disproving indications. July was assessed at $709/mt, stable amid no disproving indications. August was assessed flat to July. September was assessed flat to August. FOB was assessed at $765.50/mt, flat to CIF.

US MTBE Chemical Industry: Spot climbs with NYMEX RBOB

Chemical Industry

Chemical Industry news of US MTBE

– Offer in MOC process hovers at 215 cents/gal

– Spot moves to parity with NYMEX RBOB futures

The US Gulf Coast MTBE Chemical Industry rebounded Friday as an offer in the market on Close assessment process rose from the offer level seen Friday Chemical Industry sources said NYMEX RBOB gasoline futures represented the floor for MTBE prices, which moved the S&P Global assessment to parity with RBOB futures. Liquidity and trading interest remained thin. Global supply is expected to continue to lengthen in the coming months as plants in Asia come back online. LyondellBasell is also building an MTBE Chemical Industry  plant in the Houston, Texas, area that is slated to come online in 2021, adding further supply.

RATIONALE:

S&P Global assessed spot Gulf Coast MTBE at 213.35 cents/gal Friday at parity with the assessment of NYMEX RBOB gasoline futures. The assessment was below an offer in the Chemical Industry on Close assessment process at 215 cents/gal FOB USG while considering market talk that gasoline futures represented the floor for value.

Chemical Industry
Chemical Industry

Paraxylene Chemical Industry

Chemical Industry

GS Caltex cuts run rate at No.3 PX plant: sources

Backwardation between May and June widens $2/mt

The Chemical Industry Asian paraxylene prices rose $3.67/mt day on day to be assessed at $1,068/mt CFR Taiwan/China with the backwardation between May and June widening to $15/mt from $13/mt on Friday. The wider spread between May and June pointed to a tight availability of May cargoes, as was seen on the S&P Global Platts Chemical Industry on Close assessment process Friday where only bids for May cargoes seen and no offers. A deal was done on the Platts MOC between Macquarie and Mitsubishi for a May cargo at $1,079/mt CFR Taiwan/China for Asian-origin material. All the other bids for May cargoes were left unfulfilled. Meanwhile, traders in Asia said Friday that GS Caltex had lowered run rate at its No. 3 PX plant with 550,000 mt/year production capacity (Chemical Industry). The lower rates could continue for a week, they added. One trader said that the run rate was down to around 60%, but this could not be confirmed. The run rate was lowered because of an issue with a catalyst, added another Asian source. However, this could not be confirmed either from GS Caltex. Traders said that the impact of the cut in operations would be limited since only around 5,000 mt of PX and 3,000 mt of benzene production would be impacted and there would be no effect on Asian PX prices. The CFR Southeast Asia PX marker was assessed up $30/mt week on week at $1,059/mt CFR Southeast Asia. The marker was assessed at a discount of $9/mt to the CFR Taiwan/China marker.

Rationale                       

Asian PX Chemical Industry prices were assessed up $3.67/mt day on day at $1,068/ mt CFR Taiwan/China and $1,049/mt FOB Korea Friday. The markers take an average of the second-half May and first-half and second-half June laycans. The June laycan was assessed at the pegged level of $1,063/mt, between an outstanding bid for an Asia-origin June cargo from Hengli at $1,063/mt which was normalized for origin restriction and an offer from BP at $1064/mt (Chemical Industry). The May laycans were assessed at $1,078/mt CFR Taiwan/China, at the level of the last May trade between Mitsubishi and Macquarie, and above an outstanding bid for Asian-origin May cargo by Hengli at $1,074/mt, which was normalized for a restriction in origin. The June laycans were assessed at a $15/ mt backwardation to the H2 May laycan, up $2/mt on day. The above rationale applies to the following Chemical Industry data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

 

Chemical Industry
Chemical Industry

NWE Benzene – Benzene Chemical Industry pushes higher

Chemical Industry

– 5-30 day price up $10/mt

– Downstream styrene picks up

The European benzene Chemical Industry ticked up on Wednesday, as bidding for April cargoes continued to rise, despite the upstream energy rally coming to a halt. The 5-30 day forward benzene assessment rose $9.50/mt to $716/mt CIF ARA Wednesday. Conversely, the 16:30 London time assessment of ICE Brent crude was down 18 cents at $70.67/b. Downstream, 5,000 mt of styrene trades were concluded over April and May. Trading was due to the upcoming turnaround at the Shell POSM plant in Moerdijk, as well as others set over the next couple of months. The balance between turnarounds for steam crackers versus downstream styrene producers has been a subject of concern for players in the benzene Chemical Industry, with the most significant Chemical Industry developments during Q2 expected to come from deviations in the projected schedule. The benzene-styrene spread was $385/mt on Wednesday, up $16/mt from Wednesday. The spread has trended in decline from March into April, since a high point of $450/mt for the year in mid-March.

RATIONALE:

S&P Global Wednesday assessed benzene  Chemical Industry for delivery 5-30 days forward at $716/mt CIF ARA Wednesday, up $9.50/mt from Wednesday. April was assessed up $10/mt at $721/mt, within a bid-offer range of $720-$740/mt. May was assessed up $10/mt at $706/mt, within a bid-offer range of $695-$720/mt and keeping a backwardation of $15/mt to April. June was assessed at $695/mt, up $10/mt, in line with May. July was assessed at $694/mt, up $10/mt, in line with June. August was assessed flat to July. FOB was assessed at $716/mt, flat to CIF (Chemical Industry).

 

Chemical Industry
Chemical Industry

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.

Oxo-alcohol prices were assessed stable to higher on the week due to unchanged fundamentals.

