European PET prices have jumped, with market sources saying this could last until H2 September on very short supply, particularly for spot contracts.
POLYMERS
Prices jumped 10% in NWE last week. Bullish propylene will support spot prices. Material from the Middle East could be on the horizon as rising European prices coupled with a strong euro could facilitate imports to Europe.
Polyethylene prices could rise further this week as material availability continues to tighten, with traders and speculative consumers returning to the market in an effort to take advantage of relatively low summer prices.
The trend will be most noticeable in LDPE and Butene grade LLDPE, as consumers, wary of an expected September price hike look to secure volume.
OLEFINS
European spot ethylene prices will likely remain flat to the August MCP of Eur965/mt as material availability remains tight.
The short European market will continue this week as domestic production remains constrained as Shell looks to lift the force majeure on ethylene from its Moerdijk facility.
While ethylene cargo imports from the Middle East have increased in recent weeks, with another parcel of 6,800 mt scheduled to arrive in early August, the volume is unlikely to provide much relief in terms of spot prices for consumers.
Unlike other olefins like ethylene and propylene, c4s had not been impacted by problems at Shell's Pernis/Moerdijk units in the Netherlands, sources said.
AROMATICS
Styrene is set to remain under pressure from imports, while demand eases for August dates. Toluene demand is fragmented on little blending interest, closed arbitrage, and negative HDA economics. Meanwhile, supplies appear ample.
All xylenes are expected to be well supplied this week, with low demand seen for PX and OX, and a similar story for MX with little demand for gasoline blending and consumers leaning on other octane compounds.
After flipping into a contango structure last week, it remains to be seen whether downstream SM plant run rate increases will boost benzene spot demand in coming days.
METHANOL, MTBE
The European methanol market could potentially be lifted in the coming week by supportive Asian markets with a noticeable decline in market activity over the last week.
Supply and demand fundamentals remain balanced despite fluctuating Rhine water levels.
Prompt MTBE availability continues to be reported as very tight as a legacy of the sharp prompt demand in early July for WAF gasoline blending following closure of the Europe/US gasoline arbitrage. Shell's recent production problem have exacerbated matters.
SOLVENTS, INTERMEDIATES
Shell's Pernis shutdown of the solvents units has left IPA and especially MEK facing severe to desperate tightness. Prices are expected to continue rising in the coming week.
MEK is being reported as extremely difficult to source with rocketing prices. European MEG prices appear set to remain stable this week as supply now balances demand.
An uptick in demand from the PET industry had spurred MEG spot prices higher in recent weeks, a trend compounded by delayed imports which temporarily shortened the market.
