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© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 2
POLYMERSCAN october 26, 2016
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 3
POLYMERSCAN october 26, 2016
Polymers
Polyvinyl Chloride and up 1.5 cents from September. Producers are pushing for a 4-cent
increase in October, but that will likely prove difficult to implement
given expectations for lower demand in Q4 and softer spot ethylene
Europe
prices compared to mid-September. Market sources said 1-2 cents was
EU prices up as Turkish, Asian prices rise
likely to be implemented. Industry data released late last week by the
Tepid EU demand chokes price increases
American Chemistry Council showed North American PVC production
in September exceeded total sales, leading to a build in stocks similar
European polyvinyl chloride spot prices were up Eur5/mt on the week to that notched in August. Production in September totaled almost 1.29
to Eur820/mt FD NWE, supported by gains in Turkey and Asia. Asian billion lb, while total sales and captive use were at almost 1.24 billion lb,
PVC was assessed at $930/mt CFR China Wednesday, up $10/mt week down 6% month on month, but 3.4% higher than the year-ago month.
on week. Meanwhile, European offers into Turkey were inching toward The ACC data would suggest a 48.7 million lb build in stocks during
$900/mt CFR Turkey. “PVC demand is better [than other polymers],” a September. Upstream, spot ethylene prices continued to move lower,
Turkish source said. Meanwhile, upstream, Platts ethylene contract with the prompt month last assessed Tuesday at 26.25 cents/lb FD
price indicator for November was assessed at Eur979.50/mt FD NWE, USG, a drop of 4.5 cents from last Wednesday. Market sources have
compared with the industry settlement in October at Eur940/mt, pointed to healthy availability as turnarounds come to an end and as
reflecting feedstock increase. Also, caustic soda FOB Rotterdam prices some sellers work to reduce inventories before the end of the year.
were up $5/mt on the week to $385/mt, amid ongoing tightness.
Recent industry data has shown a fall in stocks in Europe, according to Rationale
Euro Chlor. At 207,961 mt, August caustic soda stocks were 37,255 mt US export PVC on a three- to 30-day basis was assessed Wednesday at
below the level of August 2015 (245,216 mt). “We sold two vessels at $770-$780 FAS Houston, up $5/mt week on week, based on pricing
$410/mt FOB Med and the market remains tight,” a caustic soda indications at that level from multiple market participants. October
producer said. However, a trade source said that he expected PVC spot domestic prices were assessed at 44-46 cents/lb rail car, up a half
prices in Europe to remain stable at Eur810-830/mt FD NWE, amid cent for the week and up 1.5 cents from September, based on pricing
lukewarm demand. indications and expectations from market sources that 1-2 cents of an
announced 4-cent increase would pass through.
Rationale
PVC spot prices were up Eur5/mt on the week assessed within the
Asia
range heard at Eur810-830/mt FD NWE, at Eur820/mt FD NWE. The
increase came amid global bullishness. Turkish PVC prices were Buyers accept $40/mt price hike for Nov
assessed at $890/mt CFR Turkey, up $20/mt on the week, below the Dec offers may be increased by $10/mt
most repeatable offer heard at $900/mt CFR Turkey (ex-Europe). PVC
net contract prices were steady on the week at Eur852.50/mt FD NWE. The Asian PVC market continued to firm this week, with spot prices
No fresh prices were heard to disprove the price. jumping $10-$20/mt from the previous week to stay at two-year high
levels. End-users were heard to have accepted a $40/mt price increase for
November cargoes compared to October, at $930/mt CFR China and
United States
$990/mt CFR India. For November cargoes, buyers had initially resisted the
Producers seek increases for Nov exports
$40/mt price increase, which was announced last Monday, amid seasonal
Domestic contracts talked higher for Oct
demand lull. But they accepted the increase later last week in order to
cover limited supplies from China. The local China market continued to
US export polyvinyl chloride prices were assessed Wednesday at $770- firm, with carbide-based PVC rising Yuan 10/mt week on week to be
$780/mt FAS Houston, up $5/mt week on week, as pricing was talked assessed at Yuan 7,050/mt, while ethylene-based PVC was assessed
stable to slightly higher. At least two producers have nominated stable at Yuan 7,500/mt over the same period. In India, some market
November pricing $50/mt higher, which would call for producer-to- sources expected local prices to increase next week. Looking forward,
trader pricing levels at around $800/mt FAS Houston, market sources Asian PVC producers are likely to raise offers for December cargoes by
said. November expectations had ranged from a rollover of the $750- $10/mt in line with the stronger domestic markets in China and India,
$765/mt levels seen for early October to prices closer to $800/mt. sources said. In statistics news, China’s PVC imports fell 5.9% from a
Pushing through the entire increase could be difficult, according to month earlier to 44,796 mt in September, data released Tuesday by the
market sources. The sources said that while such pricing was General Administration of Customs showed. From a year earlier, China’s
workable to some regions — particularly Asia — most key export September PVC imports marked a 21.7% decline. Meanwhile, China’s PVC
destinations for US sellers would not accept pricing at that level with exports fell 42.4% from a month earlier to 82,002 mt in September, and
demand slower. A trader source suggest that US PVC would be were up 40.7% from a year earlier. In plant news, Japan’s Taiyo Vinyl plans
uncompetitive into South America’s West Coast, Africa and the Middle to shut its 310,000 mt/year PVC plant in Yokkaichi in March-April 2017 for
East at nominated prices levels. In the domestic market, PVC contracts annual maintenance, a company source said Tuesday. The shutdown
were assessed at 44-46 cents/lb rail car, up 0.5 cent week on week period will be more than one month, the source said.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 4
POLYMERSCAN october 26, 2016
Rationale Settlements had been reported at flat from September through the third
Asian PVC was assessed at $930/mt CFR China Wednesday, up $10/mt and last week of October. Buyers unanimously reasoned a rollover price
week on week. Taiwan-origin cargoes were heard traded within a had been achieved on poor demand, despite producers having to bear an
range of $920-$930/mt CFR China, while South Korea-origin cargoes increase of Eur15/mt in feedstock costs. The market now looks towards
were heard traded at $930-$940/mt CFR China. The CFR Southeast November where a growing consensus is heard around expectations of
Asia PVC marker was assessed up $10/mt from the previous week, at rollover pricing that month, if the anticipated increase in ethylene costs
$930/mt Wednesday, with deal done levels heard at $930-$940/mt for November proves true. “I expect next month to see an increase in
CFR SEA. The CFR India PVC marker rose $20/mt week on week to be ethylene costs equal the margin loss from producers,” a converter source
assessed at $990/mt Wednesday. Deals were reported to have been said, arguing this on the likely continuation of low demand. Platts
done at $990-$995/mt CFR India this week. ethylene contract price indicator for November showed an increase of
Eur41/mt above the industry CP of Eur940/mt for October. Prospects for
ethylene have turned bullish amid increases in its primary feedstock in
Latin America
Europe, naphtha. Spot prices of naphtha cargoes were assessed at
Firming global prices pressure market
$448.75/mt CIF NWE Tuesday, up $26.75/mt from the start of October.
Brazil sees some encouraging economic signs
The NWE ethylene CP for the is typically settled by the industry in the final
week of the preceding month. LDPE spot prices showed little change on
Polyvinyl chloride import pricing firmed in Latin America’s key import the week, with indications given at Eur1,170-1,250/mt for delivery in
regions, with prices rising $10/mt in both Brazil and along the West Northwest Europe. S&P Global Platts assessed prices at the most
Coast of South America, tracking gains in global pricing, sources said. repeated value of Eur1,250/mt FD NWE, flat on the week. Spot prices had
The import assessment was at $830-$840/mt CFR WCSA on maintained strength in October despite weakened fundamentals. Trade
Wednesday, up $10/mt week on week as market participants talked sources said that imports into Europe were slowing as demand from Asia
pricing in between $830-$850/mt CFR. Demand has been heard low, had risen. One converter source said he was expecting to receive LDPE
with buyers slower to accept higher pricing so far this month, sources from Iran this month but the delivery had been rerouted to Asia after
said, but with US-based pricing talked steady to firmer and Asian departure for Europe in search of higher profits. “Imports were at a high
markets also moving up, those in need of product had few low-price level [in Europe] earlier this month but imports are now even being turned
options. US-based sources noted that Latin America was providing around for Asia,” the converter source said of LDPE. Further thwarting
lower netbacks than other regions, leaving little room for profit or imports was the effect of a weakening euro, which made dollar-based
negotiation compared to FAS Houston pricing. In Brazil, the import PVC imports more expensive. The euro had closed at a low of 1.0891 against
price gained $10/mt to $845-$855/mt CFR basis as multiple market the dollar last week, a value not seen lower since the beginning of March
participants talked pricing around $850/mt CFR. Demand in Brazil this year. “Imports are more expensive so more interest is being seen in
continued to heard low, but sources in the region said the mood of domestic product,” a trade source said, adding this did not mean
buyers regarding the economy continued to improve, which could be a European prices would rise as poor demand prevented that. In production
sign of stronger buying moving forward. news, Ineos’ steam cracker in Rafnes, Norway, is expected to begin
producing olefins again at the end of November, a source close to the
Rationale company said on Wednesday. An outage at the cracker is not impacting
CFR WCSA: The import assessment was $10/mt higher week on week the connecting 140,000 mt/year LDPE plant. Ethylene is being sourced
at $830-$840/mt CFR WCSA, based on pricing indications at $830- externally, the source said.
$850/mt with the assessment coming closer to the low end to account
for weak demand. CFR Brazil: The price increased $10/mt on the week, Rationale
assessed at $845-$855/mt CFR basis on Wednesday, based on pricing European low density polyethylene spot prices were assessed at
indications at $850/mt CFR Brazil. Eur1,250/mt FD NWE Wednesday, flat on the week. Prices were
assessed within an indicated range of Eur1,170-1,250/mt FD NWE.
Contract prices were assessed flat on the month at Eur1,460/mt FD
Low Density Polyethylene NWE. The assessment was made following the vast majority of
settlements heard at rollover.
Europe
United States
Expectations for November mirror October market
Imports drop off as demand from Asia increases
Oct domestic contracts rolling over
LDPE stocks decrease in Sept: ACC
Northwest European low density polyethylene contract prices were
assessed at Eur1,460/mt FD Wednesday, concluding the month of US low-density polyethylene export prices were assessed Wednesday
October at a rollover on September prices. “We achieved a rollover this at $1,323-$1,345/mt (60-61 cents/lb) FAS Houston, down $22/mt week
month on contract prices,” a mid-sized converter of LDPE said. on week, as market sources said availability seemed to be improving in
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 5
POLYMERSCAN october 26, 2016
the long-tight market, and as a result, some lower priced spot resin $1,280/mt CFR Far East Asia, stable on the day and up $30/mt week on
was being seen. Rail car pricing indications — where available — were week. Market sources talked the market in the $1,280-$1,290/mt
heard in the high 50s cents/lb range for bulk pricing from producers to range, with offers heard at $1,300-$1,320/mt CFR basis. One market
traders. Wednesday’s assessment was the lowest since August 18 participant said greenhouse agricultural film demand was lending
when it was assessed at $1,312/mt FAS Houston, according to S&P support to prices. The China domestic assessment rose Yuan 250/mt
Global Platts data. Market sources indicated that US prices would still to Yuan 11,500/mt, illustrating the uptick in demand, sources said. A
need to move lower to be competitive to most regions, but were source with a major global producer cautioned that the recent
encouraged by the cheaper pricing being seen. There were growing increases were the result of short-term tightness in the market
expectations among traders that PE prices could trend lower in the stemming from unplanned outages and not so much demand, and
coming month as export activity typically increases at the end of the expected prices to soften to end the year. Southeast Asia pricing was
year and producers could look more aggressively to the export market nominally stronger on the week, up $10/mt to $1,260/mt CFR basis,
to manage inventories as domestic buyers seek price relief throughout tracking the upward movement in China, but with the market talked in
Q4. October LDPE domestic contracts were assessed stable at 76-77 a wide margin. A trader source in Vietnam described the market as
cents/lb ($1,675-$1,698/mt) for delivered rail cars based pricing was “wait and see” in terms of overall demand, with sentiment driving
heard rolling over for October. Buyers are expected to push for prices. In India, demand was subdued this week ahead of the Diwali
decreases in November and December, sources said, and there were holiday, with sources describing demand as stable but supply as long.
growing calls for prices to fall by 2-3 cents/lb in the coming months.
Some sources suggested a decrease of 5 cents/lb could be warranted Rationale
by the end of 2016, particularly with demand expected to slow at the CFR FAR EAST ASIA: Film-grade was assessed up $30/mt week on
end of the year and new capacity set to come on over the next few week at $1,280/mt Wednesday, based on tradable indications at
months in addition to the new polyethylene already being produced in $1,280-$1,290/mt. Domestic China: Film-grade was assessed up Yuan
Mexico. Sources also have pointed to slower demand in October 250/mt at Yuan 11,500/mt ex-works, based on offers talked at Yuan
compared to previous months. Data released Tuesday by the American 12,000-13,000/mt and indications of stronger demand. CFR
Chemistry Council showed PE stock in the US and Canada decreased SOUTHEAST ASIA: Film-grade was assessed at $1,260/mt, up $10/mt
almost 2.8% in September as slower sales were offset by a cutback in week on week, based on an offer at $1,300/mt CFR basis and the
production. LDPE inventories were at 795 million lb for September, a uptrend in CFR Far East Asia pricing.
