Sentiment is mixed in the European olefins market as minor production issues meet an expected slowdown in demand.
OLEFINS
European spot ethylene prices are likely to remain at a 2-3% discount to the August contract price, settled at a rollover last week at Eur965/mt (about $1,132/mt).
Ethylene spot market availability will remain somewhat constrained until full steam cracker run rates are achieved.
However, spot market activity could potentially remain muted as Europe enters the peak summer holiday month.
In the propylene market, the spot market is expected to remain firm, as robust downstream offtake, minor production difficulties around the continent and upcoming cracker turnarounds are causing reluctance from traders to sell off inventories.
Butadiene market activity is said to be muted amid the holiday season, with prices remaining stable for the duration of last week.
This followed the fall in the butadiene contract price which settled at Eur750/mt, down Eur75/mt on the month.
POLYMERS
This week, European polymer prices will seek direction from recent settlements of feedstocks.
Polyethylene prices are likely to remain stable as producers and consumers alike react to the August ethylene contract price settlement of a rollover.
While prices are steady, material availability is set to tighten further amid low imports. However, the typical slowdown in summer demand is unlikely to prop prices up.
Sabic's turnaround at Geleen will be supportive to copolymer polypropylene, while homo injection grades are currently sought after by integrated producers which have scheduled cracker turnarounds.
Polystyrene prices are expected to fall in August, in line with a fall in the August styrene contract price.
Sentiment for acrylonitrile butadiene styrene is bearish as a result of feedstock price falls.
AROMATICS
Weak sentiment will underpin the European aromatics market. In toluene, the demand front stands fragmented as arbitrages remain shut.
Solvent demand continues to be lackluster, while HDA conversion economics are far from being anywhere close to positive.
All xylenes are expected to be well supplied this week, with weak buy interest on MX for isomerization or solvents during the summer and gasoline blenders heard leaning towards other octane compounds.
Meanwhile discussions are due to begin this week on the PX and OX European contract price for August.
While all eyes are set on the benzene August European contract price settlement expected on Monday, benzene supplies continue to lengthen amid downstream operational issues.
In the downstream styrene market, the contract price is expected to settle Wednesday. Despite a small turnaround at LyondellBasell/Covestro's Maasvlakte POSM unit which led to spot prices rising at the end of last week, the August contract is expected to see a decline.
METHANOL AND ETHERS
European methanol logistics are expected to improve in the coming week with Rhine water levels expected to surge to over 250 cm at key chokepoints.
Firmer demand has led to a slow increase in prices as Asian markets were reported pulling extra product.
In MTBE, firm prompt demand has pushed MTBE's factor to gasoline to 18-month highs. The strong demand is expected to continue into the coming week and last until at least mid-August.
Blending demand from West African gasoline markets since June has led to a shortfall.
SOLVENTS
Ethyl acetate and MEK markets continue to face upward pressure amid tightness due to production issues.
Meanwhile, acetone prices are facing downward pressure due to an oversupply ahead of upcoming turnarounds.
Butac and IPA markets continue to register either rollovers in price or modest declines.
INTERMEDIATES
Monoethylene glycol prices will likely remain flat this week as material availability balances demand. An uptick in demand in the last couple of weeks from the PET and antifreeze industries was compounded by delayed molecule imports sending prices higher.
With renewed availability, supply and demand will remain balanced, a trend reflected in spot purchase prices.
