S&P Global Platts outlook for European petrochemical products markets in the w/c June 5:
OLEFINS
Contract prices for all olefins have fallen for June. Ethylene, propylene and butadiene contract prices were settled at decreases of Eur35/mt ($39.50/mt), Eur40/mt and Eur300/mt (respectively, reflecting falls in naphtha in the month of May.
Supply shorts due to issues at both crackers and refineries are seeing Europe continue to look to the US, especially for propylene.
A further delay in the start-up of Sabic's Olefins 3 cracker at its site in Geleen in the Netherlands could lead to prompt tightness in the ethylene market, where material is otherwise balanced.
The cracker is expected to restart this week. Total's Feyzin refinery and cracker began the restart process following a three-week strike, the company said May 24. It was unclear if the Antwerp cracker in Belgium had restarted following planned maintenance.
Butadiene spot prices meanwhile remain under downward pressure from weakness in Asia.
Monoethylene glycol prices this week will likely stay flat amid a quiet market.
While availability appears balanced, a lack of demand from the antifreeze and polyethylene terephthalate industries will stifle any major upward movement in prices.
POLYMERS
Falls in June contract prices for ethylene and propylene have set a bearish tone for the month.
The polyethylene and polypropylene markets were heard well supplied going into June on account of arbitrage open into Europe.
Converters were said to be in the driving seat in the European polypropylene market.
Polyethylene prices this week could see further decline off the back of last week's C2 settlement.
A soft Asian market and weak European demand are likely to persist.
The European polyvinyl chloride market awaits the impact of the lower ethylene CP on forthcoming price negotiations, with discussion over how much of the monomer decrease would be passed through.
Some participants were hopeful of a Eur20/mt decrease in spot and contractual pricing.
June contract negotiations for polystyrene will begin, with producers nominating prices at an increase of Eur45-50/mt compared to May.
In the acrylonitrile-butadiene-styrene market, however, prices are expected to decrease in June, in line with falling feedstock costs and increased import pressure.
Styrene butadiene rubber has come under pressure following the settlement of butadiene for June at Eur300/mt below May levels.
Several producers are expected to make fresh nominations for June next week.
Low-priced cargoes look set to continue being offered from South America and Russia.
AROMATICS AND BLENDING COMPONENTS
No benzene arbitrages are open in or out of Europe.
A tightening pygas market and lower hydrodealkylation run rates in Europe could start to be felt in NWE availability.
The toluene arbitrage to the US Gulf is open on paper, but volatile benzene prices in both the US Gulf and Europe could hold traders back from moving product.
Lower HDA run rates and imported cargoes on offer in ARA could pressure the market.
Orthoxylene supplies are still tight, but as resupply from Asia comes to the region and as BP and Shell resume normal production in Germany, this pressure is likely to ease.
The direction of the styrene spot market will depend on whether production issues at Trinseo's German Bohlen unit are resolved.
MTBE markets look set to remain balanced. The shortfall in supply as a result of Lyondell's turnaround and Evonik's force majeure is cushioned by a drop-off in demand and solid Russian supply.
INTERMEDIATES
Falling feedstock prices are painting a bearish background for the acetic acid and vinyl acetate monomer markets in Europe. However, AA prices are still holding as methanol Q3 CP negotiations are yet to start.
VAM prices are likely to slide lower as availability is getting better. Caustic soda will remain tight, with prices already hovering at a four-year high, amid low inventories.
With the bullish outlook for June and summer in general, producers are heard targeting a $20-30/mt increase from May and Q2.
Atmosa's phthalic anhydride plant in Schwechat will reach full production rates later in June as its second line ramps up, a company source said Thursday.
METHANOL AND SOLVENTS
Methanol market activity is likely to halt during the coming week as nearly all market participants attend a major industry event.
Market fundamentals remain bearish as demand from Chinese methanol-to-olefins plants continues to disappoint.
Oxy-solvent products have all turned from moderate to critically tight to balanced or facing downward pressure.
The change in fundamentals has been the result of imports and improved production matched against stable but not strong demand.