2.4% drop from August. Total PE sales were at more than 3.36 billion
lb, down 8.4% from the previous month, while production was at more
Latin America
than 3.2 billion lb, down 4.5% from the previous month. Upstream,
spot ethylene prices continued to move lower, with the prompt month Asia pricing, freight deemed too high: sources
assessed Wednesday at 27 cents/lb FD USG, a drop of 3.75 cents from Consumer confidence rising in Brazil: sources
last Wednesday. Market sources have pointed to healthy availability as
turnarounds come to an end and some sellers working to lower Low-density polyethylene pricing for markets on the Pacific Coast of
inventories before the end of the year. South America fell for the week, assessed $25/mt lower Wednesday at
$1,355-$1,365/mt CFR West Coast South America basis, amid lower
Rationale pricing from the United States. Demand was heard to be low along the
US LDPE export prices were assessed Wednesday at $1,323-$1,345/mt West Coast, with local distributors said to be dropping prices to
(60-61 cents/lb) FAS Houston, down $22/mt week on week, based on facilitate moving product, a market source said. In Brazil, LDPE pricing
rail car pricing indications from producers to traders at 57-58 cents/lb. also dropped Wednesday, down $30/mt for the week to $1,335-1,345/
The assessment factors in packaging and transportation to port costs mt CFR basis, based on lower pricing from the US. Market sources
of around 3 cents/lb ($66/mt) on top of bulk rail car prices, per market pointed to a stronger Real and improved public confidence following
feedback. October domestic LDPE contract prices were assessed at recent political turmoil with helping drive up demand. Sources also said
76-77 cents/lb ($1,675-$1,698/mt) for delivered rail cars, steady week end users have ramped up production in recent days and weeks ahead
on week, based on pricing indications from market sources as October of the Christmas season, which in turn is also improving demand, both
domestic pricing was heard settling flat. domestically and on the import market. In addition, market sources
have been citing local producer Braskem’s November shutdown of one
of its steam crackers at Camacari with leading to more import
Asia
demand. The Brazilian export assessment remained flat at $1,515-
Import pricing up $30/mt on week
$1,525/mt FOT Brazil, based on Brazil-origin offers of $1,640/mt CPT
Increases could be shortlived: producer source
Paraguay. The assessment deducts $100/mt for freight and $20/mt for
negotiation. Sources on both sides of the continent also said pricing
Low-density polyethylene assessments rose $10-$30/mt in Asia this from Asia has been on the rise, as well as shipping rates from the
week, pulled higher by stronger demand for film grades in China, region, making material from the Far East less attractive when
sources said this week. Film grade was assessed Wednesday at compared with the US and its falling prices.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 6
POLYMERSCAN october 26, 2016
Rationale Rationale
CFR WCSA: LDPE fell $25/mt on the week to $1,355-$1,365/mt CFR European LLDPE spot prices were assessed down Eur10/mt on the
basis, based on US-origin offers of $1,380/mt CFR Peru. The week at Eur1,180/mt FD NWE Wednesday. Indicated prices were heard
assessment was made $20/mt below the offer level to account for at Eur1,100-1,190/mt FD NWE. Platts assessed within the range, moving
negotiation. CFR Brazil: LDPE dropped $30/mt to $1,335-1,345/mt CFR down on very competitive import offers and good European availability.
basis, based on trading levels for US-origin material talked at $1,335- The contract price for October was assessed flat on the month at
1,345/mt CFR Brazil. The assessment was made at the trading levels. Eur1,400/mt FD NWE. Settlements were heard at a rollover from prices
FOT Brazil: LDPE was flat at $1,515-$1,525/mt FOT Brazil, based on in September or even a few euros below this week. Platts assessed in
Brazil-origin offers of $1,640/mt CPT Paraguay. The assessment line with the most repeatable settlement heard for a mid-sized
deducts $100/mt for freight and $20/mt for negotiation. converter of rollover.
United States
Linear Low Density Polyethylene
FAS butene prices reach six-month low
October contracts rolling over
Europe
LLDPE weakest of major polyethylene grades
US linear low-density FAS Houston assessments fell $22-$44/mt week
Imports continue to be heard competitive on LLDPE
on week as market participants were seeing lower pricing levels amid
signs of increased availability for exporters. Butene export prices were
Northwest European linear low density polyethylene contract prices assessed Wednesday at $1,157-$1,179/mt (52.5-53.5 cents/lb) FAS
were assessed flat from September concluding the month of October Houston, down $33/mt week on week, as rail car pricing indications
at Eur1,400/mt FD Wednesday. The majority of LLDPE settlements were heard in the low 50s cents/lb range to traders. The butene
had been reported at a standstill from September prices throughout assessment is the lowest since April 11, according to S&P Global Platts
this month, these were confirmed by more settlements at the same data. LLDPE hexene was down $22/mt week on week, assessed at
level in the last week of October. LLDPE had been reported as the $1,168-$1,190/mt (53-54 cents/lb) FAS Houston, as pricing was talked
weakest of major polyethylene grades this month allowing some on par to slightly above butene. Metallocene was assessed at $1,213-
buyers with a great deal of purchasing power to achieve prices at $1,235/mt (55-56 cents/lb) FAS Houston, down $44/mt week on
discounts from last month. “Prices downwards of a rollover are week,as rail car pricing was talked around 52-54 cents/lb. Even with
possible on LLDPE,” a large converter source said. Producer costs prices moving lower, some trader sources were heard hesitant to take
had increased Eur15/mt this month on feedstock ethylene, a rollover positions as there were expectations for further decreases in the
in pricing has therefore impacted their profit margins. NWE LLDPE coming month. Export prices traditionally move lower in November and
spot prices weakened Eur10/mt this week on availability outweighing December as US producers attempt to decrease inventory before the
demand. LLDPE C4 blown film spot prices were assessed at Eur1,180/ end of the year. Sources also suggested that continued decline in
mt FD NWE Wednesday. Unlike other major PE grades, LLDPE prices domestic demand could also free up more resin for export. Domestic
continued to be heard under pressure from imports. “Import offers contract prices were assessed for October at 64-65 cents/lb for
on LLDPE are as low as Eur1,100/mt on C4 from the Middle East, they delivered rail cars, stable from September levels, as prices were heard
are still available and cheap this week,” a converter source said. settling flat for the month. There was growing talk among buyers that
Unlike low density PE, LLDPE imports to Europe were not pulled away there would be a push for lower pricing in November, with sources
by price rises in Asia as LLDPE prices in that continent softened. suggesting a 2-3 cent decrease was possible based on weaker
LLDPE assessments in Asia were stable to lower this week, with spot demand and declining feedstock ethylene pricing. Some market
pricing down as much as $30/mt for some LLDPE grades this week. sources have suggested a decrease of up to 5 cents/lb could be
PE imports into Europe will continue to grow to fulfill market demand warranted by the end of 2016, particularly given some of the new
requirements and in the absence of sufficient domestic supplies, capacity that was expected to be on line in the coming months. Data
Ahmad Al-Saleh, polyethylene business director at Kuwait’s Equate released Tuesday by the American Chemistry Council showed PE
Petrochemical Company and president of Equate Marketing stocks in the US and Canada decreased almost 2.8% in September as
Company, told S&P Global Platts in an interview at the K Fair slower sales were offset by a cutback in production. LLDPE inventories
conference in Dusseldorf. “The European processing industry has fell 10% to almost 1.2 billion lb. Total PE sales were at more than 3.36
been a progressive sector in multiple applications with strong focus billion lb, down 8.4% from the previous month, while production was at
on film extrusion for flexible and rigid packaging. As such, butene more than 3.2 billion lb, down 4.5% from the previous month.
linear low density PE, high density PE film and blow molding have Upstream, spot ethylene prices continued to move lower, with the
witnessed a healthy growth trend historically,” Al-Saleh said. In the prompt month last assessed Tuesday at 26.25 cents/lb FD USG, a drop
first eight months of the year, the EU imported 2.2 million mt of PE, of 4.5 cents from last Wednesday. Market sources have pointed to
up 31% on the year. The bloc imported 48,895 mt of PE from Kuwait, healthy availability as turnarounds come to an end and some sellers
compared with 12,979 mt in the same period last year. working to lower inventories before the end of the year.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 7
POLYMERSCAN october 26, 2016
Rationale
CFR Far East Asia: Butene-grade was assessed at $1,130/mt, down High-Density Polyethylene
$30/mt week on week, based on trading indications at that level.
Metallocene was assessed at $1,330/mt, down $30/mt, maintaining a
Europe
$200/mt premium. China’s domestic butene grade price was Yuan
9,450/mt, down Yuan 250/mt week on week, and Yuan 50/mt below the Bullish ethylene expectations prevent cheaper HDPE
lowest offer at Yuan 9,500/mt to account for negotiation. CFR November expected to be a repeat of October
Southeast Asia: Butene-grade was assessed flat week on week at
$1,180/mt, based on offers at $1,200/mt and discounted $20/mt for Northwest European high density polyethylene, injection grade, contract
negotiation. Metallocene was assessed at $1,380/mt. CFR South Asia: prices were assessed flat from September concluding October at Eur1,400/
Butene-grade was assessed at $1,190/mt, down $10/mt week on week, mt FD. All grades of HDPE assessed by S&P Global Platts followed injection
based on trading indications at that level. Metallocene fell $10/mt to to be assessed at a rollover from September. The majority of market
$1,390/mt. CORRECTION: The rationale published October 19 should participants said demand had outweighed supply this month across the
give the increase as $30/mt: The CFR South Asia market was assessed HDPE market. HDPE blow molding however may have been different
up $30/mt at $1,200/mt, based on tradable indications heard at depending on buyer location in Europe, with the Benelux region reported
$1,200-$1,210/mt CFR South Asia. tight. “The exception [to rollover on other HDPE grades] is HDPE blow
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 8
POLYMERSCAN october 26, 2016
molding where we recovered monomer,” a producer source said. Looking pulled up bullish Turkish market. HDPE CFR Turkey was assessed at
ahead current supply-demand fundamentals were expected to carry $1,154/mt, up $6/mt on the week, assessed at the trade heard at $1,120/
forward to November. “November should be a repeat of this month,” a mt CFR Turkey subject to 3% duty (Ex Uzbekistan). LLDPE CFR Turkey
source at a large converter said. As in October, feedstock ethylene is was assessed at $1,212/mt, up $32/mt on the week, below Middle East
expected to increase next month. Platts ethylene contract price indicator offers at $1,130-1,140/mt CFR, tracking gains in other PE grades.
