Asian Oxo Alcohols: SEA PA market up $10/mt on week on tighter feedstock

– LG Chem to shut PA plant end Apr

– Taiwan’s Nan Ya to restart 2-EH unit Mar 8

The phthalic anhydride (PA) market continued to gain traction this week as tighter feedstock such as oxo made producers shift the additional cost to buyers, and this lifted spot trade level. “OX supply is very tight, there is lack of raw materials so we have to increase our price offer to buyers in SEA this week,” a South Korean producer, who sold three parcel of cargoes to SEA this week, said. Other also said that demand is stronger as more buyers were stocking up ahead as more producers were planning for turnaround next month. South Korea’s Aekyung Petrochemical plans to shut its 210,000 mt/year phthalic anhydride plant at Ulsan in April for a month of scheduled maintenance, S&P Global  reported earlier. On the other hand, South Korea’s LG Chem plans to shut its 60,000 mt/year PA plant at Yeosu by end April for scheduled maintenance, a company source said Thursday. “We will shut down our PA plant by late April for 20 days,” the company source said. PA is mainly used in the manufacture of dioctyl phthalate, which is a plasticizer. Meanwhile, Taiwan’s Nan Ya Plastics will restart of its 2-ethyl hexanol unit Thursday, two days earlier than planned earlier, after it was shut down unexpectedly on February 12 due to a technical issue, a company source said Thursday. The 2-EH unit is located at Mailiao and has a production capacity of 205,000 mt/yr. The unit was earlier scheduled to restart on March 10. “We have shut down for 22 days in total, and our total production loss is 12,000 mt,” the company source said. Nan Ya Plastics is the largest 2-EH producer in Taiwan.

RATIONALE:

Dioctyl phthalate was assessed unchanged week on week at $1,055/mt CFR China Thursday, as price discussions were heard at around $1,055/mt CFR China. The CFR Southeast Asia marker was assessed up $10/mt over the same period at $1,270/mt, based on three spot trades, totaling over 400 mt in the range of $1,260-$1,280/mt CFR SEA. PA was assessed unchanged on the week at $890/mt CFR China, based on a trade concluded at $890/mt CFR China. The CFR SEA marker was assessed unchanged week on week at $980/mt CFR SEA, based on trades concluded in the range of $960-$980/mt CFR SEA, 2-EH was assessed unchanged on the week at $1,060/mt CFR China, below selling indications heard at $1,080/mt CFR China. The Southeast Asia marker was assessed unchanged on the week at $1,100/mt on muted trading. Normal butanol was assessed unchanged on the week at $930/mt CFR China based on a trade concluded at that level and the SEA marker was up $10/mt at $920/mt CFR SEA, below a selling indication heard at $930/mt CFR SEA.

 

NWE Oxy Solvents: MEK demand up, price increases expected soon

Acetone/Phenol: Acetone spot prices in Europe fell again this week, dropping Eur20/mt to Eur500/mt FD NWE, in line with an indication by a distributor. In the words of one source: “We are drowning in acetone.” As part of the oversupply situation, good demand was seen in the phenol market, which has prompted producers to keep production rates high. Acetone is produced alongside phenol. However, “producers will start to realize that phenol prices are not covering the losses in acetone. They will start to lower operating rates soon,” one source said. For now, however, some producers were stipulating that buyers of phenol had to commit also to buying acetone, one trader said. Traders were not keen to commit to this, with one adding that, although prices were dropping in Europe, with little downstream demand, it was too highly priced as export material. Phenol fundamentals were said to be balanced from last week, with good demand seen. Premiums to benzene were stable at Eur575/mt FD NWE.

IPA/MEK: Isopropyl alcohol spot prices were slightly higher on the week at Eur1,010/mt FD NWE, up Eur30/mt and just below a seller’s indication at Eur1,015-Eur1,050/mt. The increase was due to an increase in feedstock propylene. The propylene European contract price settled at Eur950/mt for March, up Eur25/mt from February’s level, as increases in feedstock naphtha, as well as tightening cracker margins added upward pressure. The IPA spot increase was also due to expectations of a seasonal boost, a source said. “We are moving towards stronger construction sector and paints and coatings season,” the source added. In the methyl ethyl ketone market, buying inquiries increased this week because of production issues at a plant in Taiwan, sources said. “There has been a huge jump in enquiries for product from overseas, particularly from Asia,” one European producer said. This week, however, this had not translated into higher pricing, and spot prices were stable at Eur1,050/mt FD NWE, at the bottom of a seller’s range of Eur1,050-Eur1,100/mt.

