OLEFINS
Ethylene producers in Europe managed to push the increased cost of feedstock naphtha into the newly agreed contract price of material in Europe, despite very bearish derivative markets.
With the market balanced to tight there are mixed views about whether the contract price increased will be passed downstream in coming weeks.
Propylene market activity is expected to pick up this week after the contract price was settled Wednesday at Eur927/mt (about $1,138/mt), up Eur10/mt from March, with spot volumes mostly heard pegged at a discount to the contract price.
The propylene outlook for April was not as bullish as expected by market participants, with no production problems reported in the market. But downstream demand remained solid due to the seasonal pick-up in volumes.
The European butadiene market remains bullish, following a Eur75/mt increase in the monthly contract price for April to Eur950/mt FD NWE.
With strikes on the French rail network immediately following the Easter break, market participants are looking to minimize any impact, with alternative forms of transport being sought in some cases.
POLYMERS
Europe's polyethylene markets remain bearish on waning demand and abundant supplies. With no indication that inventories are being depleted at a rate that could lift prices, many sellers are instead hoping a recent stabilization in prices may be the bottom of the market for the time being.
The April contract settlement for PVC has been talked both up and down from another rollover. The Turkish market has been depressed, but some hope for prices picking up based on seasonal demand patterns.
AROMATICS
The April styrene contract price is expected to be settled Tuesday. Expectations for the settlement remains bearish despite a surge in styrene spot prices in the past week as news emerged that BASF has delayed the restart of its styrene unit in Ludwigshafen.
Discussions will open for April PS and ABS contracts following the styrene contract price settlement. Buy activity is expected to pick up in April in the styrenics market, although sellers will remain cautious about import offers quoted in the European market.
The benzene contract price for April plunged $28/mt to $870/mt, as slowly building supply length in Europe over the course of the first quarter has started to weigh on spot prices, although benzene's premium to its feedstock naphtha remains robust.
Looking at toluene, some pockets of shorts at the end of March caused inland Europe consumers to look for volumes in the ARA region, but large downstream outages are expected to alleviate any potential toluene shorts in the near term.
METHANOL-ETHERS
Another week of low demand is expected for MTBE. Blenders should be covered by tanks for blending next week, although demand will start to pick up after this. The methanol spot market is quiet following the rolling over of the quarterly contract price.
With sentiment stable in a balanced market the expectation is that price will remain backwardated with little change in fundamentals.