for November showed an increase of Eur41/mt above the industry CP of
Eur940/mt for October. Expectations for ethylene have turned bullish amid
United States
increases in its primary feedstock in Europe, naphtha. PE prices, on typical
behavior by producers to destock towards the end of the year, should not Availability heard improving
follow increased feedstock costs in November, sources said. “Some things October contracts roll over
never change. Producers are not going to keep stocks and let that hit their
balance sheet,” a trader source said. Looking to next year, security of US high density polyethylene FAS Houston assessments moved $33-
polyethylene supply in 2017 will remain a significant concern for customers $44/mt lower on the week, with sources saying pricing had moved
and is expected to boost purchasing as it did in the first half of 2016, lower as more product was becoming available for export. HDPE
European PE producers said this week. The effect of an unprecedented blowmolding was assessed at $1,080-$1,102/mt (49-50 cents/lb) FAS
number of PE plant outages in the summer of 2015 has lasted till now, Houston, down $44/mt week on week. HDPE injection was assessed at
encouraging buyers to purchase more ahead of summer this year and was $1,080-$1,102/mt (49-50 cents/lb) FAS Houston, down $33/mt on the
expected to do the same next year, producers have said. European HDPE week. HDPE HMW film was assessed at $1,102-$1,124/mt (50-51 cents/
spot prices were assessed at Eur1,200/mt FD NWE for injection grades lb) FAS Houston, down $33/mt week on week. Assessments for HDPE
Wednesday, flat on the week. “People are looking at ethylene expectations export resin are at the lowest level since the summer, with the
to increase so prices shouldn’t be falling,” a trader source said. blowmolding assessment at the lowest point since August 1, injection
at its lowest level since July 20 and HDPE HMW film at its lowest level
Rationale since June 1, according to S&P Global Platts data. Lower prices had
European high density polyethylene spot prices were assessed at been expected as market participants have said more HDPE resins
Eur1,200/mt FD NWE for injection grades Wednesday, flat on the week. have become available for export, with some possibly due to lower
Blow molding prices were also assessed flat at Eur1,200/mt FD NWE. domestic demand, sources said. Domestic contracts were assessed
Film prices were assessed at Eur1,190/mt, flat on the week. Prices were stable for October at 66-67 cents/lb ($1,455-$1,477/mt) delivered rail
indicated as stable: subdued demand had not pulled down prices on car basis for blowmolding, 66-67 cents/lb ($1,455-$1,477/mt) for
bullish feedstock expectations. Contract prices were assessed flat on injection and 69-70 cents/lb ($1,521-$1,543/mt) for HMW film. Contracts
the month at Eur1,400/mt FD NWE. Settlements had been heard at a were heard rolling over for the month as buyers were expected to push
rollover from September pricing or higher for blow molding in Benelux for decreases in November and December, sources said. There were
only. S&P Global Platts priced in line with the most repeated settlement growing calls for prices to fall by 2-3 cents/lb in the coming months,
of a rollover on all assessed grades of HDPE. though some sources also have suggested producers could turn to the
export market in an attempt to manage inventories and potentially
push off decreases until Q1. Data released Tuesday by the American
Africa & Turkey
Chemistry Council showed PE stock in the US and Canada decreased
Petkim raises LDPE list prices
almost 2.8% in September as slower sales were offset by a cutback in
Asian LDPE prices up on film demand
production. HDPE inventories, however, were up 4% at almost 1.39
billion lb. Total PE sales were at more than 3.36 billion lb, down 8.4%
Low density polyethylene prices were were up in Turkey, following an from the previous month, while production was at more than 3.2 billion
increase in Asian prices. Turkish prices were $1,257/mt CFR, up $11/mt lb, down 4.5% from the previous month. Upstream, spot ethylene
on the week. Turkey’s Petkim has increased the list prices of LDPE, prices continued to move lower, with the prompt month last assessed
PVC and PP by $15/mt amid rising prices in Asia, a source close to Tuesday at 26.25 cents/lb FD USG, a drop of 4.5 cents from last
company said. “Turkey’s prices are low compared to Asia so there is Wednesday. Market sources have pointed to healthy availability as
potential upside to prices. Offers [from the Middle East, Europe etc] are turnarounds come to an end and some sellers working to lower
limited because of the lower netback as Asian prices are higher,” he inventories before the end of the year.
said. In the high density PE market, Uzbekistan’s HDPE plant had
restarted following a maintenance. Uzbek product was heard changing Rationale
hands at $1,120/mt CFR Turkey. The blowmolding export price was assessed at $1,080-$1,102/mt (49-50
cents/lb) FAS Houston, down $44/mt week on week, based on rail car
Rationale indications of 46-47 cents/lb. The assessment factors in packaging and
LDPE Turkish prices were up $1,257/mt CFR, up $11/mt on the week. SP transportation to port costs of around 3 cents/lb ($66/mt) on top of bulk rail
Global Platts assessed at peg at $1,180/mt CFR Turkey, subject to 6.5%. car prices, per market feedback. Injection was assessed at $1,080-$1,102/
CFR North Africa was assessed at $1,210/mt up $10/mt on the week, mt (49-50 cents/lb) FAS Houston, down $33/mt on the week, based on rail
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 9
POLYMERSCAN october 26, 2016
car pricing indications at 46-47 cents/lb. HDPE HMW film was assessed at termed poor demand and excess local supply. Film was assessed at
$1,102-$1,124/mt (50-51 cents/lb) FAS Houston, down $33/mt week on $1,190-$1,200/mt CFR basis; injection was assessed at $1,185-$1,195/
week, based on pricing indications at 47-48 cents/lb for bulk rail car pricing. mt CFR basis; and blowmolding was assessed at $1,215-$1,225/mt.
October domestic contracts were assessed at 66-67 cents/lb ($1,455- Local sources said market activity has been minimal over the past
$1,477/mt) delivered rail car basis for blowmolding, 66-67 cents/lb ($1,455- week and regional distributors have reduced prices offered to end
$1,477/mt) for injection and 69-70 cents/lb ($1,521-$1,543/mt) for HMW film. users as a means of facilitating deals and moving product ahead of
Domestic assessments were stable week on week based on pricing the close of the month. With US pricing heard moving lower, there
indications from market sources as October pricing was heard rolling over. were expectations that import pricing to the region could drop.
Sources on both sides of the continent also said offers from Asia
has been on the rise, as well as shipping rates from that region,
Asia
making material from the Far East less attractive when compared
Film falls $30/mt in SE Asia on Mid East offers
with the US and its lower prices. In Brazil, all three grades of HDPE
India market bearish on oversupply, holiday
were flat on the week Wednesday, with injection at $1,205-$1,215/mt
CFR basis; film at $1,220-$1,230/mt CFR basis; and blowmolding at
High-density polyethylene pricing was stable to lower in Asian markets $1,200-$1,210/mt CFR basis, all based on trading levels for Middle
this week, with firm pricing seen in China and slowing demand in India East-origin material. Market sources in the region said demand has
ahead of the Diwali holiday. Film-grade was assessed Wednesday at been improving, both on a seasonal front and due to improved
$1,150/mt CFR Far East Asia, stable week on week and maintaining a $10/ consumer confidence following recent political turmoil. US and
mt premium over blowmolding and injection grades. Market participants Middle East material was deemed the most competitive into Brazil.
described the China market as firm, but noted that bids for deepsea In the Brazilian export market, HDPE injection was flat for the week,
cargo were on low side, which could suggest weakness ahead. In assessed Wednesday at $1,275-$1,285/mt FOT Brazil, based on
Southeast Asia, pricing was stable to lower, pressured lower by Middle offers of $1,400/mt CPT Paraguay for Brazil-origin material. HDPE
East-origin material, sources said. Film-grade was assessed down $30/ film was stable at $1,305-$1,315/mt FOT basis, based on offers out of
mt week on week at $1,130/mt CFR Southeast Asia. Blowmolding and Brazil of $1,430/mt CPT Paraguay. Blowmolding was flat at $1,270-
injection grades fell $10/mt each to $1,140/mt CFR basis, while yarn was $1,280/mt FOT basis, based on Brazil-origin offers at $1,395/mt CPT
stable at $1,170/mt after a seller said business was being conducted at Paraguay. The FOT assessments subtract freight costs estimated at
those levels, if slowly. A trader source in Vietnam described the market as $100/mt, as well as $20/mt for negotiation, per market feedback.
“wait and see” in terms of demand, with sentiment driving prices. In
India, HD grades fell $10/mt week on week to $1,160/mt CFR South Asia, Rationale
with sources describing the market as slowing ahead of the Diwali CFR WCSA: Injection-grade HDPE was assessed down $10/mt at $1,185-
holiday over the weekend. Buyers were subscribing to just-in-time $1,195/mt CFR basis. HDPE film was assessed down $10/mt at $1,190-
inventory management, sources said. Another source said oversupply in $1,200/mt CFR basis. Blowmolding was down $10/mt at $1,215-$1,225/
the market was leading to bearish sentiment ahead of the holiday. mt. No firm bids, offers or deals were heard Wednesday. In the absence
of firm pricing indications, assessments were $10/mt lower to account
Rationale for weak demand and expectations of lower pricing for US-origin resin.
CFR Far East Asia: Film-grade was assessed at $1,150/mt Wednesday, CFR Brazil: Injection-grade HDPE was flat at $1,205-$1,215/mt CFR,
stable week on week. The assessment was based on the lower end of based on Middle East-origin trading levels of $1,205-$1,215/mt CFR
trading indications at $1,150-$1,160/mt. Domestic China: The Brazil. HDPE film was stable at $1,220-$1,230/mt CFR, based on Middle
assessment at Yuan 9,700/mt ex-works was based on offers at Yuan East-origin trading levels of $1,220-$1,230/mt CFR Brazil. Blowmolding
9,800/mt and discounted Yuan 100/mt for negotiation. CFR Southeast was flat at $1,200-$1,210/mt CFR, based on Middle East-origin trading
Asia: Film-grade was assessed at $1,130/mt, down $30/mt week on levels of $1,200-$1,210/mt CFR Brazil. The assessments were all made
week. The assessment was based on trading indications at $1,130/mt at their respective trading levels.
CFR Vietnam. CFR South Asia: Film-grade was assessed at $1,160/mt,
down $10/mt week on week. The assessment was based on trading
indications at $1,150-$1,160/mt CFR basis. Polypropylene
High-density polyethylene import assessments along the West European homo injection polypropylene contract prices were
Coast of South America were each down $10/mt for the week, as assessed at Eur1,185/mt FD NWE on Wednesday, up Eur35 since the
lower pricing from the US helped offset what regional sources beginning of October on gains in the monomer contract, while spot
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 10
POLYMERSCAN october 26, 2016
Rationale Rationale
EU PP contract prices were assessed at Eur1,185/mt FD NWE US spot export pricing was assessed Wednesday at $1,025-$1,047/mt
Wednesday, up Eur35 since the beginning of October, and (46.5-47.5 cents/lb) FAS Houston for homopolymer injection grades,
replicating the Eur35/mt gain seen in propylene. Spot homo down $11/mt for the week, based on weaker demand and rail-car
injection prices were assessed at Eur1,030/mt FD NWE, flat on the pricing at 44-45 cents/lb FOB Houston and accounting for bagging and
week. The most competitive indications were found at Eur1,020- transportation-to-port costs totaling an additional 3 cents/lb ($66/mt).
1,050/mt FD NWE, with the full range of indications from Eur980- Co-polymer spot for export was assessed $11/mt lower for the week at
1,100/mt. Platts assessed at Eur1,030/mt, which was seen to be $1,124-$1,146/mt (51-52 cents/lb) FAS Houston, maintaining the 3.5
the most repeatable level. cent premium over homopolymer. Domestic contract pricing was
assessed 0.25 cent lower at 60.75-61.75 cents/lb rail car for
homopolymer injection grade and at 62.75-63.75 cents/lb for
Africa & Turkey
homopolymer fiber grade on expectations of a 0.5-1 cent/lb decrease
Nov stability expected
settlement from September pricing. The fiber-grade assessment was
Korean offers heard in W.Africa
assessed at a 2-cent/lb premium to homopolymer injection grades.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 11
POLYMERSCAN october 26, 2016
Wednesday, surging Yuan 298/mt week on week. “Investment money was talked at $1,090-$1,100/mt level. Copolymer grade was also stable
has been flowing out of the Chinese housing and stock markets and at $1,140-$1,150/mt CFR basis, maintaining the $50/mt premium to
into commodity futures recently. The price upswing we’ve seen on the homopolymer. Offer levels were generally talked at $1,120-$1,150/mt
DCE this week is a reflection of [this],” a trader said, adding that “the range from regions as varied as Asia, the Middle East and regionally
government has been taking measures to cool the housing market.” from Chile and Colombia. One US-based trader said the market should
Domestic China spot price reacted to the higher futures prices, rising be at $1,140/mt but that buyers were not responding. Still, some sellers
Yuan 200/mt week on week to Yuan 8,250/mt, or up $20/mt at $978/ said selling at $1,110/mt could be considered the floor. Talk of US-origin
mt on an import parity basis. Deals were heard done at $1,020/mt on a exports to the region were heard diminishing as US offers to traders
CFR basis highlighting the bullish buying sentiment this week, traders firmed up and domestic demand limited export availability. In Brazil,
said. The CFR Southeast Asia PP raffia marker was assessed up $15/mt talk of a spur in demand continued this week with participants noting
week on week at $1,040/mt Wednesday, after Saudi Aramco offered a higher levels accepted in the region. The import assessment was up
cargo into Vietnam at $1,050/mt CFR SEA. Offers for South Korea- $20/mt week on week to $1,115-$1,125/mt CFR Brazil for homopolymer
origin cargoes were at a similar level on CFR SEA basis. But end-users and $5/mt to $1,155-$1,165/mt CFR Brazil for copolymer. Domestically,
were hesitant to purchase large volumes this week, traders said. The Brazil’s Braskem was heard keeping PP pricing stable for the week
CFR South Asia PP raffia marker rose $6/mt week on week to be market sources said. In exports to the Mercosur region, the FOT Brazil
assessed at $1,045/mt Wednesday, on Middle East origin offers heard homopolymer assessment homopolymer price was stable at $1,140-
at $1,050/mt against buying indications at $1,040/mt CFR South Asia. $1,150/mt FOT basis, based on Brazil-origin offers at $1,265/mt CPT
“Global demand sentiment has been strong in recent weeks. Paraguay. Co-polymer pricing was flat at $1,170-$1,180/mt FOT Brazil.
November and December [PP prices] are expected to be stable to
strong, especially with the [upcoming] Reliance shutdown,” said an Rationale
Indian producer. “India [PP demand] is expected to be bullish in the CFR WCSA: Homopolymer and copolymer were flat week on week,
fourth-quarter, after the Diwali [holidays],” he added. Reliance assessed Wednesday at $1,090-$1,100/mt and $1,140-$1,150/mt CFR.