ETAC/BUTAC: Etac spot prices continued to fall this week as supply length increased further. Spot was assessed at Eur1,000/mt FD NWE, within a range heard at Eur980-Eur1,020/mt. Falls in the spot price were less severe than last week’s Eur20/mt drop due to “increasing seasonal demand,” a source said. However, supply was not good enough to meet this demand, sources said. Butac spot prices fell Eur50/mt on the week to Eur1,060/mt FD NWE, at the upper end of a range heard at Eur1,040-Eur1,060/mt. “Demand is as expected,” a source said, though it was not particularly high. There was also a good availability of material. Looking ahead, little change was expected in the market over the coming weeks.

US Oxy Solvents: Lower feedstock values pressure acetone prices

ACETONE: Acetone prices were talked lower this week as market length and lower feedstock values continued to pressure pricing. Sources this week talked pricing in the high-20 to low 30 cents/lb range amid unchanged fundamentals. Sources said that market length remained a concern and participants awaited a decision from The US International Trade Commission on a petition to implement anti-dumping duties on material from Belgium, Saudi Arabia, Singapore, South Africa, South Korea and Spain, sources said. The initial decision was expected in early April. Upstream refinery-grade propylene values were stable on the week, assessed at 20 cents/lb Thursday. The T2 price was assessed at $777/mt DER. Break-even costs were steady at near 16 cents/lb, according to S&P Global  data.

PHENOL: US phenol prices were assessed steady on the week following gains seen last week. Phenol prices rose in March, driven by a stronger benzene contract which rose 9 cents from February to settle at 202 cents/gal. The market remained tight and adders to the benzene contract were last heard at 18-20 cents on top of the benzene contract. Domestic pricing also was heard stable with adders talked at 15-17 cents above the benzene contract. Break-even costs were estimated at $802/mt, according to S&P Global  data. In Asia, phenol prices rose on the week with the CFR China assessment rising $10 on the week to close at $1,190/mt.

IPA: Export and domestic isopropyl alcohol prices were unchanged on the week Thursday at $1,202/mt FOB USG and $1,246/mt delivered. In the absence of fresh indications, the assessments considered stable pricing for upstream refinery-grade propylene. RGP prices were flat on the week Thursday at 20 cents/lb, maintaining levels seen since the end of February. ETAC: The ethyl acetate export and domestic assessments were assessed at $956/mt FOB USG and $1,000/mt delivered, level on the week. The assessment considered stable to slightly lower pricing in upstream markets. Acetic acid pricing was stable on the week Thursday at $588/mt FOB USG while ethylene prices closed Thursday at 15 cents/lb, down just 25 points from the previous Thursday.

BUTAC: Butyl acetate pricing softened $22/mt on the week Thursday, closing at $1,123/mt FOB USG and $1,167/mt delivered. The assessment took direction from weaker upstream pricing, with normal butanol pricing having dropped $100/mt Thursday to $840/mt amid weak feedstock propylene prices and a lack of export volume ability. Conversely, acetic acid pricing was stable on the week Thursday at $588/mt FOB USG.

INDUSTRIAL ETHANOL: Industrial ethanol pricing was unchanged Thursday to close at 269 cents/gal FOB DSP for 190-proof and 294 cents/gal FOB DSP for 200-proof. The assessment considered the Chicago Argo assessment, which softened 3 cents on the week to end Thursday at 130.50 cents/gal. The spread between the 190- and 200-proof grades typically ranges between 15-25 cents/gal, per market feedback.

Asian Phenol/Acetone – Acetone slides with lower feedstock price

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Asian acetone prices were lower this week amid falling feedstock prices as well as ample supply and sluggish demand. Domestic prices in China were also dipping this week. Meanwhile, phenol prices were stable to firm in Northeast Asia but moving lower in South Asia. Feedstock benzene prices were also weakening this week.

PHENOL: The CFR China and domestic China market was stable to firmer this week, market sources said, with tight spot supply being mentioned as a key reason for that. Domestic prices were stable week on week at Yuan 9,050/mt, or about $1,101.60/mt on an import parity basis, with a market source in the domestic market saying that the demand-supply balance was stable this week. A bonded cargo was heard traded at $1,200/mt and a CFR China cargo heard traded at $1,180/mt. The CFR China marker was assessed unchanged week on week at $1,180/mt on Thursday. CFR India prices were moving lower this week though, with a trader saying sentiment was weakening at the moment. An offer was heard at $1,240/mt CFR India and an India-based trade source estimated the tradable level to be close to $1,200/mt CFR India. The marker was assessed lower on week by $30/mt to $1,220/mt CFR India. In upstream benzene, the benchmark FOB Korea price fell $20/mt week on week to $602/mt on Thursday.

