The European ethylene and propylene markets rallied in January after an unusually strong December. In this episode of the Commodities Focus podcast, Abdulaziz Ehtaiba and…
Jan 28, 2021
The European ethylene and propylene markets rallied in January after an unusually strong December. In this episode of the Commodities Focus podcast, Abdulaziz Ehtaiba and Miguel Cambeiro discuss the drivers behind supply shortages in the market and their impact on downstream derivatives, whilst Callum Colford provides insight into what has been going on in the increasingly bearish butadiene markets.
Feb 18, 2021
Bad weather on the US Gulf Coast and a rise in crude oil prices has added to volatility in the European naphtha paper market — belying more balanced physical fundamentals — while export demand for European gasoline has shot up.
S&P Global Platts reporters Evridiki Dimitriadou and Joseph McDonnel discuss the market with Francesco Di Salvo.
Feb 26, 2021
US demand for recycled plastic bottles has risen steadily in recent years to meet ambitious company and state government goals.
However, recycling rates have held flat for the past decade, and even fell by a percentage point in 2019, according to the latest data released by the National Association for PET Container Resources (NAPCOR).
According to NAPCOR’s annual recycling report, PET bottles were recycled in the US at a rate of 27.9% in 2019, down slightly from 28.9% in 2018. This means that out of the 6.4 billion pounds of PET resin used in US bottles and available for recycling in 2019, only 1.77 billion pounds were collected. Plastic bottles are made with polyethylene terephthalate (PET), a highly recyclable plastic resin.
In response to ever-increasing consumer and investor scrutiny over the environmental impacts of plastic packaging, several companies and brand houses have announced commitments to incorporate minimum percentages, commonly 25%, of post-consumer recycled plastic, or PCR, in their packaging by 2025.
Some large beverage companies have even more ambitious PCR goals. For example, Nestle Waters has pledged to use 50% recycled PET across their domestic portfolio by 2025, while Coca-Cola has aimed to use at least 50% recycled material by 2030.
But according to a 2019 report by the Recycling Partnership, there is an annual gap of more than one billion pounds between current US supply and projected 2025 demand for R-PET for use in bottles.
“I think it’s fair to say that we’ve not made progress in a decade in actually increasing the recycling rate,” said NAPCOR Executive Director Darrel Collier. “Though we certainly have not lost during that period.”
The total 2019 recycling rate for North America was higher at 35%, NAPCOR figures show.
Although the US recycling rate appears stagnant, it’s important to note that since the implementation of China’s National Sword policy in 2018, which essentially banned all scrap plastic imports into China, more material is being processed domestically by reclaimers than ever before.
Back in 2009, the US exported 800-850 million pounds in bottles, and domestically processed about 600-650 million pounds, according to Collier. In comparison, the US exported only 139 million pounds of bottles in 2019 and domestically processed nearly 1.6 billion pounds.
“We’ve essentially replaced exporting with processing within the US and by US reclaimers,” said Collier. “And to me, that is the most important message.”
In addition, the amount of available PET bottles on shelves has grown significantly in the last decade, particularly in the bottled water sector, prompting stagnation in the recycling rate as collection capacity tries to keep up.
California legislatures passed Assembly Bill 739 in September 2020, becoming the first US state to legally mandate the use of recycled content in packaging. The bill implements a tiered plan requiring all plastic beverage containers under the state’s redemption program to contain a specified amount of PCR, starting with a minimum of 15% by 2022. The mandate would increase to 25% in 2025 and 50% in 2030.
Although the market has anticipated this upcoming surge in demand for the last couple of years, high-quality feedstock supply remains limited. This is because recycling markets do not follow typical supply-demand trends as consumers directly control the supply of recycled material, with commodity values having little to no influence over behavior. Meanwhile, municipalities or local governments control how that supply is collected and how it enters the value chain.
“R-PET is a finite resource that is completely price inelastic,” said a California reclaimer. “A 30% increase in price does not equate to 30% increase in volume.”
Almost half of US residents find it difficult to recycle due to underdeveloped residential curbside services, lack of recycling equipment, or ignorance of proper recycling methods. Often, residential curbside collection services are governed by city, county or other local governments and funded with taxpayer dollars, leaving those services subject to disruption or cancellation when municipal budgets tighten.