Industries Ltd. will begin a 25-day scheduled maintenance at its Homopolymer trading levels were talked at $1,090-1,100/mt CFR. The
Domestic Tariff Area PP lines with a nameplate capacity of 1 million mt/ assessment was made at the deal level. Co-polymer was heard at a
year at Jamnagar, Gujarat, starting November 11, company sources $50/mt premium and was assessed at that level. CFR Brazil:
have said. RIL is expected to begin scheduled maintenance of its Homopolymer was assessed $20/mt higher week on week at $1,115-
Special Economic Zone lines with another 1 million mt/year of PP raffia $1,125/mt CFR, based on a deal talked at $1,120/mt. Co-polymer was
capacity around end-November or early-December. $5/mt higher at $1,155-$1,165/mt CFR, based on talk of a $40/mt
premium to homopolymer grade. FOT Brazil: Homopolymer was flat at
Rationale $1,140-$1,150/mt, based on Brazil-origin offers at $1,265/mt CPT
Polypropylene raffia surged $30/mt week on week to e assessed at Paraguay. Co-polymer was stable at $1,170-$1,180/mt, based on Brazil
$1,020/mt CFR Far East Asia Wednesday, with deals heard done at that offers at $1,295/mt CPT Paraguay. The assessments subtract $100/mt
level and offers heard at $1,030-$1,040/mt. China domestic raffia for freight costs and $20/mt for negotiation.
surged Yuan 200/mt to Yuan 8,250/mt on deals heard at that level. The
CFR Southeast Asia raffia price increased $15/mt over the same period
and was assessed at $1,040/mt Wednesday, based on offers heard at Polystyrene
$1,050/mt from the Middle East and tradable indications of $1,040/mt
CFR Southeast Asia. The CFR South Asia raffia price was assessed at
Europe
$1,045/mt, up $6/mt week on week, with an offer heard at $1,050/mt
and a buying indication heard around $1,040/mt CFR South Asia. IPP Egyptian Estyrenics offers PS into Europe
Film, BOPP and block copolymer assessments were based on spreads BASF’s PS Oct sales down on Ludwigshafen issues
heard against PP raffia.
The general purpose polystyrene net contract price was assessed down
Eur5/mt on the week and declining Eur45/mt on the month. Most GPPS
Latin America
contracts have now been agreed, with the repeatable level heard at a
US-origin offers fading: sources
Eur45/mt decrease to September. The fall, however, is smaller than the
Brazilian demand continues to grow
styrene monomer contract price which was settled at Eur985/mt, a Eur50/
mt decline on the month. Expectations for the November styrene contract
Polypropylene import pricing along South America’s West Coast price have been heard as bullish. Styrene spot prices have edged higher
stabilized on the week as trading continued to trickle along slowly, following the explosion at BASF’s petrochemical complex in Ludwigshafen,
sources said. Buyer sources attributed the recent K Fair in Dusseldorf, Germany. The spot price was assessed at $989.50/mt FOB ARA
Germany, while sellers pointed to depressed demand and buyers Wednesday, up $67/mt from two weeks ago, and before the explosion. In
shrugging off higher price levels. Homopolymer grades were flat on the addition, the weaker euro exchange rate will support the November CP,
week, assessed Wednesday at $1,090-$1,100/mt CFR WCSA. Trading sources said. Sources added that this will likely filter through to PS
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 12
POLYMERSCAN october 26, 2016
November prices. BASF’s polystyrene sales volumes have been low in movement in feedstock styrene pricing. Pricing in that market recently
October as a result of reduced operations at its PS unit in Ludwigshafen, a moved higher because of tight supply and an increase in Asia demand for
company source said. BASF has introduced a strict allocation of PS US product, sources said. Styrene spot pricing was assessed Wednesday at
products to customers. In trade news, Egyptian Estyrenics has restarted $1,025/mt (46.50 cents/lb) FOB USG. Further upstream, spot benzene
the sale of polystyrene into Europe. Sidpec (Sidi Kerir Petrochemicals pricing, assessed Wednesday at 220 cents/gal, remained cheaper than the
company), a separate petrochemical company based in Egypt, is offering October contract level of 231 cents/gal ($690.69/mt), which has many
Estyrenics PS on its behalf, a source from Sidpec said. Estyrenics was not participants expecting a lower settlement for November. Benzene spot
immediately available to comment. Estyrenics has been an active PS seller pricing was down 7 cents from a week ago, based on S&P Global Platts
into Europe until last year, when it ceased production. The latest news data. Mixed price movements in these two markets kept a rollover in
indicates that it has restarted production. polystyrene contracts possibility, but an increase would not be a shock
given the $50/mt increase in styrene pricing over the last week, a source
Rationale said. October PS pricing, with producer-proposed increases of up to 3
The GPPS net contract price was assessed at Eur1,245/mt FD NWE cents/lb, was last heard experiencing resistance from the market.
Wednesday, down Eur5/mt on the week, and down Eur45/mt on the Domestic contracts were assessed Wednesday at 85-87 cents/lb ($1,874-
month, where buy and sell interests converged. The GPPS spot price $1,918/mt) delivered rail car for GPPS and at 95-97 cents/lb ($2,094-$2,138/
was assessed at Eur1,180/mt FD NWE Wednesday, unchanged, and in mt) delivered rail car for HIPS with pricing indications for GPPS still heard at
line with a source peg. The HIPS premium to GPPS was assessed 85-87 cents and for HIPS at 95-97 cents/lb. Sources pegged HIPS pricing at
unchanged at Eur70/mt for both contract and spot. The EPS CP was its typical premium of 9-11 cents/lb above GPPS pricing.
assessed at Eur1,255/mt FD NWE Wednesday, stable on the week, and
down Eur40/mt on the month, in line with a peg. The EPS spot price Rationale
was assessed stable on the week, in line with GPPS spot. The spot GPPS assessment was at $1,705/mt FAS Houston, stable
week on week. The assessment was based on market indications in
the mid- to upper-70s cents/lb range. The FAS Houston assessment
Africa & Turkey
factors in packaging and transportation to port costs of around 3
Iranian offers heard in Turkey, EU
cents/lb ($66/mt) on top of bulk rail-car prices. The HIPS assessment
Egyptian product offered to EU
at $1,815/mt FAS Houston, also stable week on week, was based on the
typical premium to GPPS talked at 5 cents/lb ($110/mt). US domestic
Polystyrene prices in Turkey and North Africa were at a rollover on the week polystyrene was assessed at 85-87 cents/lb ($1,874-$1,918/mt)
at $1,140/mt CFR, amid steady fundamentals. Iranian offers continued to be delivered rail car for GPPS and 95-97 cents/lb ($2,094-$2,138/mt)
heard at steady levels of $1,080/mt CFR Turkey. Iranian offers were also delivered rail car for HIPS, based on pricing indications at 85-87 cents/
heard in the EU, sources added. Egyptian Estyrenics has restarted the sale lb for GPPS and 9-11 cents/lb higher for HIPS.
of PS into Europe, according to sources. Sidpec (Sidi Kerir Petrochemicals
company), a separate petrochemical company based in Egypt, is offering
Asia
Estyrenics PS on its behalf, a source from Sidpec said. It had been an active
seller of PS into Europe until last year, when it ceased production. The latest Activity quiet after sharp price increase
news indicates it has restarted production. Japan’s PS output rises 18% in Sep
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 13
POLYMERSCAN october 26, 2016
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 14
POLYMERSCAN october 26, 2016
Rationale Rationale
The spot ABS price was assessed stable week on week at $1,480/mt The NWE spot price was assessed at Eur880/mt FD NWE Wednesday,
CFR China Wednesday. Offer levels were heard at $1,490-1,510/mt CFR unchanged on the week and assessed within the Eur840-910/mt
China. In SEA, the spot ABS price was assessed unchanged week on range heard. The European net contract price was also assessed
week at $1,460/mt CFR Wednesday, with a deal reported to have been stable at Eur880/mt FD NWE Wednesday, at unchanged parity to
done at $1,460/mt CFR SEA. spot prices. The spot PET price held steady at GBP790/mt FD UK,
assessed at conversion to euro prices, while the UK net contract
price was also assessed unchanged at parity to spot at GBP790/mt.
Polyethylene Terephthalate Platts assessed R-PET stable at Eur720/mt FD NWE, in line with
indications heard. R-PET was assessed at GBP615/mt FD UK,
unchanged from last Wednesday.
Europe
Sellers bullish as euro holds at weak levels
United States
Buyers hold back, PET prices assessed stable
Participants monitor Brazil situation
The picture turned slightly cloudy in the European polyethylene Domestic pricing follows higher feedstock
terephthalate market during the week as volatility took grip of the
energy complex. The ICE Brent crude front-month futures contract US spot polyethylene terephthalate remained stable week on week,
briefly dropped below the $50/b mark during Wednesday’s trading assessed Wednesday at $1,069-$1,091/mt (48.50-49.50 cents/lb) DDP
session, which kept many buyers cautious over fixing requirements amid US West Coast, with market participants monitoring feedstock pricing
possibilities of weaker feedstock prices ahead. Meanwhile, the euro and a potential sale in Brazil. Market sources said spot pricing
continued trading below $1.10/Eur during the week, which threatened remained around 49 cents/lb DDP US West Coast, with the recent
PET producers with the prospects of higher euro-denominated imports from Brazil continuing to pressure pricing lower. The presence
feedstock contract prices for November. A seller said he was expecting of the lower-priced Brazilian material has impacted margins for
an increase of around Eur35-40/mt on the feedstock front, and was importers bringing in product from Asia as freight rates from the
unwilling to sell below Eur900/mt. Meanwhile, many buyers were region have risen, sources said. “Pricing is still an issue due to Brazil
adamant they would not pay higher than around Eur870/mt, which kept imports,” a source said. “I believe their strategy is to stay 1 cent/lb
the market in a stalemate. Platts assessed spot and freely negotiated below others.” The inflow of material from Brazil has started to slow,
net contract prices stable on the week at Eur880/mt. Meanwhile, with and the product coming in has been at firmer prices, a source said.
sterling’s exchange rate largely unchanged from last week, UK prices Another source said the imports of Brazilian product have been fairly
also held steady at GBP790/mt, assessed at conversion to euro values. In steady but that buyers have started to evaluate where to source
other news, some PET producers in eastern Europe were faced with material should the imports slow down. Brazilian material has been
tight supplies of feedstock purified terephthalic acid. This was due to a more present in the market this year with producer Petroquimica
local producer of PTA facing technical issues in its plant, however no Suape in negotiations for a sale. Alpek, the parent company of DAK
official confirmation was made from the company. Market participants Americas, has considered purchasing the Petrobras-owned PET
said this disruption in PTA supply had also led to shortages of PET resin producer. A 30-day window, an extension from the original 60-day
in the region, which made sellers react bullishly. However, the situation exclusive negotiation period, ends this week. “Please note that
in other regions remained calm and did not seem to follow suit of the discussions between Alpek and Petrobras may continue after the
developments in eastern Europe. R-PET: Prices of recycled PET in expiration of the exclusive negotiation period,” a spokesman said
Europe moved sideways on the week at Eur720/mt and GBP615/mt, in Wednesday. “Currently, there is no news related to this matter.” Alpek’s
Continental Europe and the UK respectively. Demand had remained subsidiary DAK Americas produces PET in the US, Mexico, Canada and
largely stable, whereas supplies of feedstock baled bottles also Argentina. The assets of PQS and Citepe include a 700,000 mt/year
remained streamlined. This had kept market fundamentals largely purified terephthalic acid plant and a 450,000 mt/year PET plant in
balanced, and did not pressure recyclers to engage in aggressive price Ipojuca, Pernambuco, Brazil. US domestic contract pricing was
negotiations. Sentiment was also stable for November price assessed at 1,202-1,224/mt (54.50-55.50 cents/lb), up 0.50 cent week
expectations amid no issues in supplies. With prices in the virgin on week. The increase came after October pricing for feedstock PTA
segment having firmed in the past few weeks, buyers in Europe rose 0.50 cent to 41.49 cents/lb, with PET contract pricing heard
currently had healthier discounts on their flakes versus virgin levels. The tracking the movement in PTA. The October US monoethylene glycol
flake to virgin discount was wider in the UK, as the pound’s value contract also rose for the month, up 1.40 cents to 32.40-32.90 cents/lb.
plummeted in the past quarter, while UK flake prices remained stable US spot MEG was assessed Friday at 28.50-29.50 cents/lb ($628-$650/
amid largely unchanged feedstock baled bottle prices. Together with mt) FOB USG, up 0.50 cent week on week. Global pricing was flat to
deteriorating import economics, this led to an uptick in inquiries for UK slightly higher week on week. Asian spot pricing gained $6 to $870/mt
flakes, however recyclers were more keen to expand contractual FOB Northeast Asia and $873/mt FOB Southeast Asia, following higher
business with their core customers rather than servicing spot business. MEG pricing. European spot held at Eur880/mt FD NWE.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 15
POLYMERSCAN october 26, 2016
Rationale and overall firm sentiment as the key drivers. MEG was assessed at
US spot polyethylene terephthalate was assessed Wednesday at $667/mt CFR China Wednesday, close to a 27-week high. Supporting
$1,069-$1,091/mt (48.50-49.50 cents/lb DDP US West Coast, flat week the higher prices, MEG supply was tight due to production issues, such
on week. The assessment came with market sources talking the price as the run rates heard in the 50%-60% range at Shell’s MEG plant at
at 49 cents/lb DDP USWC. Domestic contracts were assessed at Pulau Bukom in Singapore stemming from a recent cracker shutdown,
$1,202-1,224/mt (54.50-55.50 cents/lb), up 0.50 cent week on week, as well as talk of impacted production in Germany and in the US Gulf
with pricing talked at that level and tracking the rise in October pricing Coast region. In addition to the higher MEG prices, short-covering by
for feedstock purified terephthalic acid. major Chinese financial and futures traders was supporting prices.
