OLEFINS
Activity is winding down in the European olefins markets ahead of the year-end, but last week's outages and production hiccups at a number of steam crackers have thrown a spanner in the works. Ineos' cracker at Grangemouth, Scotland, tripped due to the cold weather, but operations were being restarted Friday and the unit should be fully back up this week. Unipetrol's cracker in Litvinov, Czech Republic, and Shell's Wesseling cracker in Germany will remain shut this week, helping to mitigate the previous build in inventory.
As a result, ethylene and propylene discounts to the monthly contract prices are likely to stay under pressure this week.
The butadiene market is expected to continue to look to Asian export markets for a lead in price direction. With excess volumes of butadiene exported to Asia, consumers will continue to book maximum volumes for January.
AROMATICS
The benzene market is likely to remain strong this week amid a number of cracker outages and strength in the crude oil markets. Bullish feedstock benzene and ethylene as well as preparation for Q1 turnarounds are expected to continue to lend support to styrene monomer. The standoff seems set to persist in the toluene market, where sellers are offering at netback values to the US, though buyers are hesitant to pay up as more supplies are expected to reach ARA from southern Europe in the coming weeks.
POLYMERS
The cracker issues might also reverse the slowdown in the polyolefins markets this week, if converters decide to keep the stocks in anticipation of an increase in prices in January.
Producers will try to hold on to material after successfully de-stocking last month.
An anticipated rise in January feedstock SM prices is expected to maintain a bullish tone for polystyrene and acrylonitrile butadiene styrene contract negotiations.
A rise in prices for both PS and ABS in Asia have also limited import volumes, giving an upper hand to sellers.
Higher feedstock paraxylene and tight supplies are also supporting the PET market, despite the low season.
In contrast, ample availability and declining demand are expected to put further pressure on the PVC market this week.
ETHERS AND METHANOL
A tussle for cargoes among Asia, Europe and the US will continue to push methanol prices higher. Europe remains at a discount to Asia and therefore it is expected to continue to lose out on swing Middle Eastern volumes.
European ethers markets will likely remain muted during the coming week and the rest of this year.
Demand continues to be weak but a low factor and little pressure to offload product have also dampened seller interest.
The MTBE factor is likely to remain unchanged in the coming week with outright prices tracking gasoline.
INTERMEDIATES
MEG players will continue to negotiate December contract prices this week as the initial settlement has so far failed to garner wide support.
Although the European caustic soda market's supply and demand balance is expected to remained tipped towards tight in the wake of the ban on mercury cell technology in the production of chlorine, the approaching holiday season is expected to slow market activity in the second half of December.
