US polypropylene
US polypropylene exports are expected to continue to trend downward in the short term amid improved availability, sources said.
The homopolymer assessment fell 13.5 cents/lb in the week ended April 24 amid talks of railcars available much lower for the period. S&P Global Platts assessed the homopolymer injection at $2,249-$2,271/mt April 23 on a FAS Houston basis. Ramp-ups by suppliers recovering from the February cold weather disruptions that hit the US Gulf Coast were expected to continue through the end of the month. Talks of normal production were expected to resume in June, sources said. Many buyers were still buying on allocations by producers. Despite the drop, participants deemed pricing too high to export to traditional import markets like Latin America amid competitive pricing from key global sellers. Still, there was talk that pricing would continue to dip on expected decreases in feedstock propylene contract price. Domestic market participants were eying a potential decrease as downstream contract settlements typically follow a monomer plus formula.
US olefins
US spot polymer-grade propylene is expected to continue rising in the week started April 25 on strong downstream polypropylene demand, sources said. April domestic PGP contracts are expected to settle in the week started April 25 between 10 and 16 cents lower.
US spot ethylene is expected to fall amid steam cracker restarts.
US vinyls
US spot export polyvinyl chloride prices were expected to remain at an all-time high of $1,800/mt FAS Houston in the week started April 25 as producers assess whether they will be able to offer volumes for May export. While all plants that shut amid sustained subfreezing temperatures in mid February have since restarted, turnarounds that were slightly delayed by the freeze shutdowns and more slated for May has kept output tight. Market participants do not expect output to resume normal levels until June. Upstream, caustic soda prices could inch up on growing demand in the pulp and paper industry as offices slowly reopen to workers, particularly in the US, with COVID-19 vaccinations becoming more available.
US aromatics
Benzene prices are expected to continue falling from the almost seven-year high of 503 cents/gal DDP USG reached April 20. While some sources said the decline in prices in the latter half of the week ended April 24 was simply a correction, the week of April 25 started with even lower spot ranges, including May benzene bid and offered at 410-485 cents/gal DDP HTC. May benzene had closed April 23 at 460 cents/gal DDP USG, up 35 cents on the week. Price movements through April 28 may prove influential in the settlement of the May CP, expected by the end of the week. May spot prices in recent weeks show the settlement should be sharply higher than the April CP of 301 cents/gal. Downstream, US styrene prices may see support from producers raising offers to account for higher feedstock prices as CP estimates clarify margins, as well as demand from Europe amid skyrocketing benzene costs in that region. May styrene closed April 23 at $1,520/mt FOB USG, up $50/mt on the week.
Stability is expected in the lower liquidity US aromatics markets of toluene and xylenes. While no spot trading was reported in the week of April 19-23, one market participant said the final days of April could usher in offers from producers who have otherwise been uncharacteristically quiet in the spot market since the mid-February Texas freeze derailed refining operations and supply chains. Sharp increases in benzene prices have improved economics for toluene disproportionation, allowing operators to increase STDP unit run rates, one trader said. Prompt nitration-grade toluene closed April 23 at 273 cents/gal FOB USG, up 3 cents week on week, while mixed xylenes gained 1 cent on the week at 249 cents/gal FOB USG.
US methanol, MTBE
US spot methanol prices are expected to strengthen in the week started April 25 ahead of May CP announcements, and with supply talked limited on lower production rates at two regional facilities. MTBE prices are expected to be stable to weaker on healthy regional supply driven by favorable production margins. Export activity remained uncertain, especially to Mexico and Latin America, on concerns surrounding a pandemic resurgence and its impact on demand.
Latin America
Latin polymers prices are expected to be lower in the week started April 25 for polyethylenes, driven by more material available in the market and lower Asian prices. Polypropylenes prices are also expected to be lower in the import markets of Brazil and West Coast South America, driven by offers from Asia and the Middle East. The Latin American region had been mostly relying on imports from Europe and Asia since early March as the US was having limited volumes for exports, which opened a window of opportunity for Asian markets to establish more competitive offers than the US.
The market was still divided on expectations if US prices, summed with freight, would be more competitive than Asian and European products. The US is generally the most important supplier of polyethylene for the region, while the Middle East and Asia are for polypropylene.
In Brazil, a local producer has not yet settled its pricing policy for May bookings, so the expectation is for flat prices for the week. All PE prices are already at all-time highs in Real and dollar basis.
Polypropylene prices are expected to fall for the week along with offers on the sea from Asia, while higher prices are seen especially from local producers in Latin America.
The PVC market in Latin America was seeing mixed expectations regarding prices. Most Latin American countries have poor demand at the moment, particularly Brazil. WCSA was seeing higher prices than Brazil, unusual for the market due to poor Brazilian demand. The situation should change as lockdown measures are softening in the country. In Mercosur, market participants expect new prices for May bookings. Distributors said prices would be steady until the turnover of the month. Availability was already sold out from most distributors. In Argentina, prices are at their all-time record highs and expected to change only for May bookings.