There were also some indications of an uptick in regional demand or
demand for PET bottle chips from India this week.
Asia
MEG supply tight on reduced runs
Rationale
Demand seen increasing from India
PET bottle grade was assessed up $6/mt week on week at $870/mt
FOB Northeast Asia and $873/mt FOB Southeast Asia Wednesday, with
Asian polyethylene terephthalate rose $6/mt this week due to an transacted levels heard around $870/mt FOB China for November
increase in feedstock monoethylene glycol costs. Spot MEG prices are loading/delivery. The Southeast Asia assessment tracked the gains in
at a six-month high, with sources pointing to firm upstream markets the Northeast Asia market.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 16
POLYMERSCAN october 26, 2016
Asia ($/mt)
Monthly Contract Price (Oct): 940.00-940.00 FD NWE (Eur/mt)
Spot Friday Weekly Average
US (¢/lb)
CFR China 655-657 643.4-645.4
Spot Friday Weekly Average CFR SE Asia 658-660 (1) –
FD USG M1 OCT 29.500-30.000 30.125-30.625
FD USG M2 NOV 29.500-30.000 30.100-30.600 MEG CP Nomination (OCT) – CFR Asia
MEGlobal: 790 Sabic: 790 Shell: 780
Net Contract Price (OCT ): NA-NA Delivered
(1) CFR SE Asia = CFR Indonesia.Note: *A/F denotes anti-freeze grade Asian ethylene glycol assessments are
Asia ($/mt) basis L/C 90 days.
Spot Friday Weekly Average
FOB Korea 1019-1021 –
CFR SE Asia 1029-1031 1037.0-1039.0
Polymer Feedstocks – Butadiene
CFR NE Asia 1059-1061 1067.0-1069.0 Europe
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand. Spot Friday Weekly Average
FD NWE (Eur/mt) 983.00-987.00 983.400-987.400
FOB Rdam ($/mt) 1148.00-1152.00 1128.000-1132.000
Polymer Feedstocks – Propylene
Europe (Eur/mt) Butadiene Monthly Contract FD NWE OCT: 720.00-720.00 (Eur/mt)
Poly Grade Spot Friday Weekly Average US (¢/lb)
FD NWE 714.00-719.00 711.000-715.600 Spot Friday
CIF NWE 707.00-711.00 703.600-708.200 CIF USG 52.50-53.50
Chem Grade Spot Friday Weekly Average
FD NWE 670.00-674.00 – Monthly Contract Price (OCT ) 46.00-46.00
CIF NWE 640.00-644.00 –
Asia ($/mt)
Poly Grade Monthly Contract Price (Oct): 725.00-725.00 Spot Friday Weekly Average
US (¢/lb) FOB Korea 1599-1601 1599.00-1601.00
Spot Friday Weekly Average CFR Taiwan 1649-1651
dlvd USG dlvd USG CFR SE Asia 1619-1621 (1)
Poly Grade M1 OCT 38.250-38.750 38.750-39.250 CFR China 1639-1641 1639.00-1641.00
Poly Grade M2 NOV 38.250-38.750 38.750-39.250 (1) CFR SE Asia = CFR Indonesia. *A/F denotes anti-freeze grade.
Ref Grade 27.250-27.750 27.650-28.150
Monthly Contract Price (Oct ) – (Eur/mt) 750.00-750.00 Notes: All olefin prices reflect assessments at close of previous Friday.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 17
POLYMERSCAN october 26, 2016
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 18
POLYMERSCAN october 26, 2016
maintenance was in part due to the timing of Pemex undergoing a small tradable level was heard at $1,055-$1,060/mt CFR NEA. Meanwhile, the
maintenance shutdown. Pemex was not available to comment. A source CFR SEA ethylene price also dropped $10/mt to $1,030/mt during the
close to Pemex said maintenance at both plants was expected to last until same period. A buying idea was heard below $1,000/mt CFR SEA, while
October 31. The source said they anticipated the Pemex crackers may run a sell idea was reported at $1,050/mt CFR SEA.
closer to 100%. Braskem Idesa said it hoped to make “minor adjustments,
corrections, improvements and cleaning some of the equipment during the
shutdown.” No major issues were expected and the shutdown was not Ethylene Glycol
expected to affect customer supplies, according to company sources.
Pemex has two steam crackers, one at Morelos and one at Cangrejera, and
Europe
each has a similar capacity. Ethylene production at the crackers is
estimated at 500,000 mt/year each. A joint venture between Braskem Upside capped by high inventory
(75%) and Mexico’s Grupo Idesa (25%), the complex has a nameplate Logistics affected as KTL shut
capacity of 1 million mt/year ethylene and includes 1 million mt/year of
polyethylene. In trade activity, the Kithnos was seen exiting the port of MEG: Availability concerns and uncertainty over the price direction for
Bahia Blanca, Argentina and heading to the port of Singapore with an feedstocks following the explosion and fires at BASF’s Ludwigshafen
estimated time of arrival of November 1, according to S&P Global Platts site earlier this week pushed MEG prices higher Friday. The spot price
cFlow ship-tracking software. Argentina’s Dow found a buyer for its was assessed at Eur625/mt ($680/mt) FCA NWE, up Eur20/mt on the
monomer in Asia, a source with knowledge of business operations said. week. Some sources said even higher levels — up to Eur640/mt —
were already achievable. “We see reaction, but not panic,” a source
said. Sources said the ethylene oxide and MEG plants in Ludwigshafen
Asia
were likely to be down as both BASF’s crackers were shut Monday. The
Spot avails seen increasing in NEA
company declined to say if production at EO and MEG units was halted.
SEA falls after being stable for one month
But it did say there was no force majeure on either despite the one
declared on olefins. EO is a feedstock for MEG production. BASF’s EO
Asian ethylene fell $10/mt day on day Friday, pressured by rising capacity at the site is 375,000 mt/year and 22,000 mt/year of MEG. The
supplies for November business. Some spot demand was seen to be site accounts for around 10% of European EO capacity and only 1% of
available for November in China but buying indication did not move up MEG capacity. BASF said it was going to restart both crackers in the
this week as spot supplies are seen to be increasing in Asia. Market next few days. Sources said the incident might underpin negotiations
sources anticipate some spot exports from Taiwan amid an ethylene of the ethylene contract prices for November. The concern of a
pipeline maintenance work from November to January next year, while potential increase in feedstock has reportedly triggered extra buying of
steam cracker operations are returning to normal after the steam MEG, several sources said. But the underlying consumption of MEG
cracker turnaround season. Ethylene supplies from the Middle East are remained stable and there was still little sign of a seasonal demand
seen to come to Asia as the recent fire at BASF’s steam cracker in from the de-icing segment. One trader said the market was still well-
Ludwigshafen did not tighten ethylene supplies in Europe. The two supplied. But as prices in Asia rise — the CFR China marker was
steam crackers are due to be restarted soon after an emergency assessed last at $656/mt — Middle Eastern suppliers could start
shutdown earlier this week. According to a shipping report, an diverting volumes away from Europe in favor of Asia. The rise in an FD
ethylene cargo is due to be loaded from Al-Jubail to Asia for the first price was slightly steeper due to tighter availability of trucks. The
half of November. In Southeast Asia, the spot price also traveled south transport hub Kombi-Terminal Ludwigshafen remained shut affecting
— after remaining at $1,040/mt CFR SEA level for almost one month — some truck deliveries. There is no clear timeline for its re-opening,
as spot demand is diminishing amid constant flow of deepsea cargoes according to the spokeswoman. But sources hoped the situation could
from the Middle East. In addition, the region’s steam cracker normalize by mid-next week. DEG: DEG prices in Europe rose in tandem
operations are seen to be normalizing, with Shell Singapore seen to be with MEG pricing. The market appeared still well-supplied, with only a
restarting its 960,000 mt/year steam cracker soon. The cracker was marginal rise in demand. The spot price was assessed at Eur615/mt
shut down September 27 due to a compressor problem. In related FCA NWE, up Eur15/mt. One source noted an increased interest in
statistics news, Japan’s steam cracker operating rates in September European-origin DEG from Turkish buyers, saying a rise in Asia could
averaged 95.2%, compared with 94% a year earlier and 95% in August, have prompted this demand. But one trader said he was importing a
the Japan Petrochemical Industry Association said Friday. Japan’s bit more material as well, which should cap any price rises.
ethylene production in September fell 7% from a month earlier to
470,300 mt, the JPCA said. Rationale
S&P Global Platts assessed MEG at Eur625/mt FCA NWE, up Eur20/mt.
Rationale Trades reported done earlier in the week at Eur605/mt and Eur610/mt
The CFR Northeast Asia ethylene price fell $10/mt day on day to be were deemed unrepeatable by the end of the week, as prices moved
assessed at $1,060/mt Friday. For November, a buying idea was heard higher. Platts assessed closer to the low end of the Eur620-640/mt range,
at $1,050/mt CFR NEA, against a sell idea at $1,100/mt CFR NEA. A in a rising market. The FD price was assessed at Eur660/mt, up Eur25/mt,
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 19
POLYMERSCAN october 26, 2016
as truck freight rates edged higher on logistical problems. The CIF price week to close at $656/mt on Friday, up $24/mt week on week and $8/
was assessed at Eur600/mt, up Eur25/mt, in line with the range of Eur590- mt day on day. CFR China MEG prices have surged $40/mt — or
605/mt, pegged by sources. DEG prices rose Eur15/mt to Eur615/mt FCA roughly 6.5% — since September 23, S&P Global Platts data showed.
NWE, within the reported range of Eur590-640/mt and at a Eur10/mt Domestic prices in China also gained, closing the week at Yuan 5,410/
discount to MEG as heard pegged. The FD DEG price was assessed at mt ex-tank basis, up Yuan 160/mt for the period, and Yuan 50/mt on the
Eur645/mt, up Eur20/mt, based on a Eur35/mt inland freight rate. day. Domestic China prices have climbed Yuan 310/mt — or roughly 6%
— since September 28, also closing the week at six-week highs. A
flurry of activity during the last two days of the week accounted for the
United States
bulk of gains, with Friday trading levels moving up from $645/mt CFR
Market awaits anti-freeze season
China to $655/mt CFR China, with bids at the latter level by close of
Feedstock sees slight decline
assessment. Market sources cited short-covering and momentum
stemming from stronger crude and naphtha prices as key drivers in
US spot monoethylene glycol pricing reversed the previous week’s the market. Production issues, such as run rates in the 50%-60%
decline, rising along with firmer global pricing. US MEG was assessed range heard at Shell’s MEG plant at Pulau Bukom in Singapore,
Friday at 28.50-29.50 cents/lb ($628-$$650/mt) FOB USG, up 0.50 cent stemming from a recent cracker shutdown, as well as talk of impacted
week on week. The rising global pricing applied upward pressure with the production in Germany and the US Gulf Coast region, were also
market awaiting stronger demand from winter-weather applications. mentioned. Despite higher prices in Asia, the arbitrage from the US
Producers have been waiting for the arrival of colder winter weather in Gulf remained closed on paper, one source said, adding that with FOB
the US to boost anti-freeze demand. Demand from that sector has seen a prices in that region last heard in the $617-$639/mt range, prices
slow start amid the relatively warm weather at the start of the fourth would need to rise above $700/mt CFR China for the window to open.
quarter. In production, Huntsman has been dealing with a steam issue at In feedstocks, Asian ethylene prices dipped $10/mt week on week to
its Port Neches, Texas, facility that may require a few more weeks of be assessed at $1,060/mt for CFR Northeast Asia and $1,030/mt for
work, sources said. Global MEG pricing gained week on week, with CFR Southeast Asia Friday, amid improving supply.
production issues contributing to firm sentiment. Asian MEG rose on
stronger sentiment with firming downstream prices and issues at Shell’s Rationale
MEG plant in Singapore, pushing Chinese prices up $24 week on week to Spot MEG was assessed Friday at $656/mt CFR China and $659/mt
a six-week high of $656/mt CFR China. European spot pricing climbed CFR Southeast Asia. The CFR China assessment was based on bids at
Eur20 to Eur625/mt ($680/mt) FCA NWE after the recent fire at BASF’s $655/mt for November arrival heard by close of assessment, that
Ludwigshafen, Germany, facility. In feedstocks, US spot ethylene dipped followed an offscreen trade at that level. The price was assessed
0.25 cent week on week to a Friday assessment at 29.75 cents/lb ($656/ above the bid level. The domestic China price of Yuan 5,410/mt ex-tank
mt) FD USG for front-month material. Downstream US polyethylene basis was based on trading indications at Yuan 5,400-5,420/mt and it
terephthalate was assessed Wednesday at $1,069-$1,091/mt (48.50- was assessed at the mid-point. The CFR Southeast Asia assessment
49.50 cents/lb) DDP US West Coast, an increase of $22/mt week on week. at $659/mt was based on the CFR China price plus a $3/mt premium to
MEG domestic contract prices were assessed at 32.4-32.9 cents/lb, up 1.4 account for the location spread.
cents from September’s price level.
