US OLEFINS
Prompt July ethylene prices remained virtually unchanged over the week. The market is still closely watching the timing of the return of the BASF/Total cracker to normal operations, which has been supporting ethylene prices despite ethane prices being close to an all-time low. Both grades of the June propylene contracts rose over the week. Ongoing turnarounds at BASF-Total's cracker and metathesis unit have been the primary reason behind higher spot propylene prices. US propylene stocks dropped slightly over the week, which also supported propylene prices. The market will watch for updated US propylene stocks at the US Energy Information Administration's weekly report Wednesday.
US POLYMERS
US polyethylene market participants looked to finalize domestic June contracts following the holiday-shortened week. Trade participants were divided on whether prices were flat to 3 cents down from May contracts. US polypropylene sources continued to discuss a margin erosion between polymer-grade propylene and PP, anticipating a possible 1-cent shrinkage for July. A disparity regarding the direction of spot PP pricing persisted, with some sources eyeing ample supply plus a soft market while others discussed robust demand and steady price increases.
LATIN POLYMERS
Brazilian polyethylene and polypropylene markets were expected to start the week slow because of a bank holiday in the state of Sao Paulo on Tuesday, which will affect most of the sector's operations. PE and PP have seen their CFR prices at low levels in the past weeks, driving domestic delivered prices down by Real200/mt last week, while local distributors expect a downtrend to continue in mid-July and fall another Real200/mt. Currency exchange is expected to be stable week on week. In Argentina, domestic prices were unchanged last week amid uncertainty in the local market after Dow Chemical's Bahia Blanca complex suffered an explosion in its ethylene cracker BB 2 plant in Dow Argentina at the end of June. Sources expect prices to move this week or the next. The 455,000 mt/year cracker incident is slightly affecting the distribution chain and the severity of the impact will depend on the period of stoppage, which is expected to last at least one more week.
US VINYLS
July pricing for US export polyvinyl chloride was expected to settle this week after protracted negotiations. Fresh producer offers last week were up $25/mt from June levels to range from $825-$835/mt FAS Houston to $850/mt FAS Houston, but market participants pushed back against proposed increases amid lackluster international demand. A producer decided Friday to not offer July volumes amid production issues that reduced export volume availability this month. Others had yet to settle talks that market sources described as a standoff. Offer levels Monday remained unchanged, while market participants pushed for lower pricing. In Asia, fresh August offers were expected to emerge this week amid expectations of a rollover with July or $10-$20/mt lower. The US domestic PVC market considered a 2-cent/lb price increase for June, which would restore pricing to March levels after prices fell 2 cents/lb in April, market sources said. Domestic demand did not seasonally rise in March and April as is typical because of prolonged winter weather and severe flooding in some regions. The delayed seasonal uptick emerged in May, prompting producers to announce the price increase.
US AROMATICS
US benzene prices were expected to remain flat to lower amid expectations of continued strength in imports. Sources noted that demand was steady but was unlikely to see significant improvement from the downstream styrene segment as prices continued to hover in the low-$900s/mt. Demand for toluene from the chemical segment was expected to remain subdued as conversion margins remained negative on the back of weaker paraxylene pricing. Toluene demand was likely to depend on the gasoline segment, particularly considering a recent spike that pushed blend values north of 270 cents/gal.
