S&P Global Platts outlook for European petrochemical products markets in the w/c May 30:
OLEFINS
June olefins contracts will settle this week and prices for all of them are expected to drop from May levels. The sharpest plunge is expected for butadiene, for which a series of low-priced spot deals were reported last week.
Ethylene and propylene contracts are also expected to decline but the recent rise in naphtha prices will cushion the drop.
European monethylene glycol prices will likely remain flat this week, but could see some upside as antifreeze producers look to secure material ahead of any price jump.
POLYMERS
Lower settlements for olefins contract prices are expected to pressure polymers prices. High polyethylene inventories in Asia and weak demand in Europe will likely compound bearish sentiment.
Many polypropylene converters are certain that the product will follow the downward direction of propylene but with even greater magnitude.
Expectations are similar for styrene-butadiene rubber, where market participants are waiting for the June settlement for butadiene to gauge the direction of prices.
Polyethylene terephthalate is the only polymer expected to hold strong for June as demand has gained momentum, with many producers already sold out till H2 June dates.
Polystyrene converters are expected to continue pushing for lower prices.
AROMATICS, BLENDING COMPONENTS
The outlook is cloudy on mixed xylenes as arbitrage opportunities are still shut from Europe.
It remains to be seen if MX sell interest will resurface amid a recovery in MX premiums over gasoline.
MTBE continues to largely track gasoline moves amid a relatively stable factor.
Markets are facing moderate near-term tightness as a result of a turnaround at one major European producer and a force majeure at another.
The European spot toluene market will stay long amid an ongoing build-up in supply.
The June benzene contract price is expected to settle next Wednesday. Expectations are that the price will see only modest changes from May.
In dollar terms, no significant changes are expected although in euro terms, benzene is expected to decline given the stronger euro.
The styrene June contract price is expected to settle Thursday, with expectations ranging from a decrease of Eur20/mt to an increase of Eur50/mt.
Bullish expectations are based on rising styrene spot prices in mid-May, but costs are expected to decrease.
METHANOL AND SOLVENTS
Methanol market activity spiked just before the long weekend amid signs current prices levels are being accepted by both sides.
Chinese methanol-to-olefins conversion demand has remained weak and this is likely to continue.
All oxy-solvent markets have now turned bearish following weeks and months of record high prices for many products amid crippling tightness.
Prices are expected to decline over the coming weeks.