ACETONE: The CFR China marker was assessed lower week on week by $25/mt to $425/mt, around the traded levels heard this week. Domestic prices in China were also heard down by Yuan 150/mt to Yuan 3,400/mt, or about $413.90/mt on an import parity basis. Lower propylene prices were heard to be among the reasons why prices were sliding this week. The FOB Korea propylene price fell by $30/mt week on week to $885/mt on Thursday. Acetone prices in India were also falling, with deals heard done around same levels as for CFR China. The CFR India marker was assessed lower by $65/mt on week to $430/mt on Thursday.

toluene price updates
toluene price updates

NWE MTBE/ETBE – MTBE ratio to Eurobob slides to 1.194

– Trading activity picks up

– MTBE falls $5/m on day

The European MTBE price was assessed at $679/mt FOB ARA Thursday, from $684/mt Thursday, on the back of a trade in the  Market on Close assessment process. During the MOC process, TOTSA registered an offer for a 1,000 mt cargo loading March 18-22 and traded with BP towards the end of process at $679/mt. The MTBE factor, the relationship to Eurobob gasoline, was assessed at 1.194 Thursday, down from 1.211 Thursday. Sources had described Thursday’s factor as attractive for sellers, and had been expected to generate more activity. MTBE demand in Europe was heard, according to sources. The related upstream energy markets also rose. Eurobob gasoline barges were assessed at $568.75/mt FOB AR Thursday, up from $564.75/mt Thursday. This followed a 52 cent increase in crude, with the ICE Brent front-month London 16:30 assessment at $67.09/b. In Asia, MTBE was assessed $13/mt higher on the day at $704/mt FOB Singapore Thursday. The Asian MTBE factor rose to 1.148 Thursday.

RATIONALE:

S&P Global  assessed European MTBE at $679/mt FOB ARA Thursday, down $5/mt on the day, in line with a trade. BP traded on TOTSA’s 1,000 mt offer at $679/mt, for front-end loading, during the  Market on Close assessment process. The trade disproved the MTBE factor from Thursday. The assessment was between outstanding bids and offer. The sharpest outstanding bid was at $670/mt by BP and the outstanding offer by Shell was at $688/mt, both loading mid-window. ETBE was assessed at a stable premium over MTBE at $213.25/mt.

US MTBE: MOC offer keeps spot USG below ARA

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– Outstanding offer seen at 191 cents/gal

– Discount to Northwest Europe stable

Spot Gulf Coast MTBE pricing retreated slightly Thursday, coming below an outstanding offer seen in the  Market on Close assessment process. During the MOC process, Lukoil came in with an offer, lowering it to 191 cents/gal FOB USG. No additional bids, offers or trades were confirmed on the day. While one market participant talked the Gulf Coast flat to Northwest Europe, the assessment came below the MOC offer, keeping the discount stable at 1 cent. In related energy, NYMEX April RBOB was up 4.13 cents on the day at $1.8568/gal. Blended and shipped values were last estimated at near 244 cents/gal, while the MTBE factor relative to gasoline was at 1.0403. In other regions, the FOB Singapore marker was up $13 on the day at $704/mt, while FOB ARA was down 1.41 cents to 191.05 cents/gal.

RATIONALE:

Spot USG MTBE was assessed Thursday at 190.05 cents/gal FOB USG, down 1.41 cents on the day. The assessment was below an outstanding offer in the  Market on Close assessment process at 191 cents/gal FOB USG. The discount to the FOB ARA marker was unchanged on the day at 1 cent.