Even the plastic items that are collected might not find their way into new packaging due to high contamination levels, which can occur when non-compatible plastics are mixed or when containers still have high levels of food residue.
“You can say you want 25% all you want, but if you don’t have the raw material, you’re not going to get there,” said Collier.
The NAPCOR report also showed significant changes in end-market demand. Most notably, the bottle sector grew approximately 40% from 2017 to 2019. Now, 35% of all R-PET molecules are going into either food or non-food bottles.
Recycled fiber, used in textile production, remains the dominant end market, absorbing 41% of all R-PET molecules though the category only grew by one percent from 2018 to 2019. Growth in the strapping markets was down by the same amount year-on-year. Polyester strapping is a tape-like material used primarily for bundling products together or for securing loads for transport and storage.
Although demand improvement in the bottle sector is encouraging, these end markets are still competing for the same limited feedstock supply: PET bottles.
“A lot of people say, ‘Well, we can meet some of these minimum content standards in bottles by just taking away from the fiber business,'” Collier said. “I’m telling you that isn’t going to happen.”
In addition, R-PET usage in the PET thermoform and sheet markets fell 16% in the same timeframe, though more thermoforms were collected in 2019 than ever before, with 144 million pounds collected.
PET thermoforms include any rigid, non-bottle packaging such as clamshells (often used in produce packaging), cups, boxes, trays, and lids. These plastic items often pose many mechanical and technical challenges to reclamation and material recovery facilities (MRFs) due to the inclusion of non-recyclable labels, variations in shapes and sizes, lower intrinsic viscosity levels, and look-alike packages that are made of non-PET plastics.
However, market participants say that many of these problems can easily be addressed with standardized packaging designs and proper sorting equipment. NAPCOR and other industry organizations, such as the Association of Plastic Recyclers (APR), have been largely focusing their efforts on developing the technology and guidelines that will allow for more thermoform recycling.
“We collect 144 million pounds out of a 1.4 billion-pound market,” said Collier. “That’s a lot of usable molecules going into landfills and we cannot afford to continue that.”
It is widely recognized that major infrastructure investments across the recycling value chain are needed to capture every PET molecule moving through the recycling system.
“To meet a nationwide 25% content standard, we’d have to collect over 50% of our bottles versus the 30% we have today,” he added. “And an investment of nearly $1 billion is needed on the reclaimer side alone.”
Such investments include hiring more waste collectors, installing advanced sorting and washing technology to be able to process a wider range of potential feedstocks, expanding processing capacities, and redesigning packaging to be more recyclable.
However, there is much debate over where this investment should come from, e.g. federal or state governments, brand owners, or consumers.
For example, in early February, legislators in nine states across the US announced plans of a coordinated effort to push for extended producer responsibility policies in Congress.
Extended producer responsibility (EPR) is a fee-based strategy that places end-of-life responsibilities, such as environmental and recycling costs, onto the producers of plastic packaging.
While product stewardship in some form is widely accepted by the industry, many market participants are hesitant to endorse EPRs as many believe it would divert focus away from more familiar and effective practices.
“My worry is that people are going for an EPR model, when we need to focus on content mandates,” said a West Coast source. “You can’t suddenly introduce a new system or you end up retrogressing.”
One such practice is the implementation of deposit schemes via state bottle bills with the aim of adding monetary value to plastic waste by imposing a refundable deposit, usually 5-10 cents, on PET beverage bottles.
Ten US states plus Guam currently have bottle bills, though legislation to add more, both at a state and federal level, has been proposed by lawmakers in recent years.
In fact, an influx of recycling-centric legislation has swept Congress since 2019. Most recently in December 2020, former president Trump signed the Save Our Seas 2.0 Act into public law, which allots a total of $65 million in grants to improve recycling and waste interception infrastructure.
However, despite recent congressional efforts, some market participants believe there is still a disparity between legislative initiatives and actual on-the-ground needs.
“You can establish EPRs, you can establish minimum content laws, but if you don’t marry them to some mechanism to improve collection, you’re not making progress,” said Collier.
