PET fundamentals are expected to remain balanced, while methanol prices in Europe have found some support from Asian and US markets where prices firmed through last week.
OLEFINS
Platts ethylene and propylene contract price indicators for December were assessed at Eur1,040/mt and Eur878.50/mt respectively, compared to the November contract prices of Eur1,025/mt and Eur860/mt on strength in the energy markets and despite sluggish spot activity in the olefins market. Contracts are expected to settle this week. Butadiene contract prices dropped Eur100/mt last week.
POLYMERS
PET fundamentals are expected to remain balanced as spot demand remains slow. But many producers are out of stock for the next few weeks. Polyethylene and polypropylene markets await ethylene and propylene settlements this week to give them direction. The return of Borealis' PE and PP assets in Schwechat, Austria are expected to add bearishness to the spot PE and PP markets. Polystyrene converters are anticipating a price hike in December. As a result, spot activity is expected to remain firm as buyers scramble for volumes before the price rise.
AROMATICS
Sentiment remains cautious for MX as many buyers anticipate downward adjustments in prices, with no supply tightness heard. Market participants will be closely following developments in PX Asian contract price discussions for December, to gauge the expected price changes for Europe. The European December styrene contract price will settle at the end of the week, and expectations are bullish. Although supply had been ample in November, the market is expected to tighten as buyers stock-up ahead of a tight Q1, 2018. A rise in the December benzene contract price seem inevitable as spot prices have been trending at a significant premium above the November contract price of $815/mt.
METHANOL AND ETHERS
Methanol prices in Europe have found some support from Asian and US markets where prices firmed through last week. An arbitrage to export methanol out of Europe to Asia is currently open, but it remains to be seen if cargoes will move. MTBE and ETBE markets have had low demand recently and this is expected to continue as the year-end approaches. Bearish ethanol is adding to pressure on ETBE.
INTERMEDIATES
The MEG spot price remains flat with bearish sentiment in the market. Demand for anti-freeze is yet to ramp up and there are also reports of producer de-stocking ahead of year-end, leading to plentiful supplies on the market. The European caustic soda market is moving into late November with balanced-to-tight supply and demand fundamentals, with new production shutdowns planned for December.
SOLVENTS
Italian petrochemical producer Versalis lifted a force majeure on its acetone and phenol production at Mantova last week. This is expected to exacerbate already bearish markets.