Asian MTBE: Up $13/mt on trade done

Take Decisions Based on Data

– MTBE extends gains

– Bullish sentiment lingers in MTBE market

Asian MTBE extended gains and was up $13/mt to be assessed at $704/mt FOB Singapore on a trade done at the same level during the S&P Global  Market on Close assessment process Thursday. Tricon registered a 3,000-mt April 3-7 loading cargo at $684/mt FOB Singapore, which was brought up to $704/mt FOB Singapore and was taken out by Gunvor at that level. The MTBE factor, which measures the ratio between the daily FOB Singapore MTBE and 92 RON gasoline, was at 1.148, up from 1.125 the day before. “There are not many cargoes for sale on the FOB Singapore today,” a Singapore-based trader said. “The market is really quiet so far,” a producer in Southeast Asia said. Meanwhile, bullish sentiment was seen in gasoline blending. “Our crude view is bullish. Our view is that it will surely touch $70/b and then come back down again…” an East Asian petrochemicals producer said Thursday, indicating that the bullishness in upstream crude would give MTBE and other gasoline blendstock prices a lift in the future. In related news, gasoline blending demand remained firm on the day but gasoline fundamentals weakened slightly, as reflected by the 92 RON-Brent cracks which fell 10 cents/b to $5.70/b, perpetuating, but narrowing, the positive spreads on Thursday. The inter-RON spreads were all flat from Thursday, with the 95/92 RON spread at $1.60/b, the 97/92 spreads at $3.26/b, and the 97/95 RON spread at $1.66/b. The 92 RON, 95 RON and 97 RON prices all fell slightly from Thursday to be assessed at $72.58/b, $74.18/b and $75.84/b, respectively. Naphtha gained 27 cents/b to be assessed at $59.49/b FOB Singapore. On Thursday, the 92 RON-FOB Singapore naphtha spreads, which can also be used to reflect the viability of using MTBE as a blend component, fell to $13.09/b from $13.50/b in the previous assessment day, while the MTBE-naphtha crack was at $201.31/mt, gaining some $10/mt from the previous assessment day.

RATIONALE:

The FOB Singapore marker was assessed $13/mt higher from the previous assessment day at $704/mt FOB Singapore Thursday, at the level of a 3,000-mt trade done for April 3-7 loading during the MOC process. The FOB Singapore marker takes an average of the 15th to 40th day laycans, currently March 28 to April 22. The H2 March, H1 and H2 April laycans were assessed at $704/mt FOB Singapore, maintaining a flat market structure for all 3 laycans. The MTBE factor was up from Thursday at 1.148 Thursday.

NWE Xylenes – MX premiums dip on lower PX, lengthening supply

– PX ECP yet to settle; seen higher

– OX rises as cargo delay exacerbates tight supply

European mixed xylene premiums fell $5/mt Thursday on lengthening supply and falling paraxylene prices. One trader said European mixed xylene had nowhere to go out of Europe because it was too highly priced. There were some reports, however, that European product was moving to the US Gulf to go into the blending pool as the switch to summer grade RBOB started, and higher demand for blend stocks is seen. However, several traders said they did not think the arbitrage was open, with one saying the US “would be better off buying from Asia.” On paper, the arbitrage did look open, with the gross profit margin based on a 5,000 mt cargo calculated at $43.51/mt. However, this falls to below $20/mt when financial and miscellaneous costs are considered, according to traders. In addition, traders were concerned there was only prompt demand in the US market and that it may fall once European cargoes arrived, which could be three weeks. European orthoxylene spot prices rose $10/mt to $1,000/mt FOB ARA. A ship from the US Gulf carrying around 4,000 mt of orthoxylene was reportedly diverted this week, delaying its expected arrival into Rotterdam from March 20-25 to April 10-14. This was exacerbating the tight supply situation in Europe, sources said. European paraxylene fell $9.50/mt to $1,007.50/mt FOB ARA March and April, tracking falls in the Asian market as downstream purified terephthalic acid futures fell. Despite this, and a lack of spot cargoes moving out of Europe, “there is still plenty of demand for PX in China,” a European trader said. This could be seen in the Asian market where the paraxylene spread to feedstock isomer-MX widened to an almost eight-year high of $466.67/mt Tuesday amid high mixed xylene stocks and paraxylene plant turnarounds.

RATIONALE:

S&P Global  assessed the March CIF ARA mixed xylene premium over Eurobob gasoline at $145/mt Thursday, down $5/mt on the day, on falling paraxylene and lengthening supply, according to sources. April was assessed at $138/mt CIF ARA, maintaining its structure to March from Tuesday. March paraxylene was assessed at $1,007.50/mt FOB ARA, down $9.50/mt and tracking movements in the CFR Taiwan/China H1 May laycan. April was assessed at $1,007.50/mt FOB ARA, down $9.50/mt, tracking movements in the CFR Taiwan/China H2 May laycan. Orthoxylene was assessed up $10/mt at $1,000/mt FOB ARA, based on continued tight supply and strong demand.

