Here's a quick look at the factors driving petrochemical markets in Asia this week.
US OLEFINS
Spot pricing for propylene in the US on Friday reached a three-year high of 55.75 cents/lb FD USG, in part driven by recent outages, sources said. An ongoing outage at Dow Chemical's PDH unit in Freeport, Texas, and the delayed startup of Enterprise Products Partners' 750,000 mt/year PDH unit in Mont Belvieu, Texas, were pressuring spot pricing higher, sources said.
PGP was strengthening amid those outages while RGP was resisting substantial upward pressure, keeping the spread between PGP and RGP near 17-18 cents/lb.
Market sources tied the weakness in RGP pricing to softer demand amid an ongoing outage at Formosa Plastics propylene splitter at Point Comfort, Texas.
Meanwhile in ethylene, spot pricing has been on the rise due to unplanned outages. Shell Chemical saw a compressor trip Wednesday at Olefins Plant 3 (OP3) at its Deer Park, Texas, complex and continued to flare product through Friday, sources said.
Additionally, Formosa Plastics' Olefins No. 1 steam cracker and its propylene splitter remain shut after a fire on December 21 at the company's Point Comfort site, sources said.
US AROMATICS
US spot toluene prices fell on the week after declining most days and despite a bounce up on Friday on stronger buy interest, with prompt month pricing closing at 243 cents/gal FOB USG.
Pricing continued to be supported by strong dealkylation and disproportionation margins, bolstered by continued strength in benzene. Dealkylation margins narrowed slightly on the week but were still well in the green with the benzene-toluene spread closing at roughly 68 cents.
HDA margins were last estimated at near $60/mt.
TDP and MSTDP margins also inched lower on the week but saw some support from xylenes, and were last estimated at near $106 and $108/mt, respectively.
Mixed xylenes prices gained on the week after pricing appeared to bottom out in the low-220s cents/gal and prompt pricing was assessed Friday at 232 cents/gal, up 7 cents on the week.
Material was likely to continue moving into the gasoline pool, as mixed xylene's blend value was estimated at near 238 cents/gal.
The prompt spot MX-reformate spread hit its highest point since mid-December, closing Friday at near 15.50 cents/gal, but continued weakness in the domestic paraxylene market in the US posed a threat to future growth.
Spot paraxylene values continued to strengthen, closing Friday at $870/mt FOB USG, supported by rising Asian pricing and strong exports.
US POLYETHYLENE
US polyethylene market participants will be keeping an eye out for potential pricing announcements this week after Dow Chemical on Friday said it plans to raise prices by 4 cents/lb in February, according to a letter to customers obtained by S&P Global Platts. The increase applies to all grades of PE.
Dow did not provide a reason for the higher prices in the customer communication. The announcement comes as some buyers have been heard pushing for lower pricing, with some sources suggesting the combined 10 cents/lb in increases implemented over the course of August, September and October as a result of Hurricane Harvey-related disruptions could be removed by the end of first-quarter 2018.
Despite capacity additions coming on in the second half of 2017 -- with more on the way this year -- spot volumes for export have been heard limited, with sources noting that producers have felt little pressure to move spot resin at a discount.
Traders were still awaiting word from some suppliers on January pricing levels late last week.
LATIN POLYMERS
Market activity is expected to begin slowing approaching normal levels this week following extended seasonal holiday vacations that greatly diminished buy interest, sources said.
Demand for large volumes of imported PE and PP resins was expected to strengthen in January as many of the region's distributors are beginning 2018 with low stocks and anticipating competitive offers from the US, sources said.
In Brazil, local producer Braskem is maintaining stable prices for domestic PE and PP customers, with PP pricing in Brazil already carrying a Real 200 (around $62/mt) increase implemented in December, a company source said. Braskem is implementing an increase of $60/mt on PP exported to South America's Pacific Coast markets, the source said.
