Asian Styrene: Falls $8/mt amid uncertain outlook

Chemical Industry

– Weaker feedstocks weigh on prices

– Sentiment-driven amid lack of clarity

Asian styrene monomer fell $8/mt day on day to $1,053/mt CFR China and $1,013/mt FOB Korea Wednesday on weakening sentiment and an uncertain price outlook. In the CFR China market, bids were heard at $1,050/mt for June arrival cargoes but did not attract any selling interest. Earlier, bids were heard at $1,030/mt CFR China for on or before May 20 arrival, with no offers heard. The laycans rolled forward from the average of H1 and H2 May to H2 May and H1 June in a flat market structure. In the east China domestic market, the May marker fell Yuan 70/mt on the day to Yuan 8,070/mt ex-tank. The fall in SM also tracked the weakness in western crude benchmarks and feedstock benzene and ethylene. An Asian SM trader said the market was lacking clarity and continued to be sentiment-driven. SM prices were expected to remain rangebound for the time being, sources said. “Despite the weak SM prices, production margins are healthy given low benzene prices. However, since Asian supply would be tighter at least until early May due to plant turnarounds, prices could be hovering within this range for a while,” one market participant said. A Chinese producer said high inventory in east China was expected to decline between April and May, but an inventory level of more than 200,000 mt could be a “new normal” this year.

RATIONALE:

Asian SM was assessed down $8/mt day on day at $1,053/mt CFR China and $1,013/mt FOB Korea Wednesday. The markers currently take the average of the H2 May and H1 June laycans. There were no transparent bids or offers during the  Market on Close assessment process. H1 June was assessed at $1,053/mt, above the best bid heard at $1,050/mt CFR Zhangjiagang/Jiangyin with no offer heard, and tracking weaker sentiment in the east China domestic market in the afternoon. Maintaining the pegged flat May/June spread, H2 May was also assessed at $1,053/mt. In the east China domestic market, the May marker was assessed down Yuan 70/mt on the day at Yuan 8,070/mt ex-tank, equating to $1,043.50/mt on an import parity basis. The FOB Korea marker was assessed at $1,013/mt based on the pegged $40/mt spread to CFR China, while the CFR Taiwan marker was assessed at $1,041/mt based on the pegged $12/mt spread to CFR China.

Chemical Industry
Chemical Industry

Asian Toluene: Toluene blending into gasoline drives demand

Chemical Industry

– SEA, India show demand

– China market lackluster

Asian toluene was assessed higher day on day by $7/mt at $710/mt FOB Korea on Wednesday. Toulene prices were responding to a higher 92 RON gasoline crack spread to ICE Brent futures which hit an eight-month high of $9.31/bbl at the 0830 GMT close of Asian trade on Wednesday. The spread was assessed at $7.64/bbl on Wednesday down by $0.86/bbl day on day. With tighter gasoline supply from Asia due to refinery turnarounds, especially in China, as well as lower inventories across major oil hubs that include Singapore, demand for aromatics additives into gasoline was robust. Toluene was in demand as a blendstock due to its 112-115 RON value in both Southeast Asia and India, market sources said. A trader said that he had recently sold around 10,000-15,000 mt of April cargo and demand continued to be high. Indian demand was also considered to be quite high, although no specific deals were heard for the Indian market. This demand was primarily driving strength in toluene prices, a source said. The Chinese market remained quite lackluster with solvent makers demand for toluene down, primarily due to shutdowns among solvent producers in the wake of safety concerns following an explosion in China last month. The East China domestic prompt price was unchanged day on day at Yuan 5,360/mt on Wednesday, with tradable indications heard between Yuan 5,350-5,370/mt. The US prices for toluene were also higher compared to Asian prices, a source said. It offered an opportunity for arbitrage from Asia to the US, but vessel space was very tight for both April and May, since a lot of that vessel space was dedicated to benzene cargoes, the source added.

RATIONALE:

Toluene was assessed higher by $7/mt day on day at $710/mt FOB Korea and by $5/mt day on day at $726/mt CFR China on Wednesday. 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  Market on Close assessment process. The FOB Korea marker was assessed higher by $7/mt at $710/mt, above the highest bid heard for June loading cargo at $709/mt FOB Korea. There was no structure assessed between the May and June windows. The East China domestic prompt price was unchanged day on day at Yuan 5,360/mt on Wednesday, with tradable indications heard between Yuan 5,350-5,370/mt. No bids or offers were heard on a CFR China basis and the marker was assessed higher by $5/mt at $726/mt.

