Spot ethylene pricing started to decline in the latter part of last week, shedding 2.25 cents/lb, or 7.5%, since Wednesday.
US OLEFINS
Market sources attributed the drop in pricing to weaker demand, despite the startup of a new derivative polyethylene unit last week, as ethylene inventories remained at a healthy level.
Spot propylene has shown similar declines, with spot PGP 3.75 cents/lb, or roughly 8%, lower since the start of the month and spot RGP 5.50 cents/lb, or 14%, lower since the start of October, according to S&P Global Platts data. Market sources have attributed the recent decline in pricing to weakness in demand.
The weakness in pricing comes as October propylene contract negotiations continue. Market expectations for October contract pricing call for a settlement between an increase of 1 cent/lb to a decrease of 1 cent/lb, sources said, adding that as spot PGP continues to fall the chances for an increase in pricing decreases.
US AROMATICS
US benzene prices rose 39 cents/gal last week as sources said supply is expected to remain tight this week, and possibly last through December.
Meanwhile, US styrene prices were stagnant last week, decreasing imports from Asia, sources said. There was cautiousness in buying ahead of possible taxes that could be imposed for 2018, sources said. This was expected to be the case this week as well. A source said China supply was sufficient to satisfy demand despite reserves at less favorable levels. US styrene was assessed Friday at 51.95 cents/lb FOB USG for October and 51.50 cents/lb FOB USG for November.
US toluene saw some support last week as October spot toluene prices were relatively stable on the week, closing Friday's session at 233 cents/gal FOB USG as disproportionation economics improved sharply and blend values continued to strengthen.
Toluene-fed chemical production units saw margins gain on stronger benzene this week as hydro dealkylation units flipped into positive territory. HDA margins gained over $115 on the week and finished Friday estimated at near $99/mt. Meanwhile TDP and MSTDP margins rose $120/mt and $64/mt week on week, finishing Friday at near $190/mt and $105/mt, respectively. The gains come as prompt benzene prices surged, gaining 39 cents on the week to finish Friday's session at 313 cents/gal. Additionally toluene was expected to see some support from gains in blend values, which rose 18 cents to just under 220 cents/gal, according to S&P Global Platts data.
Mixed xylene prices also saw relative stability in an illiquid market, finishing Friday's session at 234 cents/gal FOB USG as demand from the PX segment was muted amid a turnaround at Indorama's Decatur, Alabama, plant as well as the closure of M&Gs Apple Grove plant in West Virginia.
US POLYMERS
Polyethylene export prices are expected to remain stable this week after recently being talked lower, sources said, adding that export activity remains slow amid tight supply.
US-based PE producers who saw their stocks tighten following Hurricane Harvey are likely to continue focusing on meeting domestic contractual obligations, sources have said, adding that as long as domestic spot prices maintain their current premiums to levels needed for export, there remained little incentive for producers to offer hopper cars to traders. Sources have suggested export activity could remain slow into November, though other sources have said ongoing issues with butene, hexene and octene production from a major producer could limit production for multiple PE producers.
US export polyvinyl chloride prices declined $40/mt to $830-$840/mt FAS Houston last week, reflecting tepid buying interest at an October producer deal level of $875/mt FAS Houston. Market sources said exporters were awaiting November offers from producers, and at least one was expected this week, according to a source familiar with that producer's operations. Indications were high that pricing would drop further based on global fundamentals, weak demand and expectations that PVC availability would improve.
Asian PVC prices last week fell to a three-month low with fresh offers at $900/mt CFR China, down $25/mt, and $940 CFO India, down $65/mt.
Two PVC force majeures from OxyVinyls and Formosa Plastics remained in place more than eight weeks after Hurricane Harvey slammed into the middle of the Texas Coast, prompting widespread petrochemical plant shutdowns that have mostly recovered.
US ethylene dichloride and vinyl chloride monomer prices were flat last week, reflecting demand weakness and bearish PVC sentiment. Market sources said prices for those intermediates could decline as OxyVinyls wraps up an EDC turnaround in Louisiana later this month and VCM tracks PVC declines.
LATIN POLYMERS
Polyethylene import prices in Brazil have been trending lower for most grades in recent weeks while supply from the Middle East and Asia improves and expectations call for US availability to improve, sources have said.
Brazilian producer Braskem saw its attempted price increase met with market resistance, sources said, adding that domestic pricing has already reached its high point for 2017.
In South America's key Pacific Coast markets, meanwhile, import prices were also trending lower amid weak demand and buyers banking on lower US-origin offers over the final two months of the year. Imports from Asia and the Middle East continue to arrive competitively priced but with longer delivery dates, sources said, adding that some Middle East offers could arrive well after the year-end holidays when US product is expected to be offered more aggressively.
Pipe-grade polyvinyl chloride prices are expected to decline significantly along the Pacific Coast and were seen by some market participants in the $880-$890/mt CFR West Coast South America range, though no trades had yet been done at that level as of the end of last week. CFR import prices in Brazil were also seen lower, but less so, as reductions in the US still keep that product too expensive due to anti-dumping duties. Prices for Europe-origin resin were seen achievable at as low as $940/mt. Asian-origin product was seen lower, even approaching that level in some cases.
