Ethylene, the building block for the largest set of petrochemicals, is expected to remain well supplied into Europe this week.
OLEFINS
However, the two other olefins -- propylene and butadiene -- are expected to remain tight. Propylene and butadiene players are struggling to find material and spot prices are trading at a premium to the June contract price.
POLYMERS
Feedstock olefins are expected to have an impact on downstream polymers. Negotiations for polypropylene June contract prices are likely to continue over the coming weeks with buyers starting to accept increases given higher feedstock costs.
The European polyethylene markets are expected to see contract prices increase in June, with negotiations well underway following an increase for feedstock ethylene's June contract price.
European polyvinyl chloride producers will continue to push a heavy pricing increase based on a Eur63/mt uptick for feedstock ethylene. The polyethylene terephthalate market is reporting a severe lack of spot material because of tight feedstock supplies from Asia.
Polystyrene producers are expected to attempt to increase margins in June, although buyers are in no rush to purchase.
AROMATICS
Mixed xylene and toluene fundamentals remain under pressure amid persistently weak spot demand from chemical users. Bearish moves in the US have curtailed the scope of toluene exports from Europe. Meanwhile, negotiations are ongoing for the paraxylene and orthoxylene June contract prices.
The European styrene market is set to be balanced this week as Trinseo is expected to restart its Bohlen unit in Germany.
INTERMEDIATES AND OTHERS
Methanol prices are expected to continue their upward trend ahead of the contract price settlement for the third quarter and on the back of supply concerns.
Monoethylene glycol is seeing healthy demand from downstream PET producers. Caustic soda supply in Europe is expected to remain steady.