 

Chemical Industry
Chemical Industry

Asian Benzene – FOB Korea down $9.66/mt

Imported Data

– FOB Korea sell interest picks up

– May CFR China demand heard filled

Asian benzene prices have been on a downtrend this week, as demand for Asian material continued to come from ex-Asia demand centers such as the US and EU. June FOB USG paper was assessed at 225 cents/gal Wednesday, or $672.75/mt, bringing the FOB Korea-FOB USG paper spread to $34.42/mt Wednesday, insufficient to cover freight costs between the two regions. Regardless of the arbitrage being closed on paper, traders had earlier been heard keen to seek demand from the US amid a negative FOB Korea-CFR China price spread. However, selling interest for H2 May, and June-loading material was more aggressive than buy interest Wednesday, as offers fell lower over the day but did not attract buy interest. CFR China activity was absent Wednesday, with the FOB Korea-CFR China spread standing at minus $14/mt, deterring sellers from offering material on a fixed price basis. Simultaneously, the CFR China-East China benzene spread was at minus $35.88/mt, preventing Chinese buyers from seeking import material. Amid the absence of both buyers and sellers, CFR China trade activity has been thin. In the Taiwan market, demand for May material was heard fulfilled, with buyers not keen to discuss May-arrival material despite falling fixed and floating pricing.

RATIONALE:

FOB Korea benzene was assessed down $9.66/mt on the day at $628.67/mt Wednesday. The marker rolled forward Wednesday to take the average of the third, fourth and fifth half-month laycans, H2 May, H1 June, and H2 June. During the  Market on Close assessment process Wednesday, there were no transparent bids or offers seen. The H2 May laycan was assessed at the pegged level of $624/mt FOB Korea, keeping the H2 May/June spread unchanged from the pegged level of minus $7/mt, below an offer last seen at minus $6/mt. The H1 and H2 June laycans were assessed at the pegged level of $631/mt FOB Korea, below an offer last seen at $635/mt. The CFR China marker was assessed at the pegged level of $615/mt, tracking falls in the FOB Korea market. The East China marker was assessed down Yuan 20/mt on the day at Yuan 4,403/mt, or $569.38/mt on an import parity basis.

Chemical Industry
Chemical Industry

NWE Xylenes – Lack of trading persists

Chemical Industry

– OX tender yet to finalize

– ECPs still under negotiation

Thin trading persisted in the xylenes markets on Tuesday, with mixed, para- and ortho-xylenes all unchanged from Tuesday. In the mixed xylene and paraxylene markets, supply in Europe was still long and there was little demand from the petrochemicals sector. Most consumers were happy with just their contractual volumes. The lack of spot demand was being led by depressed downstream prices and a lack of export opportunities, itself due to high global supply. This was causing some concern in the mixed xylenes market, in particular. As supply has been building up in the Amsterdam-Rotterdam-Antwerp hub, sellers have been heard looking to gasoline blenders as a source of demand, despite premiums to Eurobob gasoline being heard markedly lower than in the petrochemical sector in general. In contract news, the European contract price for paraxylene and orthoxylene has yet to fully settle. The results of Lotte Chemical’s 3,000 mt orthoxylene tender at the end of last week have yet to be heard by the wider market.

RATIONALE:

S&P Global assessed the M1 April and M2 May mixed xylene CIF ARA premiums to Eurobob gasoline stable on day at $113/mt and $105/mt, respectively, on Tuesday, amid no disproving indications. April Northwest European paraxylene was stable at $910/mt FOB ARA, with no indications in thin market trading. 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 $1,120/mt FOB ARA, amid no disproving indications.

 

US Methanol daily: Spot hovers at or below 100 cents/gal

chemical industry

– April, May unchanged on day

– Asian, European pricing mixed

The week opened to unchanged pricing for spot methanol Tuesday, amid limited activity heard for the front and forward months. April and May pricing were unchanged from Tuesday at 100 cents/gal FOB USG and 98 cents/gal FOB USG, respectively. No fresh bids, offers or trades were confirmed over the day. While June was heard talked in the mid-90 cents/gal range late Tuesday, no additional confirmation was available Tuesday. In Asia, the CFR China marker was down $3/mt (about 0.90 cent/gal) to $295/mt (about 88.60 cents/gal). In Europe, the FOB Rotterdam marker was up $3.39/mt (about 1.02 cents/gal) to $306.82/mt (about 92.14 cents/gal).

