US PROPYLENE Prices for PGP and RGP stagnated the week ending June 11, a trend expected to continue as the summer months tend to see…
Jun 14, 2021
Prices for PGP and RGP stagnated the week ending June 11, a trend expected to continue as the summer months tend to see less market activity.
Ongoing maintenance on Dow’s propane dehydrogenation unit and low inventories may contribute to more seasonal demand that usual, and keep prices in balance, even as trading activity remains thin.
US spot export polyvinyl chloride prices were expected to remain rangebound the week of June 14 amid upstream chlor-alkali tightness. Westlake Chemical on June 9 announced its third force majeure on chlor-alkali products since mid-May on chlorine, hydrochloric acid and caustic soda produced at its 75,000 mt/year chlor-alkali unit in Longview, Washington, because a critical piece of electrical equipment failed. Market sources said that force majeure would likely affect US West Coast customers. US chlorine supply was seen tight overall amid strong demand for products made with it, including PVC, as well as higher water treatment demand. Public swimming pools and water parks that were shut in 2020 amid the coronavirus pandemic were open in regions with widespread COVID-19 vaccinations in 2021, increasing water treatment demand year over year. PVC supply remained tight, with two of three force majeures declared during a deep freeze in mid-February still in effect.
It remained unclear Monday whether US benzene prices would continue with a downward trend for the week of June 14. Prices fell 18 cents/gal the week of June 7 due to a global bearish sentiment. However, Asian prices were slightly stronger June 14 and US traders said the week started out with little immediate direction. S&P Global Platts Analytics is projecting global aromatics to remain weak to due to increased availability of materials following refinery restarts in the US and Europe.
Increased trading caused a price increase the week ending June 11, though without continued trading the price is not expected to stay at current levels. Traded values increased from 102 to 109 over a three day period, but with no corresponding increases to offer levels, which stayed consistent throughout the same period. As the market continues to anticipate the start up of the YCI Methanol One Facility, further price increases are not expected. In the US MTBE market, prices were poised to remain stable, with weaker prices having been seen during the week prior on healthy supply driven by favorable production margins. Export demand to Mexico could add some support to spot prices, if flows begin to increase on higher blending demand and favorable economics for MTBE versus other octane-boosting blending components.
Mar 16, 2021
Delivered at S&P Global Platts Virtual London Energy Forum, gain unique insight into where the outlook for Petrochemicals.
Jun 14, 2021
South Korea’s PVC exports in May fell 35.9% from a month earlier to hit a multi-year low of 23,842 mt, dragged down by weak demand in India, the most recent data by Korea Customs showed.
South Korea’s PVC exports to India in May sank 66% from April to a one-year low of 6,636 mt, the data showed.
Market sources said South Korea’s PVC exports would likely come down in the coming months, with demand still bearish.
PVC offers in Asia for July are expected to fall by at least $100/mt from June, reflecting bearish demand. For June, offers were announced at $1,520/mt CFR India, down $150/mt from May, industry sources said.
India’s PVC demand weakened in the second quarter as several cities were locked down amid surging COVID-19 cases. In line with weak demand, CFR India PVC prices started to fall at the end of April, after hitting a record high of $1,670/mt in March, according to S&P Global Platts data.
On June 9, the CFR India PVC price fell $20/mt week on week to be assessed at a four-month low of $1,440/mt, Platts data showed.
Jun 08, 2021
Polymerscan is a weekly market report for the global plastic and resin marketplace, specifically designed to help those involved in trading, buying or selling polymers. The report provides you with online and mobile access to the latest worldwide polymer prices, news, and closing market price assessments.
Aug 14, 2020
— Daily access to over 200 global term and spot polymer price assessments so that you’re always up to date with the latest plastic prices, including: LDPE, LLDPE, polypropylene, polystyrene, PVC and the HDPE price
— Enables producers, consumers, and traders to track polymer production margins and gauge demand and supply balances
— Access to our specialists: A subscription to Polymerscan gives you direct access to our editorial team. If you have a question relating to our polymer prices or simply need market insight, our dedicated team is here to help
— Helps your sales teams visualize trends and act on opportunities using the informative polymer pricing charts depicting historic and current polymer market activity
— Stay connected to the latest price changes and market news from your desktop, tablet or smartphone
Weekly access to over 200 global term and spot polymer price assessments including:
— Polymers: LDPE, HDPE, LLDPE, PP, PS, PVC and ABS, PET;
— Polymer Feedstocks:
• Olefins: Ethylene, Ethylene Glycol, Propylene, Butadiene;
• Aromatics: Paraxylene, Styrene;
• Intermediates: Purified Terephthalic Acid, Acrylonitrile, Ethylene Dichloride, Vinyl Chloride Monomer
Apr 28, 2021
After an uncharacteristically tight first half, benzene supply in the US and Europe is expected to return to normalcy in the second half of 2021,…
May 25, 2021
After an uncharacteristically tight first half, benzene supply in the US and Europe is expected to return to normalcy in the second half of 2021, easing demand for Asian cargoes.
