US OLEFINS: Spot ethylene pricing continues to fall, shedding 1.125 cents/lb last week. Sources say the decline is due to a combination of weak demand and healthy run rates at steam crackers. February US ethylene contract prices settled 2.75 cents/lb lower month on month at 30 cents/lb ($661/mt), sources said Friday. The settlement fell within market expectations, which recently called for a decrease of between 2-4 cent/lb, sources said. Those expectations were driven by a decrease in demand -- particularly from the polyethylene market -- amid planned and unplanned outages, sources said. Meanwhile, in propylene, pricing was stable as demand remains subdued, sources said. Domestic demand remains weak, sources said, adding that demand that has been diminished so far this year due to high propylene costs, particularly in the polypropylene sector, is likely to pick up amid expectations that March contract pricing could shed 5-7 cents/lb, sources said.
US AROMATICS: After mixed xylene prices shed roughly 34 cents last week to close Friday at 256 cents/gal FOB USG, players are bracing for further declines tied to steady derivative demand being met with greater supply this month, sources said. Blend values are likely to set the floor, however, and the MX blend value finished Friday near 228 cents/gal. The MX-reformate spread narrowed week on week and finished Friday near 36 cents/gal. Spot toluene also moved fell last week, although to a lesser extent. Prompt spot toluene fell 11 cents week on week and closed Friday at 273 cents/gal FOB USG. Demand was muted as disproportionation economics were poor, but spot benzene prices are expected to remain firm as derivative styrene units restart and this was expected to bolster margins. MSTDP margins finished the week positive near $20/mt, but TDP margins fell sharply on pressure from the MX price weakness and closed Friday near minus $42/mt. Toluene's blend value held only a 4.5-cent premium to reformate, while the spot price held a near 53-cent premium to the spot reformate price.
US PVC: Negotiations for March polyvinyl chloride export pricing wrapped up last week with offers falling $30/mt compared with initial nominations that met market pushback. Offers that ranged between $920 and $935/mt FAS Houston settled between $890 and $905/mt FAS Houston, with market participants terming deals above $900/mt FAS Houston as unworkable, although settlement at $905/mt FAS Houston illustrated willingness to reach that level. However, multiple deals were heard done last week at $890/mt FAS. Producers had been bullish on seasonal PVC demand, with the spring construction season looming and expectations of limited export volume availability tied to Shintech's turnaround at its 1.4 million mt/year PVC plant in Freeport, Texas. In addition, Westlake Chemical's supply availability has thinned due to operational issues within its system, according to sources, further shrinking available export volumes. Even so, traders say weak global demand deflated initial price nominations to levels where deals were considered workable. Sources also said Formosa Plastics expects to produce 85-90% of its normal export volume in March after restarting a 681,000 mt/year cracker in Point Comfort, Texas, in mid-February after a two-month outage.
LATIN POLYMERS: Buyers in Brazil enter March faced with stable domestic PE pricing for seemingly the first time this year following sharp increases in January and February, sources said, adding that PP pricing will increase Real 150/mt ($46/mt) this week for converters in Sao Paulo. Demand in Brazil is expected to be stable to stronger this week as more players return from extended seasonal vacations and Carnival celebrations last month, with most of the market dealing with reduced stocks, sources said. Availability of low density polyethylene in Brazil is expected to continue improving this week following the restart of a damaged 6,000-mt/month line at Braskem's Triunfo plant in Rio Grande do Sul, sources said. PVC buyers in Brazil are dealing with a Braskem price increase for March, with a company source pegging the hike at "an average of 7% in March." Spot PVC import supply from Europe is expected to remain tight in Brazil throughout this month on regional producer outages, sources said. Along South America's Pacific Coast, buyers are likely to continue seeing little PE availability from the US and Asia, with offers from both regions being deemed unworkable for restocking, leading several importers to opt for smaller "holdover" volumes, sources said. PP availability is expected to improve in Chile in March from Colombia as producers ramp up run rates in the wake of lower feedstock propylene pricing in the US in recent weeks, sources said.