Rationale Propylene
US spot monoethylene glycol was assessed Friday at 28.50-29.50
cents/lb ($628-$650/mt) FOB USG, up 0.50 cent week on week. The
Europe
assessment followed global pricing higher as feedstock pricing saw a
small downward movement. The October US MEG contract was Producers, consumers expect MCP rise on naphtha
assessed at 32.40-32.90 cents/lb, up 1.4 cents from September’s price CGP falls on Rhine levels, BASF force majeure
level, based on a weighted formula that discounts the North American
benchmark price by 15% and the ACP average by 5%, with each October spot FD NWE polymer grade propylene prices were assessed
segment equally weighted, per market feedback. at a 4% discount to the October contract price Friday, down 2% on the
week. Industry sources continued to report higher propylene
availability in spite of ongoing maintenance and the force majeure at
Asia
BASF’s Ludwigshafen site in Germany. One consumer said it had they
CFR China up $24/mt on week, $40/mt since H2 Sep
had not seen a large impact from the force majeure so far, but
Market eyes production issues beyond Asia
reported having received offers from upstream refineries looking to
secure placements for their rail cars. Availability was seen by a trader
Asian spot monoethylene glycol prices hit six-week highs Friday, with to be strongest in chemical grade propylene, noting “it has taken a
sources pointing to firm upstream markets and overall firm sentiment massive stumble in the last two weeks”. Another trader said “CGP is
as key drivers. The CFR China assessment rose steadily throughout the clearly quite well supplied in Germany”, and “bigger discounts don’t
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 20
POLYMERSCAN october 26, 2016
surprise me at all.” A third trader attributed the dip in prices to lower on Friday. Sources attributed the recent spot price fall — the prompt-
Rhine water levels and the force majeure at BASF, but expected CGP month PGP price fell 4.5 cents/lb or 10% since September 20,
prices to return to “a more normal level” following the restart of BASF’s according to S&P Global Platts data — to falling spot ethylene prices,
derivative plants. The Rhine levels at Kaub — a critical point on the which factor into propylene production costs through metathesis
river — were measured at 96 cm by the German waterway authority on processes. Additionally, sources said players are destocking as the end
Friday, 4 cm below the 1 m level which is seen as critical for loading of the year approaches and inventory taxes in Texas come into play.
cargoes. Low water levels have curtailed movement in Central Europe Meantime, propylene for nonfuel use inventories rose 240,000 barrels
for a number of petrochemicals in recent weeks, including propylene, to 3.015 million barrels in the week ended October 14, US Energy
methanol and butadiene. The traders’ comments aligned with a Information Administration data showed. Inventories were last higher
consumer’s report on Monday of a trade at double digit discounts to the week of July 15 when they were at 3.163 million barrels, per EIA
the October monthly contract price last week. In supply, BASF crackers data. Refinery run rates dropped 0.5 percentage point to 85% in the
were reported to have restarted Thursday, and one producer said they week ended October 14, EIA data showed. In international news, BASF
would typically take one week to ramp up to full production from cold. declared force majeure on purchases of ethylene, propylene and
But a source close to the company said this was not a standard naphtha for its production facility at Ludwigshafen, Germany, a
situation as the crackers had an emergency shutdown following the spokeswoman said Wednesday. She declined further comment.
accident Monday, and it was unclear how soon they would be back up Northwest European PGP fell Eur5/mt for the week, assessed Friday at
to full capacity. The source added that was no known damage to the Eur716.5/mt FD NWE basis (35.3 cents/lb). US market sources did not
units. In contracts, sources this week expected an increase based on believe the force majeure opens up an arbitrage opportunity to Europe
higher feedstocks, as naphtha continues its upward surge from early at this point, with one source stating that US propylene pricing would
August. Naphtha CIF NWE cargoes were assessed at $445/mt on have to drop 12 cents/lb for the arbitrage window to open. In contracts,
Friday, up $33 since the start of September and over $110 since August initial nominations for US October propylene contract prices called for
1. A producer expected a hike of Eur40-50/mt in November, while a a 0.5 cent/lb decrease to 42.5 cents/lb for polymer-grade product,
consumer saw a minimum Eur30 increase, noting that the last three sources said. The nomination is within market expectations, which
settlements had occurred against a backdrop of C3 tightness, which recently called for rollover to 0.50 cent/lb decrease, sources said.
was no longer the case. The S&P Global Platts November Propylene buyers were heard pushing for a 1-cent decrease. In
polypropylene indicator — a quantitative model based on feedstock feedstocks, prompt-month non-LST Mt Belvieu propane closed the
costs — was assessed at a Eur30 increase on Friday at Eur755/mt. week assessed at 59.25 cents/gal, rising 1.25 cents/gal for the week.
Rationale Rationale
Polymer grade propylene spot prices were assessed at Eur716.50/mt US polymer-grade propylene was down 0.5 cent for the week,
FD NWE Friday for delivery 3-30 days forward, down Eur5/mt on the assessed Friday at 38.25-38.75 cents/lb FD USG for prompt- and
week. Indications were heard between a small premium to the October forward-month deliveries, based on a November offer at 39 cents/lb
MCP FD NWE and a 5-6% discount, with no trades reported. S&P Global MtB-pipe, subtracting 0.50 cent for negotiations. A flat structure was
Platts priced PGP at a 4% discount to the October CP, which was seen maintained between prompt- and forward-month assessments.
to be the most repeatable level following higher C3 availability in Refinery-grade propylene was down 2.25 cents for the week at 27.25-
October. Platts assessed chemical-grade propylene at Eur672/mt FD 27.75 cents/lb FD USG, based on a trade heard at 27.5 cents/lb MtB-
NWE for delivery 3-30 days forward, down Eur12.50/mt on the week. pipe. October contracts were not heard settled by time of publication.
The CGP discount to the October MCP was assessed at 10%, down 1% September contract prices for chemical-grade propylene and PGP
on the week, as industry sources continued to report length in the settled at a 6 cents/lb increase at 41.5 cents/lb and 43 cents/lb,
market. One peg was heard around October MCP minus 16%, with no respectively, with multiple participants confirming.
additional indications or trades were heard. A discount of Eur30 was
applied to inland prices for CGP delivered at the coast.
Latin America
Asia-origin cargo lands in Mexico
United States
Key US CP could settle lower
BASF FM in Germany, arb not open yet: sources
Inventory at 3-month high: EIA
Market talk of continued trade activity in Latin America this week focused
on a potential ex-Brazil cargo from Petrobras, sources said. A source with
US spot polymer-grade propylene pricing fell 0.5 cent on the week, Mexico’s polypropylene producer Indelpro said it was well stocked with
assessed Friday at 38.25-38.75 cents/lb FD USG for October and monomer and did not anticipate needing feedstock in the short term.
November deliveries. Spot refinery-grade propylene fell 2.25 cents for Meanwhile, a source with PP producer Esenttia in Colombia said they
the week, assessed Friday at 27.25-27.75 cents/lb FD USG. The week were aware of the tender but did not confirm they were stepping into the
started off with prompt-month PGP at 39.5 cents/lb FD USG then rising spot market to buy the monomer. Esenttia last received a 3,000-4,000
to 40 cents/lb FD USG Tuesday before falling to 38.5 cents/lb FD USG mt cargo from the port of Antwerp, Belgium, to Cartagena, Colombia,
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 21
POLYMERSCAN october 26, 2016
according to S&P Global Platts cFlow ship-tracking software. A source majority of deals heard to have been transacted at $850-$855/mt CFR
with Esenttia confirmed the trade for the European cargo but was not China this week. Meanwhile, the FOB Korea propylene marker also
able to include additional details including terms and pricing. The source dived $40/mt from the previous week, to be assessed at $815/mt
also indicated they also had a good supply of monomer. Meanwhile, the Friday, with the market level heard to be in the $810-$820/mt FOB
Astipalea landed in the Mexican port of Altamira from the port of Korea range. In other areas, the CFR Taiwan propylene marker also
Singapore, according to Platts cFlow. A source with Mexico’s Indelpro was dropped $40/mt to $850/mt during the same period, with a buying idea
not available to confirm the trade for 5,000 mt of monomer but a source heard at $820-$830/mt CFR Taiwan.
with knowledge of the trade confirmed it was bought by the producer. In
key contracts, there was continued talk of October US propylene down
0.5 to 1 cent/lb after September contract prices increased by 6 cents/lb to Butadiene
43 cents/lb for polymer-grade product, market sources said. That
settlement was the fourth consecutive monthly increase. Market spot
Europe
buyers in Latin America had been closely following contract negotiations.
Cargoes exported to the US
Entire C4s chain tight
Asia
Market under pressure amid rising supplies
Butadiene on a FOB Rotterdam basis was assessed at $1,1150/mt
Market seen supported by bullish PP
Friday, up $25 week-on-week. In the European domestic market, the
product was assessed at Eur985/mt ($1,070/mt) FD NWE, flat on the
Asian propylene came down $40/mt week on week Friday, after having week. Traders reported a deal at Eur985/mt FD NWE, but this could not
risen $40-$45/mt week on week to a 15-month high in the previous be confirmed by the parties involved in the sale of the cargo. Europe
week. The Asian propylene market remained stable earlier this week, origin cargoes were heard being offered into Asia at high prices.
well-supported by a firmer downstream polypropylene market. But the “These offers are at prices higher than $1,640/mt CFR China,” a
Asian propylene market was under pressure in the middle of this week, European trader of downstream SBR said. Traders were seen unable to
amid rising supplies. Japan’s Idemitsu Kosan plans to restart its arrange cargoes for shipments to Asia, but contractual volumes were
naphtha-fed steam cracker in Tokuyama at the end of this week, after seen headed to the US. A 5,000 mt cargo with laycan October 8-10 was
completing annual maintenance, a company official said Wednesday. heard headed out of Saudi Arabia to the US. Another butadiene cargo
The cracker is able to produce 300,000 mt/year of propylene. The with laycan October 10-12 was seen headed out of Europe to the US.
cracker was shut down September 10. In addition, the impact of a The prices at which these cargoes exchanged hands could not be
shutdown of BASF’s steam crackers in Ludwigshafen is seen to be confirmed. Contract negotiations for November settlement of
minimum as the units are due to be restarted soon. The crackers were butadiene in Europe were heard to have begun Friday, but had not
shut down following a fire earlier this week. Market sources said concluded by the end of day. In Asia, the price was assessed at $1,640/
Taiwan’s CPC awarded its sell tender (two vessels) for prompt end- mt CFR China Friday which was flat from last week but still a very high
October loading this week. In the domestic market in China, the local number considering the 2016 average for butadiene prices in Asia. This
propylene prices in Shandong were heard to have dropped around lent strong support to prices in Europe. A producer placed the
Yuan 100/mt from last week to Yuan 7,000-7,050/mt Friday. Market company’s sell idea at $1,200/mt FOB Rotterdam or higher. A trader
sources said at the same time that the Asian propylene market would was last heard looking for a cargo at $1,100/mt FOB Rotterdam but
find a support amid the firmer downstream PP market. On Friday, the supplies were heard to be so tight in Europe that no offer was heard to
CFR China raffia-grade PP marker was assessed at $1,000/mt, up $40/ have been made to the trader. Prevailing high prices in Europe and Asia
mt from the previous week. In turnaround news, Taiwan’s Formosa came primarily as a result of a force majeure declared by Shell
plans to shut its 250,000 mt/year olefins conversion unit in Mailiao Chemicals’ cracker in Pulau Bukom, Singapore, following a technical
from March to April next year for annual maintenance, a company problem in its compressor three weeks earlier. The shutdown was
source said Friday. Currently, the OCU is running at 100% capacity. The expected to last for a maximum of three weeks, but the market is
company also plans to shut its 350,000 mt/year No. 2 residue fluid eagerly awaiting a fresh statement from Shell. An arbitrage window
catalytic cracker in Mailiao for March to April next year for annual between Europe and Asia was seen to be wide open, but no cargo was
maintenance, the source said. In statistics news, South Korea’s heard to have been exported out of Europe. CC4, which acts as a
propylene exports in September fell 5.2% from a month earlier to feedstock for butadiene, was assessed at a 1.25 factor to naphtha on
154,121 mt, according to customs data Monday. Compared with a year CIF NWE basis. The price of butadiene and that of all C4s in Europe
earlier, South Korea’s propylene imports marked a 30.2% increase. have been bullish for most of 2016 because of more cracker
maintenance in Asia and Europe. Ineos’ cracker at Rafnes suffered an
Rationale outage following a fire at the compressor last week and remained shut.