Asian PX: Falls $9.50/mt Thursday, tracking weaker PTA

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– May delivery cargoes trade twice in MOC

– May Chinese PTA futures fall Yuan 74/mt on day

Asian paraxylene prices fell $9.50/mt day on day at $1,109.17/mt CFR Taiwan/China and $1,090.17/mt FOB Korea Thursday, tracking declines in downstream purified terephthalic acid prices. The most actively traded domestic May PTA futures on the Zhengzhou Commodity Exchange fell Yuan 74 to Yuan 6,514/mt at close of afternoon trade Thursday, while prompt loading material was assessed Yuan 25/mt lower at Yuan 6,575/mt ex-tank. This prompted heavy selling pressure for May-delivery paraxylene cargoes Thursday, with multiple sellers seen emerging mid-afternoon. During the  Market on Close assessment process Thursday, GS Caltex bought two May-delivery cargoes, at $1,108.50/mt CFR Taiwan/China from Mercuria, and $1,108/mt CFR Taiwan/China from Yisheng, respectively. An outstanding April bid from Litasco at $1,112/mt CFR Taiwan/China stood at the close of MOC assessment process without any traders expressing further interest. Meanwhile, feedstock isomer-grade mixed xylene was assessed stable at $652/mt FOB Korea Thursday. The spread between PX and its feedstock isomer-MX widened to an almost eight-year high of $466.67/mt in Asia on Tuesday amid a glut of MX supply and firm PX prices caused mainly by maintenance shutdowns at PX plants, S&P Global  data showed. Tuesday’s spread was the widest since March 30, 2011, when it hit $467.50/mt. “It is basically due to PX plants’ turnarounds,” a Northeast Asian MX trader said Thursday, explaining the weakness and glut in the Asian MX market. A frequently mentioned cause of the oversupply in MX is South Korean S-Oil’s long shutdown and maintenance at its No. 2 plant at Onsan, which can produce 1.1 million mt/year of PX. The shutdown is expected to commence end March and may last for more than five months, according to market sources familiar with the matter. Hence, relatively large volumes of excess MX are likely to flow to the market at a time when demand is also lower due to several turnarounds of PX plants in Asia. Also, Taiwan’s Formosa Chemicals and Fibre Corp. plans to shut its No. 1 aromatics plant in Mailiao from the middle of April to the end of May for annual maintenance, further dampening MX demand in Asia over the second quarter. In statistics news, PX recorded a 6.3% month on month decline in South Korean exports for the month of February as the largest importer China was absent for almost half of February due to the Lunar New Year holidays.

RATIONALE:

Asian PX prices fell $9.50/mt day on day at $1,109.17/mt CFR Taiwan/China and $1,090.17/mt FOB Korea Thursday. The markers take an average of the H2 April and H1 and H2 May laycans. The H2 April laycan was assessed at $1,112.50/mt CFR Taiwan/China, above an outstanding Asian-origin April bid from Litasco at $1,112/mt. The bid was normalized due to a restriction in origin. The May laycans were assessed at $1,107.50/mt, at the level of the last normalized trade for May between Yisheng and GS Caltex, and below an outstanding May offer from Mercuria at $1,108.50/mt. The trade was normalized due to a restriction in origin. The May laycans were also assessed at the pegged $5/mt backwardation to the H2 April laycan. The above rationale applies to the following market data codes: “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.

Asian Iso-MX: Remains directionless in thin trade

– S Korea Feb exports rise sharply

– PX slides $9.50/mt

Asian isomer-grade mixed xylene was stable again day on day at $652/mt FOB Korea and $673/mt CFR Taiwan Thursday in thin trading. Movements in related markets were mostly lower with April ICE Brent crude oil futures down 4 cents to $66.88/b at 0830 GMT in Asian trade, while paraxylene fell $9.50/mt to $1,109.17/mt CFR Taiwan/China. In related news, South Korean exports of isomer-MX surged month on month with a 178.7% spike in February to 60,524 mt, customs data released this week shows. The largest buyer was Taiwan at 30,568 mt, followed by India at 9,837 mt and China at 8,865 mt. Year-on-year, the exports rose by 18%. Other major export destinations in February were Malaysia and Thailand.

RATIONALE:

Isomer-MX was assessed unchanged day on day at $652/mt FOB Korea and $673/mt CFR Taiwan Thursday. 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 earlier in the day and prices in upstream markets were relatively stable. The above rationale applies to the following market data codes: PHAUV00 for FOB Korea and PHAUT00 for CFR Taiwan.