AROMATICS
The US benzene market may see continued pressure from the downstream styrene market heading into the week after LyondellBasell-Covestra declared force majeure on production from its propylene oxide styrene monomer unit at Maasvlakte, the Netherlands. US styrene exports emerged last week in light of the production issues at Maasvlakte, and could also continue to move overseas this week. The demand from the styrene market has otherwise kept benzene from seeing further declines amid lackluster energy futures. Sources have said with the US summer driving season nearing an end, toluene and xylene markets may see a decline as refiners look to transitional gasoline grades. Supply has been well-stocked for aromatics alongside thin demand and more competitive blendstocks. However, mobil selective toluene disproportionation markets still remain positive and have been an outlet for toluene supply. The MSTDP margins, which were at $112.34/mt on Thursday, are expected to remain positive heading into the week. Toluene disproportionation (TDP) margins, which have also been in positive territory since late July, may also stay positive this week. TDP margins were at $37.44/lb on Thursday.
US METHANOL
US spot methanol participants expect bearish market conditions this week, as trading activity remains thin. OCI Beaumont's 912,500 mt/year methanol unit in Beaumont, Texas, was heard to have successfully restarted by Friday following an unplanned outage on July 24, multiple sources said. Further confirmation and details were not available. Sources suggested the site went down because of a steam methane reformer issue, putting expectations that it could take 10-14 days for the plant to come back online.
US OLEFINS
Ethylene participants will be monitoring the impact of recent production issues in the US. Ethylene spot prices ended on Friday at 15.25-15.75 cents/lb FD USG, up 0.50 cents/lb on the week amid a series of production issues. Market participants are still awaiting word on the impact of a compressor trip at the Chevron Phillips Chemical Sweeny 33 steam cracker in Old Ocean, Texas. This comes after the company recently shut its 670,000 mt/year Sweeny 24 cracker for a 25-day maintenance. In addition, last week Ineos reduced operating rates and restarted an acetylene reactor at its 910,000-mt/year ethylene-capacity Olefins No. 1 cracker in Alvin, Texas, following a process upset. Meanwhile, the propylene market may continue to its downstream with all three US propane dehydrogenation up and running this week. Flint Hills Resources recently restarted its 658,000 mt/year PDH unit in Houston in early August. Propylene spot prices on Friday was assessed at 59.75 cents/lb FD USG, down 1 cent on the week.
US POLYMERS
US polyethylene export market participants are working to process the implications of additional US resin grades finding their way on to future tariff lists from China as the two countries continued to engage in an escalating trade standoff. There were indications the move would lead to shifting trade flows and possible downward pricing pressure on an increasingly long US market. Producers continued to seek a 3 cents/lb ($66/mt) increase for domestic polyethylene prices, which were pushed to August after contracts rolled over. Dow Chemical said late last week that it also planned to implement an additional 2-cent increase on top of previously announced increase. US polypropylene market participants were keeping a close eye on feedstock propylene prices as there was some expectation that gains in the spot monomer market and talk of continued upstream tightness could ultimately result in higher resin contracts.
US PVC
US polyvinyl chloride pricing was expected to linger in a range of $800-$810/mt FAS Houston this week as producers watch for fresh September offers in Asian markets as a bellwether of pricing direction. US export PVC prices have fallen nearly 5% since July 25 as weak global demand prompted buyers to push for a sharp decrease. However, Asian prices ticked up for August, though US buyers noted a major producer offered half the normal supply and no volume discounts amid monsoon season in India. China's Commerce Ministry removed US PVC from its $16 billion list of retaliatory tariffs on US products, which is slated to be implemented August 23 after the US imposes the same value of tariffs on Chinese goods on that date. However, PVC precursor ethylene dichloride remains on the list, and market sources say the top export market for US PVC is expected to face higher EDC prices from other sources while tight supply in the US lays the foundation for higher pricing of US export EDC to other markets as well.
LATIN POLYMERS
Polyethylene buyers in key South American markets will be monitoring availability and pricing out of the US, especially on high-density and linear-low-density grades, following last week's news that both would be taxed 25% by China. Initial reaction pointed at expectations for US export PE trade flows to be shifted from Asia to Latin America -- namely Brazil -- bringing hope that lower pricing would begin to emerge as early as this week, sources said. Along South America's Pacific Coast, PE demand could be poised to rebound this on signs of political stability and favorable pricing, sources said. LDPE buyers are expected to continue looking for a price floor after pricing has trended lower in recent weeks. On the polypropylene front, South American buyers will continue to monitor Asian consumption following weeks of soft demand in the Far East, a dynamic that had led to an influx of competitively priced, on-the-water cargoes originating in India and the Middle East. Many buyers in recent weeks have indicated they are looking for signs that a pricing floor has been reached before committing to larger, restocking volumes. Along
LATIN AROMATICS
Market participants will continue to monitor operations at Alpek's Altamira purified terephthalic plant following company statements indicating an August restart is planned. The PTA plant uses paraxylene as its feedstock, with import supply and demand potentially set to be impacted by any delays in restarting the plant following a July 15 fire, sources said.
