European ethylene spot prices for October were assessed at flat to the October contract price of Eur1,025/mt (about $1,209/mt) FD NWE Friday, compared with a 2% premium last week as maintenance season drawers closer to an end. Borealis' Porvoo steam cracker in Finland is expected to produce on spec this week following its planned outage. There is expectation of lengthening supplies.
OLEFINS
The European propylene spot market is expected to remain on its course towards more balance, as cracker and refinery run rates are generally robust in Europe. Downstream offtake remains firm. In butadiene, the European market is under pressure amid the recent downturn in Asia. European markets were also heard well supplied for both butadiene and feedstock crude C4.
POLYMERS
Buyers and sellers for polypropylene are currently in a stalemate, as sellers want to increase prices beyond the Eur30/mt contract price increase for propylene in October. Heavy pre-buying in August and September will enable converters to maintain their wait-and-see stance for a little while longer, as imports could arrive in the second half of the month.
In the general purpose polystyrene market, sellers are limiting the decrease in October to below the styrene price fall. But a bearish outlook for the rest of Q4 has allowed buyers to minimize volumes. Fundamentals are firm, however, in the expandable polystyrene market, with sellers able to improve their margins further in October.
Polyvinyl chloride prices are expected to remain firm following the recent surge in feedstock ethylene, good demand and relatively low inventories. In the polyethylene terephthalate market, recycled product is seen tight as some recyclers have set up sheet manufacturing units reducing supply into the spot market. Demand is seen low for virgin PET as the peak summer offtake is over.
AROMATICS
Demand for toluene and mixed xylenes has picked up as Platts Market on Close assessment process has seen ascending bids for the two products recently. Nevertheless, xylenes and toluene markets are currently seen as well supplied.
The benzene market has been balanced, with prices trending in a narrow range so far in October, and this is expected to continue this week. There may be some upward pressure from demand if Cepsa lifts its force majeure on phenol and acetone.
Length in the European styrene market may clear as imports in the second half of October are expected to be limited and demand remains firm.
SOLVENTS
The impact from Cepsa's acetone and phenol force majeure looks to be minimal as Ineos and Versalis return to spot markets. Supply is also topped up by Asian imports.
INTERMEDIATES
Caustic soda touched fresh highs last week amid low industry stock and residual effects of interrupted supplies from the US in September. Despite resumption of supplies from the US, prices are expected to remain high amid healthy demand. Acetic acid is characterized as tighter compared to vinyl acetate. Distributors have healthy stocks of VAM which is expected to put pressure on prices.
METHANOL AND ETHERS
European methanol markets look to have found a price equilibrium even as markets continue to look long. The spot price is likely to remain more than 20% below contract prices in the coming week.
MTBE markets continue to be weak with little blending demand as a result of high naphtha prices vs low gasoline prices. MTBE's factor is likely to remain at its low point yet the volatility of the past weeks looks to be over.
