European crackers continue their efforts to increase competitiveness by using cheaper gaseous feedstocks.
OLEFINS
Total has started up production at one of its two Antwerp steam crackers in Belgium using ethane feedstock from Norway.
In the meantime Borealis is expecting an imminent arrival of the vessel Navigator Aurora following it first transatlantic voyage carrying US ethane to be cracked in the company's Swedish cracker in Stenungsund.
Unipetrol is expected to restart its Litvinov steam cracker at the end of this week after a 10-day maintenance.
The olefins markets in the region continue to face downside pressure. Propylene demand might tail off on the back of the POSM plant outage in Moerdijk, the Netherlands.
Butadiene availability is also solid, although an uptick in Asia and relatively good demand could offset this pressure.
Ethylene continues to trade at a small discount to the contract price of Eur965/mt FD NWE.
AROMATICS AND MTBE
The ongoing outage at the Shell/BASF POSM JV in Moerdijk, the Netherlands, is supporting styrene prices at the front end. The backwardation is likely to persist despite the imminent restart of Trinseo's Bohlen SM unit in Germany.
The outage is weighing on feedstock benzene. The tug of war continues between buy and sell sides on toluene, as the demand front remains fragmented. Nevertheless, toluene spot prices have stood above the July ECP level.
Mixed xylenes is the only xylene seeing slightly tight supplies as others are well supplied.
MTBE will remain volatile following the closure of the gasoline arbitrage to the US and the subsequent redirection of gasoline exports to the WAF market.
POLYMERS
It appears that the tide is turning in the European polymer markets. With a feeling polypropylene prices have now bottomed out, there could be more buy interest as consumers try to replenish their stocks.
The unexpected rise in styrene prices is causing a headache to downstream polystyrene producers, who are facing a prospect of deteriorating margins.
Negotiations will be difficult as demand typically slows in July and converters had expected flat to lower prices in July.
PET demand is expected to find support as traders and converters continue with procurements to meet summer demand.
ABS and SBR are the only markets where sentiment remains bearish. However, as the arbitrage window from Asia closes, there is a chance prices could stabilize.
SOLVENTS AND INTERMEDIATES
Oxygenated solvents have been easing, however, several production problems on MEK and etac have raised the prospect of renewed tightness.
Methanol is flat-lining following the Q3 CP settlement.
EU's duty-free quota for VAM imports has been fully allocated, and from this week imports into the bloc will incur a 5.5% import duty.
European production of ACN is running well for the first time this year, and spot prices could come under further pressure after having lost $275/mt since June.
Downside to MEG and DEG is expected to continue with soft demand from derivatives like PET.