RATIONALE:

S&P Global  assessed US spot methanol at 100 cents/gal FOB USG for the front month (April) and 98 cents/gal FOB USG for the forward month (May). Both assessments were unchanged on the day in the absence of fresh indications.

US Gulf Benzene daily – Benzene softer to open the week

Imported date

– Crude falls 49 cents on the day

– Styrene gains in line with Europe

US spot benzene prices were softer Tuesday as downstream styrene prices gained. Prompt spot (April) benzene was down 1 cent on the day, with the DDP and FOB assessments closing at 229 cents/gal, while forward-month pricing fell 2 cents on the day and the DDP and FOB assessments closed level to April at 229 cents/gal. Activity increased to open the contract period and sources reported May trading at 229 cents/gal and a June trade heard at 225 cents/gal. Still, benzene was pressured by lower crude pricing as WTI futures fell 49 cents on the day to settle at $63.40/barrel. Meanwhile, downstream styrene prices shook off declines in benzene and gained $25 on the day as European styrene prices moved higher. Prompt-month styrene was assessed at $1,050/mt FOB USG, while forward-month pricing was assessed flat to the prompt month. The prompt spot styrene-benzene spread widened to near $364.50/mt, according to S&P Global  data.

RATIONALE:

US April benzene on a DDP USG basis was assessed down 1 cent on the day at 229 cents/gal on a bid-offer range last seen at 228-232 cents/gal. The April FOB price was assessed down in tandem and closed level to the DDP price. May benzene fell 2 cent on the day, with the DDP assessment closing at 229 cents/gal on a bid-offer range last seen at 228-231 cents/gal and considering a reported trade at the assessed level. The May FOB assessment rose in tandem and closed level to the DDP price. Prompt and forward-month styrene prices were assessed up $25 on the day to $1,050/mt (47.63 cents/lb) FOB USG on a netback to the European styrene price.

Imported data
Imported data

NWE Benzene Chemical Industry – Wide ranges show no strong appetite

Chemical Industry

– Crude slips 58 cents

Chemical Industry remains long

Benzene was off to a quiet start this week, with little activity heard from the Chemical Industry. The 5-30 days forward assessment was down $1.50/mt, based on backwardation between April and May as the month moved forward. Bid-offer ranges were notably absent from the market on Tuesday, with only one range heard for April, albeit at $720-$760/mt, offering little indication as to Chemical Industry direction. Uncertainty on benzene has likely stemmed from a drop in crude prices over the weekend, with inactivity in the benzene Chemical Industry leaving value tied closely to the upstream energy complex. The London 16:30 ICE Brent crude assessment was down 58 cents on Tuesday to $70.99/b. Benzene has also been keeping a tight spread range to feedstock naphtha, remaining rangebound at $150/mt. This is indicative of a long Chemical Industry for benzene in Europe.

RATIONALE:

S&P Global assessed benzene for delivery 5-30 days forward at $722.50/mt CIF ARA Tuesday, down $1.50/mt from Tuesday, due to Chemical Industry backwardation. April was assessed stable at $731/mt, within a bid-offer range of $720-$760/mt. May was assessed stable at $715/mt, based on a curve. 1H May was assessed stable at $716/mt, while 2H May was assessed stable at $714/mt, both with no disproving indications. June was assessed at $699/mt, stable with no disproving indications. July was assessed at $698/mt, $1/mt under June. August was assessed flat to July. FOB was assessed at $722.50/mt, flat to CIF (Chemical Industry).

 

Chemical Industry
Chemical Industry

 

Asian Methanol Chemical Industry : Prices flat to lower in thin trade

Chemical Industry

– Chinese buying appetite tepid for May

– Demand stable in Indonesia ahead of election

Trading in the Asian methanol Chemical Industry was thin Tuesday. Trade sources said Chinese buying appetite for May was lackluster and inventory at China’s eastern ports was still high. “No one has a clear buying idea,” a trader said. In Indonesia, demand was stable in the lead-up to the country’s general election on Tuesday, and trade sources said a Malaysian producer was supplying adequate cargoes to Indonesia. In Thailand Chemical Industry, discussion was thin due to Song Kran festivities. In Iran, Zagros Petrochemical Company shut its 1.65 million mt/year No. 2 methanol plant at Assaluyeh Tuesday for planned maintenance that will take around 10 days, a company source said Tuesday. ZPC’s 1.65 million mt/year No. 1 plant at Assaluyeh is currently operating at 80% of capacity, the source added.