It’s unclear how COVID-19 disruptions impacted recycling rates in 2020, Collier said, given the volatility in supply and prices seen throughout the year.
“It’s a funny thing, but I don’t think 2020 numbers are going to change too much. But that’s a pure guess,” he said.
Looking further ahead into 2021, demand for R-PET from the virgin PET market will increase due to snug virgin resin capacity and as more resin producers face mounting pressure to offer “more sustainable” PET blends.
Additionally, many manufacturers that switched to cheap virgin PET resin in mid-2020 are returning to its recycled counterpart for feedstock now that domestic virgin prices have risen 17% since hitting a record-low in June 2020.
But with more players than ever turning to R-PET before system-wide changes and investments can occur, market participants fear such pressure on already-limited supply will cause feedstock prices to surge.
“Unless collection is increased, high-quality PET bottle bales will be bid higher to meet 25% commitments,” said Rob Stier of S&P Global Platts Analytics. “The storyline will be higher bale prices at MRFs, less flake available and higher food-grade pellet prices relative to virgin PET over the next few years.”
Overall, experts agree that the only way to achieve a circular economy is to bridge the ever-growing supply-demand gap through the commoditization of waste and by investing in the entire recycling chain, from the collection of recyclables all the way down to end markets.
“As you establish value for waste material, you’ll also solve a lot of the pollution problems,” concluded Collier. “PET has such a good story compared to alternatives like glass or aluminum. PET is the right material so it’s a story we have to keep telling.”
The global olefins/polymers market will continue to face challenges in H1 2021. Fresh supplies will be available in Asia in line with planned capacity expansions,…
Feb 16, 2021
The global olefins/polymers market will continue to face challenges in H1 2021. Fresh supplies will be available in Asia in line with planned capacity expansions, while bullish naphtha feedstock prices put pressure on petrochemical margins.
Petrochemical demand started recovering in H2 2020, but the impact from the COVID-19 pandemic lingers. S&P Global Platts examines the outlook for the global olefins/polymers markets for the first half of this year.
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
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Weekly access to over 200 global term and spot polymer price assessments including:
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The global styrene market has risen sharply in February, driven by a number of factors around the world, including production issues in Europe and severe…
Feb 25, 2021
The global styrene market has risen sharply in February, driven by a number of factors around the world, including production issues in Europe and severe winter storms in Texas.
Matthew Cook, associate editorial director for Americas petrochemicals coverage for S&P Global Platts, discusses the recent trends with Platts editors Simon Price in London, Emily Burleson in Houston and Tess Tseng in Singapore.
2021: A new paradigm for petrochemical markets Asian Petrochemicals Markets Virtual Conference is the leading discussion point for key market players from the feedstock, petrochemicals…
Mar 25, 2021
Asian Petrochemicals Markets Virtual Conference is the leading discussion point for key market players from the feedstock, petrochemicals and trading communities to hear from 20 of the world’s foremost experts who will dissect the biggest topics affecting the industry, including feedstock diversity, new players, emerging markets, and changing product demand and supply.
Asian Petrochemicals Markets Virtual Conference Topic Areas:
– Sustainability, recycling and waste reuse
– Rise of mega refineries and integration with petrochemicals
– The impact of Covid-19
– Impact of consumer backlash against plastics
– The impact of covid-19 on trade flow dynamics
– New developments in aromatics and olefins
– Sustainability, recycling and waste reuse
– Rise of mega refineries and integration with petrochemicals
– Impact of consumer backlash against plastics
– Emerging sectors and new players driving the petrochemical market growth
– Trade and financial derivatives – new assessments and benchmarks
Houston — Texas petrochemical producers continued on March 1 restart efforts at plants shut during sustained sub-freezing temperatures the week of Feb. 15, with much…
Mar 01, 2021
“It’s going to be a while” before production chains resume normal output, a market source said, noting that inspections involve a process of discovery “to determine if everything is okay.”
Multiple sources noted that process has been deliberate given the sheer magnitude of pipes and equipment exposed to frigid temperatures that rarely hit the region for at least 72 hours straight as they did the week of Feb. 15.
