Fundamentals in the propylene market are set to remain on trend towards balance, although some downstream outages in Spain could create length.
OLEFINS
In the ethylene market, spot market activity increased in earnest last week as a number of deals concluded during the EPCA weekend in Berlin were reported.
Driving the rising prices has been firm demand, amid limited material being sold in the spot market and rising prices for major derivatives. Those trends are set to continue this week as downstream users look to raise major derivative prices.
In the butadiene market, prices should soften this week following the recent fall in Asian prices and with flat demand levels.
POLYMERS
Demand for polyethylene terephthalate has eased off from the summer months. In polystyrene, expectations of further price decreases in November may weaken seller positions.
Nevertheless in the expandable polystyrene market, high uptake could widen producer margins.
Meanwhile, polypropylene sellers are attempting to raise contract and spot prices beyond the Eur30/mt monomer increase, but the lack of export opportunities and heavy pre-buying in August and September means buyers have a strong bargaining position.
Polyethylene prices are likely to rise as consumers return to the market, firming demand. Producer stocks remain low, constraining domestic material supply which, coupled with diminished imports, will put further upward pressure on PE prices.
PVC remains bullish following the rise in feedstocks and with solid demand amid thin inventory levels.
AROMATICS
Benzene demand should be stronger with the completion of maintenance works on downstream acetone and phenol units.
While mixed xylene supply was heard to have improved compared to last week, the orthoxylene market continues to be glutted on supplies from Russia.
No indications are being heard for paraxylene in the spot market and traders continue to follow indications from Asia.
Meanwhile, the styrene market is expected to lengthen as imports from US and the Middle East continue to arrive.
SOLVENTS
A force majeure on acetone and phenol at Cepsa has failed to have a significant impact on material prices.
BASF's butac production will be fully back by next week following its long term absence from markets but prices are not expected to be immediately affected.
INTERMEDIATES
Caustic soda prices were assessed at a fresh high, not seen since Feb 2009 Tuesday at $600/mt. Prices have accelerated amid low stocks and this tightness is expected to continue.
METHANOL AND ETHERS
European methanol markets continue to look to Asia for direction amid stable market fundamentals following the new quarterly contract prices and the conclusion of a major industry event.
Meanwhile, MTBE market activity registered a noticeable increase last week even as the factor to gasoline hovered around a similar range.
In a continuation of trends, markets are likely to continue to see stability in the coming week and move in line with gasoline prices.