In the US, limited imports from South Korea and lower-than-typical refinery operating rates suppressed US benzene inventory even before the mid-February winter storm knocked out more than 4.6 million b/d of refining capacity in Texas and Louisiana.
The interruptions to supply in the US, as well as limited Asian material, disrupted flow towards Europe, while a steeply backwardated market, firm Chinese demand and limited vessel availability has limited Asian exports to Europe and the US in first half of 2021.
But as the market backwardation eases around summer and a greater number of cargoes become available globally, European benzene consumers are expecting more product to arrive in Europe and cover the shorts.
The shortage could also be expected to ease as capacities return to production after maintenance works at ExxonMobil Chemical units in Botlek at the Rotterdam area in the Netherlands, generating product for restocking.
US supply should increase around July as South Korean benzene cargoes begin to arrive in greater numbers in the USGC. The volume of benzene that loaded in South Korea bound for US shores over May 1-10 was roughly equal to that which loaded in all of April, according to KITA data, and the US is expected to overtake China in May overall as the biggest importer of South Korean benzene.
Domestic US production is also expected to increase, sources said. COVID-19 vaccinations, the summer driving season and improving air travel demand provide incentives to US refineries to increase rates for gasoline, jet fuel and middle distillates production.
With incredible benzene margins in H1, producers in Asia had been heard running at high rates to maximize profit, leading to a rise in export volumes from Asian countries. Benzene-naphtha spreads in Asia averaged $240/mt between January and April, and briefly touched a high of $475/mt mid-April.
In contrast, at the January-April average of $224/mt for the paraxylene-naphtha spread, producers shifted focus to benzene production and sales. Prices in Europe and the US were higher than in Asia, drawing Asian parcels towards the Americas and through the Suez Canal towards Europe. This helped to ease the tightness in supply there.
With supply returning gradually, the fate of margins in Asia remain uncertain in H2, with the possibility that benzene will retain its strength from H1, sources said.
“The pace of local demand recovery is likely to rapidly accelerate over the next six months in the West,” Platts Analytics wrote in an April report. Net refinery utilization rates could reach roughly 95% in mid-summer, they forecast.
But market participants were uncertain whether such additions would be enough to suppress prices amid robust demand from various value chains downstream to benzene with strong post-pandemic recovery in US manufacturing sectors. Nor are styrene producers expected to cut rates to any significant levels, and no US SM unit turnarounds are planned through the remainder of 2021.
Demand from downstream products such as styrene and phenol is expected to remain healthy. Receding coronavirus cases and progression of vaccination programs offer glimmers of hope for easing lockdowns across Europe, supporting further demand for benzene and its derivatives. A boost in summer driving would also mean that refineries may ramp up production of road fuels, and increase benzene feedstock availability.
Physical demand for styrene was expected to be steady to stronger in the second half of the year, but a reduction in SM imports from the US may put pressure on benzene prices, a source said.
“New capacity for styrene in Asia means there’ll be a big pull on benzene,” a trader said.
China’s downstream capacity additions have seen both delays and start-ups to date in 2021, which has increased demand for benzene particularly in South China where commercial storage is not widely used. At the same time, an excess of benzene supply is expected from integrated refineries in China whose styrene unit startups have been delayed to 2022.
Previously, as cargoes were sold ex-Asia, there was a reduction in available cargoes for Asian buyers and end-users in Asia were disgruntled by the sharp hike in prices, with the FOB Korea benchmark reaching fresh 7-year highs multiple times in April and May.
Bids and offers in CFR Asia markets saw wide bid-offer gaps, with sellers contemplating delivered prices across the world, while CFR Asia buyers are faced with spot offers almost tenfold higher than 2021 term contract benzene prices.
“It’s difficult for buyers in Asia to stomach such a huge jump in cost for reasons not pertaining to Asia,” one buyer said, adding that prices would eventually have to normalize in H2 across the styrenics chain. Many sources said that the situation in H1 was circumstantial and was unlikely to be the norm going forward.
