S&P Global Platts outlook for European petrochemical products markets in the w/c May 8:
OLEFINS
A bearish backdrop looms for European spot ethylene and its derivatives this week as naphtha prices have fallen sharply.
The return from maintenance of a number of domestic cracker units across Europe is expected to add length and exert further downside pressure.
Bearishness in the upstream energy complex has also weighed in heavily on propylene prices, which had already begun to decline amid a recovery in supply and are expected to show further declines through this week.
But sentiment remains stable albeit strong on butadiene amid limited supplies in Europe.
AROMATICS
Length in the benzene market will likely pressure prices lower this week, while the downstream styrene market is expected to see ample supply with the arrival of imports in the coming weeks.
Upside potential also seems capped on toluene as conversion margins to benzene remain weak, while arb opportunities remain shut from Europe.
MX prices are likely to remain floored amid a persistent weakness on the buy side, together with a supply glut to absorb any potential demand pockets.
After an initial settle on the PX May ECP, all eyes are now set on the second settlement, albeit with expectations rife of a split settlement.
POLYMERS
European PE prices this week could soften further amid soft consumer demand in a quiet market.
Producers could be forced to lower prices in an effort to spur sales as converters opt to delay material purchases and utilize stocks, ahead of expected further price declines.
The demand behavior remains similar to PE for European PET, where market participants are contemplating covering their requirements either through imports or domestically within Europe.
With expectations of a falling feedstock cost for June mounting, PP demand is expected to remain subdued as buyers purchase hand to mouth.
SBR demand remains lackluster while supplies remains ample, with additional downside pressure expected on prices from feedstock and import fronts.
PS buyers will look to secure a hefty fall in contracts, in line with the Eur245/mt fall in the May styrene contract price, but producers will aim to grow margins amid strong demand and low imports.
ABS demand is expected to remain firm, though buyers are eyeing Asia for supplies amid an open arbitrage window.
METHANOL AND MTBE
Despite some uptick in the European spot market, methanol prices continue to soften globally amid poor Chinese MTO demand.
While reports of 40,000 mt of exports being booked to Turkey and the US Gulf have pushed the MTBE factor higher, European markets continue to be well supplied amid healthy inflows from Russia.
INTERMEDIATES AND SOLVENTS
MEG prices will likely remain stagnant this week amid a reportedly quiet market.
Minimal activity in the market stems from soft consumer demand in both the PET and lubricants industry.
Supplies remain tight on oxysolvents, while etac availability has become limited as imports dwindle.