“Many complexes are interdependent operations, so they have to start up sequentially,” a source noted. If one unit in such a production chain is unable to restart at the same time, others have to wait.
“It is what it is and you’ve got to be patient,” the source added.
At its height, the freeze took about 75% of 40 million mt/year of US ethylene capacity offline, with the vast majority along the Texas Coast. Some has resumed operations, while others remain shut amid inspections or have faced ups and downs during restart efforts, market sources said.
Prompt FD Mont Belvieu ethylene prices have risen 40% since Feb. 16, and prompt FD Choctaw ethylene prices have climbed 29% since that date, S&P Global Platts data showed.
Here is a rundown of the fallout from the freeze:
**Dow Chemical: Declared Feb. 19, on 2-ethylhexanol and butanol products from its Texas City, Texas complex
**Formosa Plastics USA: Declared Feb. 19 on US polyethylene
**BASF: Declared Feb. 19 on dioctyl terephthalate (DOTP), a plasticizer, at its Pasadena, Texas, site
**Westlake Chemical: Declared Feb. 19 on US caustic soda, chlorine, PVC and VCM; company has 2.9 million mt/year of US caustic soda capacity, more than 2 million mt/year of PVC capacity, 2.6 million mt/year of VCM; more than 2.26 million mt/year of chlorine capacity at five affected sites
**Formosa Plastics USA: Declared Feb. 18 on US PVC, 1.3 million mt/year of capacity at Point Comfort, Texas, and Baton Rouge, Louisiana, complexes.
**Dow Chemical: Declared Feb. 18 on multiple intermediate chemicals produced at plants in Deer Park, Freeport, Texas City and Bayport Texas, Hahnville, Louisiana, and Louisville, Kentucky; declaration includes vinyl acetate monomer (VAM), methyl methacrylate (MMA), glacial methacrylic acid (GMAA), butyl methacrylate (BMA), glycidyl methacrylate (GMA), 2-ethylhexyl Acrylate (2EHA), butyl acrylate (BA), and others; Dow informed South American customers
**Celanese: Declared force majeure Feb. 18 on multiple intermediate chemicals normally sold to customers in the US, Europe and the Middle East, including acetic acid, VAM, ethyl acetate and ethylene vinyl acetate (EVA)
**Total: Declared Feb. 17 on polypropylene produced at its 1.15 million mt/year La Porte, Texas, facility
**Formosa Plastics USA: Declared Feb. 17 on all chlor-alkali products
**LyondellBasell: Declared Feb. 16 on styrene monomer
**Vestolit: Declared Feb. 16 on PVC produced at its Colombia and Mexico plants on lack of upstream vinyl chloride monomer feedstock from US suppliers; plants have a combined 1.8 million mt/year of capacity
**Olin: Declared Feb. 16 on US chlorine, caustic soda, ethylene dichloride, epoxy, hydrochloric acid and other products produced at its Freeport, Texas, complex; ; on Feb. 18 Olin expanded the declaration in a separate letter to customers to include products made system-wide