Total’s new joint-venture 1 million mt/year cracker in Texas was progressing with its lengthy startup June 11 after construction was completed in the first quarter…
Jun 11, 2021
Total’s new joint-venture 1 million mt/year cracker in Texas was progressing with its lengthy startup June 11 after construction was completed in the first quarter of 2021, according to a flaring notice on a community hotline and sources familiar with company operations.
The Baystar cracker in Port Arthur, a joint venture of France’s Total and Austria’s Borealis, reported flaring late June 10 to the Southeast Texas Alerting Network, a community hotline intended to alert nearby residents of routing flaring, upsets and other issues affecting petrochemical plants and refineries.
“Operations require flaring,” the notice said. Flaring, or burning of excess gases, is routine during plant startups.
The cracker will supply Total and Borealis’ joint-venture 400,000 mt/year polyethylene plant near the mouth of the Houston Ship Channel, and an adjacent 625,000 mt/year PE unit under construction with startup expected in Q1 2022.
A source familiar with Baystar’s operations confirmed June 11 that the startup process was ongoing, with production expected in 3Q 2021, “which is their original announcement – no game change here.”
Another source familiar with company operations said Total had just begun introducing feedstock to the cracker, which is the first step in a new plant startup.
The company did not immediately respond to a request for comment.
The Baystar joint venture, which originally included Canada’s NOVA Chemicals, broke ground on the new cracker in 2018, and construction began on the new PE unit in 2019.
Borealis bought NOVA’s interest in the joint venture in 2020.
The US now has about 40 million mt/year of ethylene capacity, and 10.68 million mt/year, or more than one-fourth, has been added since 2017.
The new Baystar cracker is part of 8.3 million mt/year of additional ethylene capacity under construction or planned for 2021 and beyond, according to company announcements.
Market sentiment is generally bearish for the Asian purified terephthalic acid, or PTA, market due to new capacity expansions in China lined up towards the…
May 24, 2021
Market sentiment is generally bearish for the Asian purified terephthalic acid, or PTA, market due to new capacity expansions in China lined up towards the second half of 2021 — which is putting pressure on both domestic and international prices — and an uncertain demand outlook.
The demand outlook for H2 remains unclear amid new waves of the coronavirus infection in Asia, especially in India, with bottlenecks created by global logistics challenges arising from container shortages.
Despite the bearish PTA outlook, some market players are pinning their hopes on potential run-rate adjustments and capacity normalizations in China, while the effective vaccine rollout may control the pandemic and create some price support in H2.
A total of 6.6 million mt/year new PTA capacity is expected to come online in China in H2. China’s Yisheng Petrochemical will operate the two new PTA lines which have a capacity of 3.3 million mt/year each, with one unit expected to start in July, while the other may come online around end-2021, sources close to the company said.
This is in addition to 4.9 million mt/year new Chinese PTA capacity added in the first quarter of 2021, and earlier expansion of 7.2 million mt/year in 2020.
Such intensive expansion dragged Chinese PTA profit margins into negative territory towards end-2020 and will likely persist in H2, sources said.
The PTA/PX spread averaged around Yuan 335/mt (around $52/mt) from January to May 12 for China domestic PTA cargoes, below the typical Yuan 500-700/mt breakeven level, Platts data showed.
The PTA/PX spread averaged around $93.66/mt for dollar-denominated cargoes over the same period, with dollar-denominated PTA prices partially supported by international supply tightness outside China in early 2021. Although this spread is near the typical breakeven level for Asian PTA producers, the expensive co-feedstock cost of acetic acid has put pressure on many manufacturers.
PTA profit margins are generally on a downtrend, which is likely to be further squeezed in H2, though it could improve occasionally with shifts in short-term demand-supply fundamentals, a China-based PTA producer said.
Although there is a lack of fundamental price support for PTA, the absolute price movement depends on upstream paraxylene and oil prices in H2, a trader said.
Trade participants hope the overall Chinese PTA operation rate will either be adjusted lower or less competitive plants will be shut, after which the industry can cope with the mega expansion and squeezed profit margins.
However, capacity rationalization is a longer-term phenomenon and is unlikely to create a large-scale change in production in H2, sources said. A total of around 4 million mt/year Chinese PTA capacity has been shut since end-2020 due to various reasons and is likely to remain shut in the near future, they added.