The CFR China propylene price marker sank $40/mt week on week to Czech Unipetrol expects to restart its Litvinov cracker to reach
be assessed at $850/mt Friday. Some deals were reported to have standard operating rates by end-October. The cracker was shut
been done this week in a range of $835-$855/mt CFR China, with the following a fire almost a year earlier. PKN Orlen’s cracker at Plock in
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 22
POLYMERSCAN october 26, 2016
Poland was was expected to restart fully by end-October. Italy’s including CFR Taiwan, FOB Korea, CFR SE Asia and CFR China - has
Versalis has shut its Dunkirk cracker end-August for maintenance and surged approximately 35-42%, per Platts data. One source said he
is expected to restart early November. LyondellBasell, which operates expects to see elevated pricing across Asia for several more weeks, with
two crackers at its Wesseling site in Germany with capacities of other sources saying the market would remain extremely tight on supply
305,000 and 735,000 mt/year respectively, was heard to have shut one until at least December. October US butadiene contracts settled up 2-7
in early September and will restart in November. cents/lb at a 46 cents/lb ($1,014/mt) settlement. Market participants have
talked the possibility of another contract price increase for November of
Rationale 2-3 cents/lb, but no announcements have been made yet.
Butadiene was assessed at $1,150/mt FOB Rotterdam, up $25 on the
week, and within the $1,100-1,200/mt FOB Rotterdam buy and sell Rationale
ideas spread heard in the market. The FD NWE price was assessed at US spot butadiene was assessed at 53 cents/lb CIF USG Friday, up
Eur985/mt FD NWE, up a marginal Eur1 on the week, and at the level of 1.5 cents/lb on the week, as price indications were heard between
a deal heard inked in the market. 51-54 cents/lb and amid tight supply. The October US butadiene
contract price was settled at 46 cents/lb, sources said. Seller
confirmation was unavailable.
United States
Tight supply, high demand support spot: sources
Latin America
Arb to Asia remains open: sources
Spot cargos remain limited
The US spot butadiene assessment rose 1.5 cents on the week to 53 Key US CP could head higher
cents/lb ($1,168/mt) CIF USG as pricing indications were heard between
51-54 cents/lb. This is the highest price level since September 19, 2014 Europe-origin cargos continued to find a home in Mexico following a
when it was assessed at 55 cents/lb CIF USG ($1,213/mt), according to slow start to begin the fourth quarter, sources said. The Tenna Kosan
S&P Global Platts data. During the week, November bids were heard at landed in the port of Altamira this week from the Sines port of
53-54 cents/lb CIF USG. US spot supply continued to be talked tight as Portugal, according to S&P Global Platts cFlow ship-tracking software.
the market was still recovering from unplanned outages earlier in the Availability for October had been expected to be limited from Asia and
third quarter, sources said. Since Shell Chemicals’ butadiene extraction Europe amid talk of tightness in those regions relating to maintenance
unit in Singapore was shutdown two weeks ago, supply has tightened in issues, sources said. A buyer with Mexico’s INSA was not available to
Asia and prices have surged upward, opening an arbitrage opportunity for confirm the trade. In exports, the Atlantic Gas was seen heading to
product from the US and Europe to be sold overseas, sources said. Brazil with an ETA of October 25 to pick up a cargo, according to Platts
Sources added the plant is expected to be down for 3-6 weeks from the cFlow. A source with olefins producer Braskem of Brazil was not
initial shutdown date. The price range of 50-52 cents/lb was heard as a available to confirm the trade. Asian butadiene was stable Friday and
viable level for exports to Asia from the US with freight rates being heard was assessed by Platts flat on the week at $1,640/mt CFR China and
between $200-$300/mt. A source said there could be more shipments to $1,600/mt FOB Korea. Cargos were heard sold out until November by
Asia from the US, however tight US supply would likely limit a lot of market participants. In the US, there is continued talk of the November
product being exported. The FOB Korea price was assessed at $1,600/mt US butadiene contract price increasing 2-3 cents. The talk is early but
Friday, unchanged week on week. The CFR China pricing was also stable has remained firm and comes amid an October settlement at 46 cents/
week on week, assessed at $1,640/mt Friday. The CFR Taiwan pricing lb ($1,014/mt). Market participants keep a close eye on key market
remained at $1,650/mt. Since September 23, Asia butadiene pricing - contract settlements, including those in the US, per market feedback.
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© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 23
POLYMERSCAN october 26, 2016
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 24
POLYMERSCAN october 26, 2016
that sector in the past few weeks. Demand for isomer MX was also
subdued, as extraction margins for PX remained slim, whereas Asia Styrenics Prices
supplies of PX also remained ample across all regions. This
(¢/lb)
weighed on MX premiums which fell $21.50 from last Friday to
1300
$123.50/mt, although stable on the day. Isomer MX prices also CFR FE Asia GPPS
decreased $24.50 from last week to $624.50/mt, but were up $7 Styrene FOB Korea
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 25
POLYMERSCAN october 26, 2016
demand has remained strong, sources said. However, the bottling the offer at $799/mt CFR Taiwan/China. There was no firm buying
season was over and PET demand was starting to taper off, sources interest heard. The H1 December laycan was assessed at $807.50/mt
said. Upstream, tight supply in the US spot mixed xylene market kept CFR Taiwan/China, between the highest bid at $807/mt CFR Taiwan/
pricing firm at 14-month highs. Spot MX was assessed as high as Ningbo/Dalian against the lowest offer at $808/mt on the same basis.
$2.38/gal FOB USG this week and trading levels were heard as high as The above rationale applies to the following market data codes:
$2.62/gal. In production economics, the MX-PX spread ended the week “PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.
around $25/mt, a fall of $7 according to S&P Global Platts data. Market
participants typically consider a healthy spread to be around $150/mt,
but the price spread can be lower depending on the level of integration Styrene
for a producer, per market feedback.
Europe
Rationale
Friday’s three-to-30-day paraxylene assessment at $740/mt FOB USG, Offers retreat
up $5 week on week, was based on the netback to Asia, assuming Downstream contract prices stable on the week
freight costs at $60-$65/mt. October contracts were settled at 40
cents/lb, sources said. Contracts typically settle retroactively. In a dramatic reversal in fortunes, the styrene spot price fell sharply
Friday to be assessed at $965.50/mt FOB ARA, declining $39.50/mt on
the day. The styrene spot price reached a 15-week high of $1,019.50/mt
Asia
on Wednesday following the explosion at BASF’s Ludwigshafen
Jan PTA futures fall Yuan 22/mt
petrochemical complex on Monday. The 550,000 mt/year styrene
JX shuts Kashima plant Oct 20
monomer unit at the location was shut on Wednesday which led to a
surge in bids and offers mid-week. But offers retreated Friday as the
With a weaker downstream futures market outweighing the effect of a market stabilized. “The party is over,” a source said Friday, adding that
sudden plant shutdown, Asian paraxylene was assessed lower by $4.33/ BASF’s announcement that it will restart both its crackers in the
mt day on day at $783.67/mt FOB Korea and $804.67/mt CFR Taiwan/ coming few days contributed to the fall in prices. A second source said
China Friday. January purified terephthalic acid futures closed at Yuan the styrene market was “overreacting” to the developments at
4,862/mt, down Yuan 22/mt from the previous close on the Zhengzhou Ludwigshafen and that the price had to “eventually come down”.
Commodities Exchange. Selling sentiment was heightened during the Ludwigshafen’s styrene supplies are mainly for internal consumption,
day, continuing into the Platts Market on Close assessment process, so it should not have a large impact on general availability of styrene in
with numerous offers for H2 November and December cargoes, against Europe, sources said. In addition, the shut down of the 190,000 mt/
firm bids for December cargoes. In market news, Japanese PX producer year polystyrene unit at Ludwigshafen meant there would be “no extra
JX Nippon Oil & Energy is currently assessing the impact of an upstream demand” for feedstock styrene. Downstream, the polystyrene net
fire that forced the shutdown of its 500,000 mt/year PX plant at contract prices were assessed stable on the week, down Eur40/mt on
Kashima, and expects to determine the impact on supply by Tuesday or the month. The GPPS net CP was assessed at Eur1,250/mt FD NWE
Wednesday, a company source said Friday. The PX plant was shut on Wednesday. The acrylonitrile butadiene styrene net contract price was
October 20 after a fire broke out at the 21,200 b/d No. 3 reformer at the assessed at Eur1,470/mt FD NWE Wednesday stable on both the week
252,500 b/d Kashima refinery on Thursday, just as an earthquake hit the and on the month with strong demand.
area. This led the refiner to shut both the No. 3 reformer and the 63,500
b/d No. 1 condensate splitter. Although the fire broke out five to six Rationale
minutes after the earthquake, it has not yet been confirmed that the Platts assessed styrene for delivery 5-30 days forward at $970.50/mt
earthquake led to the fire, a company official said separately Friday. The FOB ARA Friday, down $39.50/mt. October was assessed at $965/mt,
other units at the refinery are operating normally. Week on week, the PX above a bid heard at $960/mt and below the lowest offer heard at
CFR Taiwan/China marker was $4.67/mt higher. $970/mt. The $10/mt contango between October and November was
carried over. November was assessed at $975/mt, down $40/mt, and
Rationale within a bid-offer range heard at $960-$990/mt.
Asian PX was assessed $4.33/mt lower day on day at $783.67/mt FOB
Korea and $804.67/mt CFR Taiwan/China Friday. The markers take the
United States
average of the third, fourth and fifth half-month forward laycans,
currently H2 November, and H1 and H2 December. Offscreen during the Sentiment bullish amid Asia demand expectations
Platts MOC assessment process, an order-cancel-order offer for H2 No major impact expected from production outages
November was seen. One offer in the OCO was $800/mt CFR Dalian, for
Asia-origin cargo, the other was at $800/mt, CFR Taiwan/Ningbo/Dalian/ October US spot styrene rose 0.65 cent week on week, assessed
Jiangyin/Xiamen/Gulei/Hainan/Zhuhai/Zhapu/Lianyungang basis on a Friday at 44.90 cents/lb ($990/mt) FOB USG amid tight supply,
maximum 25,000-dwt vessel. H2 November laycan was assessed below sources said. The November US spot styrene assessment was also
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 26
POLYMERSCAN october 26, 2016
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 27
POLYMERSCAN october 26, 2016
600
Rationale 03-Jun 01-Jul 29-Jul 26-Aug 23-Sep 21-Oct
The October US PTA price was set at 41.94 cents/lb ($915/mt), up 0.50
cent from September, according to multiple market sources. The Notes: All intermediates prices reflect assessments at close of Thursday, with the
settlement followed the settlement of the feedstock US October exception of PTA CFR China.
paraxylene contract at 40 cents/lb.
Zhengzhou Commodity Exchange but it fell later in the week to close at
Yuan 4,862/mt. A Chinese trader attributed the volatility to the futures
Asia
market correcting itself as the increase seen earlier this week was not
Chinese domestic trading active
sustainable. A major Chinese producer said that in the China domestic
Volatility observed in futures market
market this week, there was more trading observed in PTA, with more
than 20,000 mt having traded. Market sources attributed this spike in
Asian purified terephthalic acid was assessed lower by $4/mt week on trades to an increase in domestic demand for polyester as end-users
week at $607/mt CFR China Friday, tracking movement in the futures sought to get more of the product in before the year-end festivities.
market. Earlier in the week, PTA futures had moved up on the The CFR Southeast Asia and CFR India markers were both assessed
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 28
POLYMERSCAN october 26, 2016
flat week on week at $623/mt and $628/mt, respectively, in the Germany, began a 12-day scheduled maintenance on the weekend
absence of firm trades. Upstream, prices were up this week, with of October 22-23, a source close to the company said. The
paraxylene rising $4.67/mt week on week to $783.67/mt FOB Korea maintenance was not expected to affect supply.
and $804.67/mt CFR Taiwan/China Friday. In Southeast Asia, trading in
spot cargoes was thin as most of the end-users were well-covered Rationale
supply wise by contracts. Demand for PTA in Indonesia was high as European acrylonitrile spot was assessed at $1,290/mt CIF ARA
there were some plant turnarounds, according to market sources. The Tuesday, down $20 on the week. A range of indications was heard in a
Indian PTA market remained self-sufficient this week with minimal range of $1,250-$1,320/mt on various delivery basis. After normalizing
need for imports, an Indian end-user said. In plant news, China’s Hengli prices, S&P Global Platts assessed at $1,290/mt, which was seen to be
Petrochemical restarted its 2.2 million mt/year No. 2 PTA plant in Dalian the most repeatable level following softer demand.
this week. South Korea’s Hanwha Global Chemical has shut its No. 2
PTA plant in Ulsan, for two weeks in the second half of October.
