US OLEFINS
Spot pricing for olefins in the US has been stable as fundamentals remained relatively unchanged last week. Spot ethylene was hovering around 27.50 cents/lb FD USG last week, after shedding 1.50 cents/lb from December 8 in the wake of recent steam cracker restarts. Market participants are awaiting the restart of Shell's OL-5 steam cracker in Norco, Louisiana, after it went down on December 4 for a planned maintenance.
US METHANOL
US spot methanol prices climbed 7 cents over the week to close Friday at a nine-month high amid strong demand and supply constraints in Asian markets. Spot activity is expected to slow this week and stabilize US pricing ahead of the Christmas and New Year's holidays, sources have said.
In contract news, January contracts are expected to settle 7-10 cents/gal higher on the back of recent gains in spot pricing, sources have said. US methanol contracts typically are announced by producers Methanex and Southern Chemical Corp. during the last week of the month.
US AROMATICS
Spot mixed xylenes prices remained soft last week, with December barrels heard traded at 219 cents/gal FOB USG and stable for the period, sources said.
MX pricing appears to have bottomed out amid limited downstream paraxylene demand and unattractive extraction economics. The prompt spot mixed xylene-reformate spread widened week on week but remained soft at just under 11 cents/gal.
Sources anticipated that material would continue to make its way into gasoline before the market tightened somewhat in January. While supply was expected to contract, there was still some question around near-term demand.
The mixed xylenes blend value was at near 199 cents/gal, roughly 7 cents below the reformate blend value. Spot toluene prices were relatively steady week on week, closing Friday at 253 cents/gal FOB USG, and were expected to remain so throughout December.
Pricing and demand continued to be driven by toluene conversion margins, and TDP and MSTDP margins finished stronger week on week at near $63 and $98.50/mt, respectively.
Demand from the chemical segment was expected to continue supporting toluene pricing in the near term as demand from the gasoline segment was absent.
Toluene prices were expected to face pressure amid expectations of toluene imports to the US. Additionally, an uptick in benzene imports could pressure benzene pricing lower, crimping disproportionation margins, sources said.
US POLYETHYLENE
Domestic polyethylene contracts appear poised for a lower December settlement, with business possibly concluded later this week ahead of the year-end holidays.
There were expectations that prices would move down by 3-4 cents/lb, though sources said they had yet to see any market-wide movement late last week.
One market participant noted some non-market settlements were starting to be seen at those levels.
On the export side, available volumes have been heard limited, with sources indicating that it was difficult to secure more than a few rail cars from producers. The sentiment was shared by packaging warehouses, which have seen lower-than-expected volumes so far in December.
Exporters were finding buy interest low at current levels, with buyers in key global markets pushing for typical year-end decreases that are traditionally seen in the market.
The growing belief is that January and February will provide more activity, with sources noting that typical market conditions have been delayed by a few months due to the lingering effects of Hurricane Harvey.
LATIN POLYMERS
Buying interest remained soft last week in the import and domestic markets as almost all of the region concluded December purchasing during the first week of the month, sources said. Many industries deal with production slowdowns or shutdowns during the second half of December as vacation season and port closures take their toll on market activity, sources said.
In the PE markets, importers continue to field competitive offers from the US on most grades while eyeing more room for downward pressure in January, sources said, adding that most restocking would take place in early Q1 2018.
While LDPE and LLDPE have become relatively easier to source from the US for Latin American buyers, HDPE supply remains tight, particularly on film grade.