Trade participants are closely monitoring Indian demand amid the second wave of the coronavirus pandemic, since India became the biggest Asian PTA importer around end-2020 after China achieved self-sufficiency.
In India, the timeline for demand recovery along the polyester chain is unclear, although market participants hope that the COVID-19 situation will improve around mid-June.
Normalization of trade activity and demand recovery may slip into H2 even if COVID-19 cases reduce in response to stringent lockdowns by Indian states, sources said.
India’s new wave of the infection has disrupted supply chains and manpower availability, and even though the manufacturing sector has been allowed to operate during the lockdown, it may take some time for the country to get back on track.
Indian domestic PTA supply is expected to tighten once the demand revives in H2, sources said. This could lead to import demand within India, but unavailability of containers and expensive freight are likely to dampen that demand.
Besides the uncertain demand from India, the outlook for Asian PTA highly depends on the progress of China’s new PTA startups, potential capacity rationalization and how much China plans to export in H2 2021, two Asia-based producers said.
China’s PTA exports hit consecutive records in February and March at 196,592 mt and 338,675 mt, respectively, much higher than the monthly average of 70,565 mt in 2020, China customs data showed.
Global PTA markets are projected to remain oversupplied throughout 2021, leading to prices falling closer to just breakeven levels. Summer demand might provide support from PET sector, however, the polyester chain is only expected to reach peak demand in Q4,” Platts Analytics said. “Globally about 30% of PTA is consumed by PET while fibers constituent 65%.”
It is not easy to compete with competitively priced Chinese PTA cargoes for exports unless there are freight and tax advantages, a manufacturer said.
In the rest of Asia, South Korean PTA exporters will continue to target the European and Turkish markets, capitalizing on advantages of their Free Trade Agreements with these countries, while Taiwanese producers are actively exploring options to diversify exports.
Navigator Gas expects ethylene exports from its joint-venture terminal along the Houston Ship Channel to reach its nameplate capacity of 1 million mt/year through the…
Jun 11, 2021
Navigator Gas expects ethylene exports from its joint-venture terminal along the Houston Ship Channel to reach its nameplate capacity of 1 million mt/year through the rest of 2021 after operational issues and fallout from a deep freeze in February hindered outflows, Executive Chairman David Butters said June 11.
The terminal, operated by 50% partner Enterprise Products Partners, reached that top capacity in December upon completion of an on-site refrigerated storage tank. The terminal shipped out its first cargo in January 2020, and had operated at a lesser level until the tank was completed.
However, Enterprise in early February had to shut a pipeline that moves ethylene from its Mont Belvieu, Texas, underground storage cavern to the terminal, forcing an operational shutdown and a declaration of force majeure, Deans said.
“Our tightly scheduled ethylene vessels experienced complete disruption,” Butters said during Navigator’s fiscal Q1 2021 earnings call.
In addition, sustained subfreezing temperatures hit the US Gulf Coast in mid-February, forcing weeks-long shutdowns of more than 71% of US ethylene capacity. US ethylene prices spiked as producers slowly brought crackers back online, closing arbitrage opportunities for exports.
Prompt FD Mont Belvieu and FD Choctaw prices hit a 2021 high of 64.25 cents/lb and 68 cents/lb, respectively, on April 16, S&P Global Platts data showed. Prices have since declined and were assessed June 10 at 26.375 cents/lb FD Mont Belvieu and 27 cents/lb FD Choctaw. The FOB USG ethylene price reached 53.797 cents/lb on June 1, but was assessed at 47.718 cents/lb on June 10, Platts data showed.
“Since the end of March, conditions have gradually improved, suggesting that we may still be entering into an environment more characteristic of those prevailing at the end of last year and the beginning of this year,” Butters said.
CEO Henry Deans said the pipeline outage-related force majeure and subsequent deep freeze in February pressured export volumes on ethylene arbitrage. However, plentiful US supply of cheap ethane feedstock, “coupled with overcapacity and the efficient ethylene market” has ensured product is “placed to move,” he said, noting arbitrage to Europe and Asia has reopened.
“Our Morgan’s Point ethylene terminal has now restarted and is ramping up throughput,” Deans said. ‘We expect June’s export volumes to be close to those of January 2021. And we anticipate exports for the remainder of the year to be at nameplate capacity of 1 million tons per annum.”
The partners were “looking forward” to running the terminal at full rates to see if they can push output past the 10% of additional incremental capacity already deemed reachable, he added.
However, Deans said the partners want to push the terminal’s output to its full nameplate capacity first.