United States
Rationale Falling demand, propylene pressure spot
Asian PTA was assessed lower by $4/mt week on week at $607/mt Oct Propylene CP expectations down 0.5-1 cent
CFR China, tracking movements in futures contracts on the
Zhengzhou Commodity Exchange. A one-day-trip cargo was heard The US acrylonitrile export assessment fell $5/mt week on week at
offered by a major Chinese producer at $635/mt Friday morning. $1,320-$1,330/mt FOB USG Tuesday. Fundamentally, while supply
The CFR Southeast Asia and CFR India markers were both remains tight, demand was heard decreasing this week. One
assessed flat week on week at $623/mt and $628/mt, respectively, source said ACN pricing at $1,250/mt would not be out of the
in the absence of firm trades. question given weaker demand and falling propylene pricing. Other
sources continued to talk pricing in $1,300-$$1,350/mt FOB USG
range. Feedstock propylene September contracts settled at a 6
Acrylonitrile cents/lb increase, with chemical grade at 41.5 cents/lb and polymer
grade at 43 cents/lb. October propylene contracts were nominated
earlier this month at 0.5 cent/lb decrease, with buyers pushing for
Europe
at least a 1 cent/lb decrease, sources said. Sources said tight
Fiber producers continue to struggle
acrylonitrile supply would persist into 2017, after a force majeure
Saratov ACN plant returns from maintenance
earlier this year. Ineos Nitriles declared a force majeure in mid-July,
sources said. The force majeure declaration was on ACN out of the
European acrylonitrile prices were assessed at $1,290/mt CIF ARA 450,000 mt/year Green Lake, Texas, plant in mid-July, sources with
Tuesday, down $20 on the week, as industry sources reported knowledge of operations said, and that it will remain until at least
weakening spot demand. One trader said it was currently a buyer’s through the year’s end. Ineos Nitriles is still running its Green Lake,
market, while a producer said the “heat” was out of the market Texas, ACN plant at reduced rates, sources said. A company
and that derivative outages following BASF’s force majeure at spokesman declined comment on the operational status of the
Ludwigshafen may been affected demand. Another producer said plant, citing company policy. In global markets, ACN pricing was
the contract market was doing well, and that there had been no stable to lower on the week. The CFR Far East Asia assessment fell
evident of any effect from BASF’s force majeure, adding that some $5/mt week on week to $1,370/mt, and CFR South Asia was down
producers were in the spot market to cover contractual obligations $5/mt at $1,380/mt. In Europe, CIF ARA basis assessment fell $20/
in Asia. Both producers reported strong offtake for ACN by most mt week on week and was assessed Tuesday at $1,290/mt, while
derivatives, particularly ABS, but that fiber remains the black sheep the CIF MED basis assessment remained at $1,320/mt Tuesday,
of the group. One of the sources said fiber producers were with the market remaining tight. The US acrylonitrile domestic
struggling following the delivery of cheap Chinese product to contract assessment was flat on the week, assessed at 60.75
Turkey at levels not economically viable for European plants. cents/lb delivered. The domestic assessment is a formula-based
European plants were reported to be ramping down as a result. contract price using feedstock chemical-grade propylene as well
Chinese fibers were heard offered at $1,700/mt, a $400 premium as ammonia, per market feedback. US ammonia contract prices
over European ACN prices, while a premium of $500-600/mt is settled at $230/mt, per market feedback.
typically required for the economics to make sense, depending on
the size of the plant, according to sources. The second ACN Rationale
producer said acrylic fiber is picking up slightly in Asia, however, US export acrylonitrile was assessed at $1,320-$1,330/mt FOB USG, flat
and that it would be looking to see whether Europe and the rest of on the week, based on price indications at $1,300-$1,350/mt, leaning
the world follows the Chinese movement. In supply, availability was to the higher side on tight supply. The US ACN domestic contract
boosted by the return of Lukoil’s 150,000 mt/year ACN plant in assessment was flat, assessed at 60.75 cents/lb delivered as
Saratov, Russia, while the larger of Ineos’ two lines in Cologne, chemical-grade propylene contracts settled at 41.5 cents/lb and the
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 29
POLYMERSCAN october 26, 2016
ammonia contract price settled at $230/mt. Chemical-grade propylene were also assessed flat this week and provided no new direction to
and ammonia are the key variables in the formula-derived contract EDC or VCM.
price, based on industry feedback.
United States
Asia
Feedstock ethylene prices softening
Weak demand from downstream acrylic fiber
EDC pricing stable with limited overseas demand
Feedstock propylene falls $50/mt on week
EDC: US ethylene dichloride was assessed Thursday at $215-$225/mt
The Asian acrylonitrile market was $5/mt lower week on week, with CFR FOB USG, stable week on week. No confirmed deals were heard on the
Far East Asia assessed at $1,370/mt and CFR South Asia at $1,380/mt week, with price indications heard around the last reported October
Tuesday. Upstream, feedstock costs for propylene was assessed at trading levels of $220/mt FOB USG. Sources have said that despite
$840/mt CFR China, down $50/mt from a week ago. There was a deal limited availability in the US, softening ethylene prices and weaker
heard done at $1,380/mt CFR India. Meanwhile, one downstream demand from Asia have kept prices from moving higher. Sources in
manufacturer of acrylic fiber said his company was looking to adjust the Asia indicated prices could edge higher in the coming week, tracking
operation rate to 70% next month, down from the current run rate of firmer PVC markets. In feedstocks, US ethylene prices were last
80%. He said acrylic fiber prices, at $1,650-$1,700/mt currently, were still assessed Wednesday at 29.75 cents/lb FD USG cents/lb FD for the
not catching up with the relatively high ACN prices. The source also said prompt month, down 2 cents from last Thursday. VCM: US vinyl
that there were some European cargoes being offered to Asia. But this chloride monomer prices were assessed $40/mt higher for the week
could not be confirmed directly with sellers. Thursday at $650-$660/mt FOB USG, as market participants talked
prices higher amid tightness and firming in the Asian market. Sources
Rationale have said spot deals were difficult currently because product would
The Asian ACN price was assessed $5/mt lower week on week at have to be diverted from other uses or contract buying. Export PVC
$1,380/mt CFR South Asia Tuesday. This was in line with a deal heard pricing for October was assessed Wednesday at $765-$775/mt FAS
concluded at $1,380/mt CFR India. The CFR Far East Asia price was Houston, stable week-on-week, as pricing continued to be talked in a
assessed at $1,370/mt, above the $1,350/mt buy indication. wide range, with market participants noting that pricing could vary
greatly depending on where it was being sent. The majority of market
participants talked pricing in the $760-$780/mt FAS Houston range.
Ethylene Dichloride / Vinyl Chloride Monomer
Rationale
EDC: US ethylene dichloride was assessed at $215-$225/mt FOB USG,
Europe
flat for the week, based on pricing indications at that level. VCM: US
Most market participants away
vinyl chloride monomer was assessed at $650-$660/mt, up $40 for
VCM firms in Asia
the period, with pricing indications at that level based on tightness and
higher Asian markets. VCM contracts were assessed at 35.5-36.5
European EDC and VCM prices were assessed stable on the week Thursday cents/lb delivered, stable week on week, tracking unchanged pricing in
at $230/mt FOB NWE and $590/mt FOB NWE respectively. There were no the downstream PVC contract assessment.
fresh indications heard in the market and prices in Asia, which were largely
stable, also didn’t provide any fresh direction for the market. In Asia, the
Asia
EDC marker was unchanged week on week Thursday at $252/mt CFR
Fareast Asia. The VCM assessment was made up a marginal $10/mt week VCM markets lifted by higher PVC prices
on week Thursday at $745/mt CFR Fareast Asia. Other constituents of the S Korea’s Sep EDC exports fall 30% versus Aug
chlorovinyls chain, including PVC and caustic soda, were all assessed stable
this week. Several market participants of the chain were attending the K EDC: The Asian ethylene dichloride market was stable to lower
Fair in Dusseldorf, Germany, and were therefore away from their trading Thursday. The spot market was rangebound at $250-$260/mt CFR
desks. In plant news, KemOne will shut its chlorine/caustic soda plant in Far East Asia amid sluggish trading. Downstream vinyl chloride
Lavera, France, for a conversion to electrolysis membrane technology. The monomer and PVC markets were seen to be firmer, but the Asian
plant is the source of 25% of French chlorine production and may impact EDC market remained steady in line with a stable US EDC market.
the otherwise quiet chlorovinyls chain. FOB US EDC price was assessed unchanged week on week at $220/
mt last Thursday, S&P Global Platts data showed. A producer said
Rationale EDC prices could rise, tracking firmer PVC markets this week, and
EDC and VCM FOB NWE prices were assessed flat on a lack of fresh expected offers for EDC to rise as high as $280/mt CFR FEA. In
indications. EDC tracked Asia in a quiet market and VCM was stable related news, South Korea’s EDC exports in September totaled
amid a dearth of indications. Other members of the chlorovinyl chain 17,976 mt, down 30.4% from a month earlier, and up 28.8% from a
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 30
POLYMERSCAN october 26, 2016
year earlier, according to customs data released Monday. VCM: 144.9%. In Japan, the country’s VCM exports in September fell
Sentiment in the Asian vinyl chloride monomer market firmed this 41.9% from the month before to 46,638 mt, the Vinyl Environmental
week in line with a rising downstream PVC market. On Wednesday, Council said in a statement Tuesday.
the CFR China PVC marker was assessed up $20/mt week on week
at a two-year high of $920/mt, data showed. VCM supplies in Asia Rationale
are also reported to be tight, especially in Taiwan, due to limited EDC: The CFR Far East Asia EDC marker was assessed unchanged
ethylene supplies triggered by a ethylene pipeline maintenance week on week at $252/mt Thursday. A buying idea was heard at $250/
work scheduled for November-January. Also, Taiwan VCM restarted mt CFR FEA, while a sell idea was reported at $260/mt CFR FEA. In
its 420,000 mt/year VCM plant last week after completing a planned Southeast Asia, the EDC spot price was assessed $6/mt lower at $259/
maintenance program that began in early September. Currently the mt CFR SEA. November selling ideas were heard at $260-270/mt CFR
plant is operating at 90% of capacity. In data out this week, South SEA. VCM: The CFR Far East Asia vinyl chloride monomer marker was
Korea’s VCM exports in September rose 9.2% from a month earlier assessed up $10/mt week on week at $745/mt Thursday. This week,
to 19,064 mt, according to the customs figures released Monday. some deals were reported done at $740-$750/mt CFR FEA, while an
Year on year, South Korea’s VCM exports in September were up offer was heard at $770/mt CFR FEA.
News
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 31
POLYMERSCAN october 26, 2016
Production fell 28% compared with September 2015, when the demand is expected to edge lower as fresh contract volumes are
company’s ethylene output totaled 80,961 mt, it said. Pemex uses the available for sale, a second market source said. This, combined
majority of its monomer output for the production of downstream with limited inland heating demand, is likely to see little buying
derivatives, including polyethylene grades. Pemex’s propylene output interest beyond contracted volumes for the first November half,
totaled 998 mt in September, down 9% from August, it said. The although this could change into the second half of the month as
company’s output fell 15% compared with September 2015, when termed volumes are drawn down. According to the first source,
production totaled 1,170 mt. The production level was the lowest output market participants were currently also waiting for German
for the year. Pemex uses the majority of its production of the monomer November inland contract prices to settle and Rhine water levels to
for downstream derivatives, including the production of acrylonitrile. improve. Market participants expect this contract price to increase
by up to $50/mt and accordingly ARA propane to become more
ARA propane barge spot buying to stay thin attractive relative to product from German refineries. In addition,
increasing Rhine levels could see more propane barges finding
to second half November: sources their way inland from the ARA region. Rhine water levels were 104
London — Spot demand for propane barges loading in the cm Wednesday at Kaub, Germany, up 8 cm on the day and 32 cm
Amsterdam-Rotterdam-Antwerp region is not expected to rise on the week. Low Rhine levels have recently further hampered
significantly before the second half of November, market sources demand for propane barges loading in the ARA region as they
said. “Propane barge demand is zero,” one market participant said could not be fully loaded, thus increasing freight costs. Propane
Tuesday. This comes as buyers remained mostly on the sidelines barges were assessed at $331/mt FOB ARA Tuesday, up $1/mt on
with termed volumes mainly deemed sufficient to meet the day and $38/mt below the propane large cargoes CIF
requirements for now. “For now, term contracts will cover. Reckon Northwest Europe, stable on the day. This is the steepest discount
[second half of November] to see some spot demand,” the market to the propane large cargoes since August 24 when it was $66/mt,
source said. For the first half of the new month, however, spot S&P Global Platts data showed.
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POLYMERSCAN october 26, 2016
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