London — Negotiations for settlement of the September contract for all olefins will begin this week.
OLEFINS
The Platts ethylene indicator for September currently shows a small Eur6 rise for the September contract.
The European propylene market is set to remain tight, with spot prices trading at a premium to the August contract price. Early expectations for the September contract price are at a small increase, as cracker maintenance picks up again in Europe.
Butadiene market participants in Europe are closely watching developments in the Asian market for indications of how export opportunities will develop.
POLYMERS
Among the polyethylene grades, the supply of high density PE is expected to remain tight compared to the other grades as the force majeure at Total's Gonfreville plant has not yet been lifted.
In downstream polypropylene, buying activity is expected to resume after August with several sources anticipating a possible increase in prices due to high feedstock costs.
Downstream polystyrene demand is expected to remain low. But an increasingly bullish outlook for September will strengthen sellers' positions.
The ABS market faces bearish price pressure from the arrival of Asian imports.
AROMATICS
Tightness in the styrene market is expected to persist with ongoing production problems in Europe. The arrival of imports will ease some pressure, but this will be counterbalanced by uncertainty around the problems.
European toluene prices are expected to remain at a premium to gasoline as firm demand from TDI and gasoline blending has supported premiums close to the $100/mt level. The relative oversupply in European benzene could be eaten into as traders look to take advantage of an open arbitrage to the US.
INTERMEDIATES AND OTHERS
Phthalic anhydride supply will remain tight on plant turnarounds in Europe. Producers Atmosa, Deza and Polynt are undergoing maintenance in August. There is steady demand in the European MTBE market, mainly from one producer.
The acetic acid price remains stable, while the VAM market is bearish. Low water levels on the Rhine continue to hamper activity in the European methanol market, further curbing activity that has already been reduced by the impact of the summer holiday period in Europe.
Meanwhile, in Russia, Metafrax's 1.2 million mt/year methanol plant in Gubakha is expected to come back online this week after a planned turnaround.