‘The best debottleneck is a free one,” he said. “We’re constantly in discussions about plans for the future for that terminal. But what we need to do now is actually sweat the asset and see it run reliably.”
One of the key factors determining how mixed xylenes will fare globally in the second half of 2021 is the ongoing increase in downstream paraxylene…
May 24, 2021
One of the key factors determining how mixed xylenes will fare globally in the second half of 2021 is the ongoing increase in downstream paraxylene capacity, mainly in Asia.
As Asia’s isomer-grade mixed xylene market moves into the second half of the year, the short supply in the second quarter may ease as MX units in Japan return to production after maintenance, market participants said this month.
However, key end-users such as Taiwan’s Formosa Chemicals & Fiber Corp., or FCFC, as well South Korea’s Lotte Chemical, are scheduled to shut their aromatic plants — capable of producing PX, benzene and orthoxylene — for maintenance, thus shrinking demand for isomer-MX as both companies are large end-users of the feedstock.
FCFC plans to shut its No. 2 aromatics complex at Mailiao in July for about 45 days of maintenance, while its largest No. 3 aromatics plant will shut for 20-30 days in October, S&P Global Platts reported. Lotte plans to shut both its aromatics plants in Ulsan for about 35 days of maintenance over October-November.
Meanwhile, downstream paraxylene will be impacted by the phase two start up of China’s Zhejiang Petrochemical, which will add about 2.5 million mt/year of PX from June onwards, followed by another 2.5 million mt/year in Q3.
The addition of such a substantial capacity is likely to weigh on PX, and affect isomer-MX prices and margins, market sources said in May.
A Northeast Asian PX producer was concerned about the increasing PX supply, adding that it might result in lower runs for his PX plant, and by extension lower MX demand.
“But new purified terephthalic acid capacity is huge as well. And if global demand gets better in the second half of the year, then maybe [the supply increase is] not a big issue,” a source with a Chinese PX producer said.
Meanwhile, Indian demand, which favors solvent-MX over isomer-MX, is highly uncertain through the second-half, as the country continues to battle a severe wave of the coronavirus.
Europe’s MX markets have their eyes focused on PX for the second half of the year on hopes of fresh demand following the restart of downstream PTA units from maintenance.
Any increase in the continent’s MX demand in the second half will hinge on higher PX production rates and a ramp up in driving activity, which may pull MX into the gasoline blend pool. This year, chemical demand has been subdued, due to PX plant outages, while MX blend values were far less competitive than components such as reformate or MTBE.
As a result, spot market activity has been muted, with producers also limiting supply.
“There were too many PTA turnarounds that are expected to end soon. If PTA is back, the xylenes length will disappear,” a seller said.
Peak PTA demand is expected from July to September, when polyethylene terephthalate, or PET, production should ramp up, a trader added.
The European MX market was also expected to see an increase in demand from the gasoline blend pool in H2, especially during the summer driving season as vaccination programs in Europe continue.
Demand for MX in gasoline blending may also increase due to shipments to the US, where demand is expected to rise given new regulations around greater volume of aromatics in gasoline blends.
In the second half, MX will be well-supplied in the US Gulf Coast, despite planned turnaround and reformer shutdowns tied to the mid-February Texas freeze and subsequent power outages that limited producers’ output.
Net refinery utilization in the US dipped during the winter storm, but rebounded to 86.5% of US capacity in May, just under pre-pandemic levels. Run rates could reach near 95% by mid-summer, according to S&P Global Platts Analytics’ forecast.
In addition, sharp increases in spot benzene prices greatly improved the economics of toluene disproportionation, introducing more MX as by-product into the US supply. Widespread downstream demand and supply squeezes have led to a bullish outlook for US benzene through 2021.
Meanwhile, demand from downstream PX producers will depend in part on the supply recovery of US acetic acid, which had earlier been curtailed by the Texas freeze.
“The PET/PTA supply chain is having trouble securing acetic acid, which is affecting PX demand and operating rates, and therefore demand for MX,” one market participant said.
Increasing global PX capacity that has weighed on prices and margins will continue to limit demand for feedstock MX, so long as it remains cheaper to import PX into the US Atlantic Coast than to purchase, ship and process USGC MX. PX imports from the Middle East and other regions in Q1 matched the volumes that arrived in the latter half of 2020.
While fundamentals going into the summer paint a bearish-to-stable picture, the annual wild card of Atlantic hurricane season may shake up market dynamics and introduce volatility.