RATIONALE:

Methanol  Chemical Industry was assessed at $295/mt CFR China Tuesday for cargoes delivered 20-50 days forward, down $3/mt from last Tuesday. Domestic east China prices fell Yuan 30/mt over the same period to Yuan 2,425/mt amid discussions at Yuan 2,420-2,430/mt. The CFR Southeast Asia  Chemical Industrial marker was assessed stable from last Tuesday at $335/mt Tuesday in thin discussion.

 

Chemical Industry
Chemical Industry

Asia and Middle East Naphtha Market Commentary

Chemical Industry

Spot cargo offers continued to emerge despite subdued buying interest from end-users, leading to a bearish sentiment in the Asian naphtha market Monday. In India, Oil and Natural Gas Corp. is offering a 35,000-mt naphtha parcel, with minimum 70% paraffin content and maximum 100 ppm sulfur, for April 27-28 loading. State-owned Bharat Petroleum Corp. Ltd. is offering 25,000-30,000 mt of naphtha, minimum 68% paraffin and maximum 250 ppm sulfur, for loading April 27-30 from Mumbai. Both tenders close on April 16 with same-day validity. BPCL sold up to 35,000 mt naphtha for May 2-3 loading at a premium of around $15.5-$16/mt to the average of Platts and Petroleum Argus Arab Gulf naphtha assessments, FOB. Taiwan’s Formosa Petrochemical Corp. is maintaining full run rate at its cracker for olefins production after the fire disruption, and the excess pygas will be sold, a source close to the company said Monday. The petrochemical producer bought around 120,000 mt of open spec naphtha with minimum 70% paraffin content for H2 May delivery last Friday. A day earlier, Formosa sold 30,000 mt of heavy naphtha for April 21-25 loading from Mailiao, market sources said. The award details could not be confirmed. Meanwhile, the LPG-naphtha spread narrowed on the back of tightness of the gas product arising from weather conditions in the US. The discount of Far East Index propane to Mean of Platts Japan naphtha rose $2.50/mt on day to minus $81.75/mt last Friday. The spread was at minus $100.50/mt on March 21.

NWE Styrene – Market shifts to high gear amid prompt and forward trading

Chemical Industry

– Market poised for Shell maintenance

– Asian markers down $10/mt on the day

The European styrene market started the week in a high gear, with trades for prompt and forward cargoes. S&P Global Platts assessed styrene for loading 5-30 days forward at $1,129/mt FOB ARA Monday, up $43/mt on the day. Trades were heard at $1,130/mt and $1,100/mt FOB ARA for April and June cargoes, respectively. “Asia has not moved, and the US arbitrage is wide open so I would assume it is something in the European prompt market,” one trader said in relation to the surge in prompt prices. The buying interest comes as the market remains poised for Shell’s POSM unit maintenance at Moerdijk, in the Netherlands. A Shell spokeswoman said Friday that the company had delayed planned maintenance work at Moerdijk amid ongoing strike action. The POSM unit at the facility has a nameplate capacity of 450,000 mt/year of styrene monomer, according to Platts data. In Asia, the styrene market started the week lower at $1,061/mt CFR China and $1,021/mt FOB Korea Monday, down $10/mt from Friday amid thin trading. One trader said that, while downstream demand is relatively stable, it remains insufficient to eliminate the huge inventory. Market participants continue to monitor styrene inventory levels as the region remains oversupplied.

RATIONALE:

S&P Global Platts assessed styrene for loading 5-30 days forward at $1,129/mt FOB ARA Monday, up $43/mt on the day. April was assessed at $1,130/mt, up $43/mt on the day, in line with a trade at $1,130/mt and above the bid at $1,110/mt. May was assessed at $1,128/mt, up $43/mt on the day, within the bid-offer range of $1,110-1,130/mt. The backwardation between April and May remained at $2/mt on Monday.

 

Chemical Industry
Chemical Industry