October US propylene contracts are expected to reach final settlement this week as they began to settle Friday at a 1.5-cent increase from September, for prices of 48 cents/lb for polymer-grade product and 46.5 cents/lb for chemical-grade product, sources said.
US OLEFINS
The settlement, if accepted market-wide, will fall above market expectations, which recently called for a settlement between a decrease and an increase of 1 cents/lb, sources said. September contracts were heard settled at 46.5 cents/lb for PGP and 45 cents/lb for chemical-grade product.
In ethylene, October contract prices are expected to settle also this week, with market expectations for a settlement between a decrease to an increase of 1 cents/lb. US September ethylene contract price settled at 35.25 cents/lb.
US METHANOL
Methanex cut its North American posted methanol contract price for November by 3 cents to 116 cents/gal ($396/mt) FOB USG, the company said. Methanex's reduction follows SCC's November contract price announcement which rolled from October at 114 cents/gal ($386/mt) FOB USG, the company said Thursday.
With discounts and rebates averaging 20%, the net contract price for October comes to 91.2-92.8 cents/gal. Market participants will look to see if liquidity will hold in the market following contract announcements.
US AROMATICS
US spot pricing posted slight gains on the week as toluene saw support from both the chemical and blending segments. Prompt spot toluene rose 3 cents on the week to finish Friday at 236 cents/gal FOB USG.
Blend values declined slightly on the week but remained strong, closing Friday at near 233.50 cents/gal. Additionally disproportionation margins remained healthy with TDP and MSTDP margins last estimated at near $127 and $77/mt, respectively.
HDA margins posted slight declines on the week, but were still positive at near $35/mt. In supply, toluene imports increased in October, estimated at near 24,000 mt, up from just 3,000 mt in September.
Prompt spot mixed xylenes prices rose 3 cents on the week as well, finishing Friday at 237 cents/gal FOB USG. Demand from derivative paraxylene was muted with Indorama down at its world scale PX plant at Decatur. The prompt spot PX-MX spread narrowed on the week, closing Friday at near $90/mt.
US PE
Polyethylene buyers in the US enter November with expectations that supply will eventually improve -- potentially leading to lower prices -- though it could be the second half of the month before any of that begins to happen, market sources have said. Export activity remains limited, with traders awaiting pricing levels from suppliers. Some have suggested a rollover in pricing from October is possible to open the month.
On the domestic side, October price increases are heard being implemented, marking the third consecutive market-wide hike, bringing prices up 10 cents/lb ($220/mt) since August. Sources have suggested the increases could be difficult to maintain the increases as new capacity comes online and the market returns to normal following Hurricane Harvey.
US PVC
Producers in the US are expected to nominate November prices this week, a move market players have been waiting for with weak global demand pressuring PVC prices. US export PVC prices have fallen $80/mt throughout October to $810-$820/mt FAS Houston by last week as buyers eschewed producer prices they deemed too high given sluggish demand and declining CFR prices in Asia.
Formosa Plastics last week told customers it would lift a force majeure on PVC on Wednesday, more than nine weeks after Hurricane Harvey brought unprecedented flooding that forced widespread petrochemical shutdowns along the Texas Gulf Coast. OxyVinyls lifted a force majeure on PVC last week, while Mexichem lifted one on PVC sales from its US, Mexico and Colombia operations on October 13.
US-based PVC producers also are expected to settle domestic October contracts this week. Producers had sought a 5-cent/lb increase, but more recently a proposed 3-cent/lb increase appeared to gain momentum amid continuing negotiations as the end of the month approaches.
LATIN POLYMERS
Buyers along South America's Pacific Coast could see PVC prices trend slightly lower this week following price declines in the US, sources said.
The Brazilian import market, meanwhile, is likely to see stable PVC pricing following a slight decline a week earlier as Europe and it's recently stable pricing has recently served as the top option for importers, sources said.
Polyethylene prices in Brazil are likely to hold stable or even decline amid anticipation of November price declines tied to market anticipation of new US production leading to greater supply, sources said. PE buyers in key Pacific markets such as Chile and Peru are expecting lower prices to begin November, sources have said, adding that import pricing peaked in early to mid-October.
Resin availability has been heard improving from key the export regions of Asia and the US, with the Middle East also heard offering competitively priced PE cargoes, sources said. Regionally produced PP is expected to remain tight entering November, with at least on South American producer confirming reduced rates due to feedstock supply tightness.