Imported date

Oxo-alcohol prices were assessed stable to higher on the week due to unchanged fundamentals. Spot trading was subdued as market participants awaited the settlement of the April propylene contract price which was expected to rise by   around Eur15/mt, oxo-alcohol market sources said. Market participants were uncertain about oxo-alcohol producers’ ability to pass an increase in the propylene contract price on fully to consumers because of persistently weak demand and a wide price spread in the European market. “With this spread it’s  also a little more difficult to say whether we [can] increase spot prices in accordance with the C3 contract price increase or whether the outcome will be    that the increase will be a little bit lower compared to the C3 increase,” a European producer said. On the 2-ethylhexanol market, the producer said that regular exports to Turkey were taking place. However, it was “difficult to say whether that really has an impact on the European market,” the producer added. 2-ethylhexanol was assessed stable on the week at Eur1,050/mt FD NWE, within a   range of Eur1,030-Eur1,090/mt heard in the market. Sources said that the butanol market in Europe remained long, although a second source said that he was able to “see a seasonal uptick in demand.” “The fact that we can sell butanol and 2-eh to Italy and Spain and France…means that there is a seasonal uptick in demand,” the source said. N-Butanol was assessed stable on the week at Eur960/mt FD NWE, within a range of Eur940-Eur990/mt heard corroborated by sources. Iso-butanol was assessed up Eur20 on the week at Eur840/mt FD NWE, at the lower end of a range of Eur840-Eur870/mt heard corroborated by several sources in the market and based on an indication of a slight uptick in demand. In the phthalic anhydride market, fundamentals were stable, with one source saying demand from the construction sector was weak despite expectations of an uptick in March and April. PA flake was assessed stable on the week at Eur940/mt FD NWE, within a range of Eur940-Eur950/mt heard in the market.

Prices were under pressure across Asia this week with domestic prices and supply trending lower in China and India.

PHENOL: Prices were under pressure across Asia this week with domestic prices and supply trending lower in China and India. CFR China fell $50/mt to be assessed at $1,140/mt as offers were heard coming in at $1,150/mt CFR China. Also the domestic price tumbled around Yuan 350/mt week on week to Yuan 8,600/mt, or about $1,075.12/mt on an import parity basis, based on a VAT of 13%, valid after April 1. Feedstock benzene also fell week on week by $25.67/mt to $597/mt FOB Korea on Tuesday. Similarly, the CFR India marker was assessed down week on week by $80/mt to $1,140/mt as market sources said tradable levels would be around $1,100-$1,150/mt CFR India at the moment. The main reason prices were falling in India was increased domestic supply, traders and producers said. “Local manufacturers are very aggressive,” a trader said.

ACETONE: The market was seen relatively stable with no significant changes heard for international prices this week. An Indian trader said prices there were stable. However, in China, domestic prices weakened about Yuan 150/mt week on week to Yuan 3,250/mt, or about $406.30/mt on an import parity basis, based on a VAT of 13%. CFR China and CFR India were both assessed stable on week at $425/mt and $430/mt, respectively.

 

European MTBE fell $16.50/mt on the day to $722/mt FOB ARA on Wednesday.

– MTBE factor to EBOB narrows

– ETBE premium firms despite spot offer

European MTBE fell $16.50/mt on the day to $722/mt FOB ARA on Wednesday, on the back of an offer from Shell which was lowered and left outstanding at the end of the Platts Market on Close assessment process. Conflicting views on buying interest heard Wednesday. “There was good demand, but at current levels it is slowing down,” one source said. However, a blender said that there was a feel of more demand recently due to enhanced export opportunities from the Amsterdam-Rotterdam-Antwerp hub. Meanwhile crude oil increased slightly on the day, with the ICE Brent front-month London 16:30 assessment up 15 cents at $67.95/b Wednesday, while the EBOB barges April swap was assessed down $9.50/mt from Tuesday at $634.50/mt. MTBE’s premium over EBOB front month swaps was calculated at $87.50/mt, down $7/mt. In Asia, the MTBE marker was up $5/mt at $724/mt FOB Singapore, tracking 92 RON gasoline amid thin liquidity. The Asian MTBE factor was down from 1.133 the day before at 1.132. The European ETBE price was assessed at $862/mt FOB AR on Wednesday, down from $878.50/mt on Tuesday, at a stable premium to MTBE, despite Neste’s $894/mt offer in Platts Market on Close assessment window.

RATIONALE:

S&P Global Platts assessed European MTBE at $722/mt FOB ARA Wednesday, down $16.50/mt from Tuesday, below the sharpest outstanding offer at the end of the Platts Market on Close assessment window. The outstanding offer, at $723/mt loading mid window by Shell, disproved Tuesday’s MTBE factor. ETBE was assessed at an $140/mt premium to MTBE Wednesday, stable to Tuesday. Neste offered a $894/mt loading front end cargo in the Platts Market on Close assessment process Wednesday but the offer did not disprove Tuesday’s ETBE premium.

 

The European toluene market was quiet

– Premiums stable for March and April

– Talk of lower premiums to come

The European toluene market was quiet on Tuesday, with no new activity. The toluene premium for March over Eurobob gasoline was assessed stable at $165/mt, while April was assessed steady at $160/mt. Outright pricing for toluene is flat through the forward months, while the Eurobob gasoline market is in contango. The toluene market has become delinked from the gasoline market, as blend value is typically pegged under $100/mt. Spot demand from the petrochemical market has been low, with buyers indicating premium discussions trending down towards $140/mt last week. US toluene prices have increased slightly over European material. Exporters are hoping the arbitrage window could open now that more material is available within Northwest Europe, but sources said a wider price spread is still required to make spot exports workable.

RATIONALE:

S&P Global  assessed the CIF ARA toluene premium over Eurobob gasoline at $165/mt for March on Tuesday, stable from Tuesday. No disproving indications were heard in the market. The April premium was assessed stable at $160/mt.