Market participants entered the week with mixed feelings on the direction of August polyethylene contracts in the US, with momentum for an announced 3-cent increase seemingly slowing in recent days.
US POLYMERS
Producers are pushing for a 3 cents/lb increase on August contracts, with Equistar and Dow Chemicals announcing an additional 4-cent increase for September.
Export pricing was stable to higher last week, with sources noting that limited availability was prompting an uptick in offer levels for available resin in some grades. But with weak demand in key export destinations and expectations by buyers for lower pricing in the coming months, some exporters noted that it has been difficult to conduct business at current pricing levels.
US METHANOL
The market continues to be talked relatively stable and dealing with healthy supply-and-demand fundamentals, according to sources.
Last week saw five trades, including two Wednesday deals reported at 90 cents/gal and 90.5 cents/gal FOB USG for August, two September deals done Tuesday at 90 cents and 90.50 cents/gal FOB USG, and one Friday following the Market on Close process for September at 90.75 cents/gal FOB USG.
Market thoughts were mixed, with a trader saying, "I don't know if the drive behind prices are any production issues from a plant or trading simply supporting the spot market price."
US AROMATICS
Prices softened throughout much of last week prior to receiving a boost Friday from sharp gains in energy.
Sustainability will be a focal point as blend values last week disconnected from both toluene and mixed xylene prices, finishing the week down roughly 12 cents at around 200 cents/gal, according to S&P Global Platts data. With blend values lower, increasing demand from the chemical segment may be necessary to sustain current price levels, sources said.
Toluene-fed chemical production margins were relatively soft and mostly level last week, with HDA well entrenched in negative territory at minus $10.71 while TDP and MSTDP margins closed the week at $82.83 and $58.80/mt, respectively.
Margins are heavily influenced by benzene prices and spot benzene and US M1 benzene values on a DDP basis rose 9 cents last week to finish at 259 cents/gal.
Still, US aromatics prices were likely to face pressure in the near term as Citgo returns from a planned reformer maintenance at its Lake Charles complex during the second half of August.
LATIN POLYMERS
Buyers in the spot polyethylene market could continue to eschew imports in favor of locally produced resins, which have been priced competitively in recent weeks.
Buyers have reported limited availability of US-origin resins and that when encountering offers they have been firming at elevated levels.
Polypropylene buyers in key Pacific Coast markets have seen offers from the US firm as well, although Asian resin remains less attractive due to expensive freight rates, sources said.
In the domestic Brazilian market, local producer Braskem is maintaining stable PP and PE prices this week while raising offers to Pacific Coast markets by roughly $30/mt when compared with July prices, a company source said late last week.
The PVC market in South America remains depressed, sources said, adding that import demand is week amid reports of high inventory levels among distributors and end-users. PVC importers along the Pacific Coast are bracing for higher offers as the region's winter season winds down and tighter global supply applies upward pressure to pricing, sources said.