**MEGlobal: Declared Feb. 15 on MEG produced at its Freeport, Texas, site
**LyondellBasell: Declared Feb. 15 on US polyethylene
**Flint Hills Resources: Declared Feb. 15 on polypropylene produced at Longview, Texas
**OxyChem: Declared Feb. 15 on US chlorine, caustic soda, EDC, vinyl chloride monomer and polyvinyl chloride.
**LyondellBasell: Declared Feb. 15 on US polypropylene
**INEOS Olefins and Polymers USA: Declared Feb. 15 on polypropylene
**OQ Chemicals: Declared Feb. 15 on US oxo-alcohols, aldehydes, acids and esters produced at its Bat City, Texas, operations
**Westlake Chemical: 331,763 mt/year cracker, 249,475 mt/year chlorine, 274,423 mt/year caustic soda, 680,388 mt/year vinyl chloride monomer, 680,388 mt/year polyvinyl chloride, Calvert City, Kentucky
**Eastman Chemical: 730,000 mt/year ethylene capacity, Longview, Texas
**INEOS: 1.89 million mt/year of ethylene capacity, Chocolate Bayou, Texas
**LyondellBasell: 3.26 million mt/year of ethylene capacity in Channelview, La Porte and Corpus Christi, Texas
**MEGlobal: 750,000 mt/year monoethylene glycol (MEG) plant, Freeport, Texas
**Total: 1.15 million mt/year PP, La Porte, Texas
**Lotte Chemical: 700,000 mt/year MEG, Lake Charles, Louisiana; 1 million mt/year joint-venture cracker
**Braskem: 450,000 mt/year PP La Porte, Texas; 225,000 mt/year PP Seadrift, Texas
**ExxonMobil: Cumulative 1.53 million mt/year from three units, HDPE and LLDPE capacity, Mont Belvieu, Texas
**Indorama Ventures: Port Neches, Texas, 235,867 mt/year cracker, 1 million mt/year ethylene oxide/MEG unit, 238,135 mt/year propylene oxide unit, and 988,000 mt/year of MTBE capacity; Clear Lake, Texas, 435,000 mt/year EO, 358,000 mt/year MEG.
**Olin: Freeport, Texas complex, with 3 million mt/year of caustic soda and 2.73 million mt/year of chlorine capacity; 748,000 mt/year of EDC
**OxyChem: Ingleside, Texas, 544,000 mt/year cracker; 248,000 mt/year chlor-alkali; 680,000 mt/year EDC; Deer Park and Pasadena, Texas, 1.27 million mt in PVC capacity; 1.79 million mt/year of VCM capacity; 580,000 mt/year chlor-alkali
**Shintech: Freeport, Texas: 1.45 million mt/year PVC
**Formosa Plastics USA: Entire Point Comfort, Texas, complex, including three crackers with a cumulative capacity of 2.76 million mt/year; 875,000 mt/year of high density polyethylene; 400,000 mt/year of low density PE; 465,000 mt/year of linear low density PE; two PP units with combined capacity of 1.7 million mt/year; 798,000 mt/year of PVC; 1 million mt/year of caustic soda and 910,000 mt/year of chlorine; 753,000 mt/year of VCM; 1.478 million mt/year of EDC; and a cumulative 1.17 million mt/year of monoethylene glycol operated by sister company Nan Ya Plastics.
**Dow Chemical: Certain units offline within Dow sites along the US Gulf Coast, but the company did not specify. Dow’s Gulf Coast operations two LDPE units with 552,000 mt/year and 186,000 mt/year HDPE; Dow’s Seadrift, Texas, complex includes 490,000 mt/year LLDPE and 390,000 mt/year HDPE; Dow told South American customers in a letter dated Feb. 16 that the company was assessing impact on PE production capacity “and we know that our ability to supply various products could be affected.”
**TPC Group: Houston site shut down, including 544,310 mt/year butadiene unit, when boilers lost steam
**Shell: Deer Park, Texas, refining and chemical complex, including two crackers with a combined 961,000 mt/year of capacity
**Chevron Phillips Chemical: Pasadena, Texas, 998,000 mt/year HDPE; also has cumulative 5.35 million mt/year in capacity of six crackers in Port Arthur, Baytown and Sweeny, Texas
**Braskem: 360,000 mt/year PP Freeport, Texas; 400,000 mt/year PP La Porte, Texas
**Motiva Chemicals: Port Arthur, 635,000 mt/year mixed-feed cracker
**Shell: Norco, Louisiana, refining and chemical complex, including two crackers with a combined capacity of 1.42 million mt/year
**Baystar Polymers: Restarting 408,000 mt/year HDPE unit at Bayport, Texas
**Dow Chemical: Restarting three crackers at Freeport, Texas, with a combined 3.2 million mt/year of ethylene capacity
**Flint Hills Resources: Restarting 658,000 mt/year PDH unit, Houston
**Dow Chemical: Restarting 750,000 PDH, Freeport, Texas
**Braskem: Restarting 450,000 mt/year PP, La Porte, Texas
**Dow Chemical: restarting 680,000 mt/year cracker in Orange, Texas
**ExxonMobil: Beaumont, Texas, restart activity begun; 826,000 mt/year cracker operational; 225,000 mt/year HDPE; 240,000 mt/year LDPE; 1.19 million mt/year LLDPE with some HDPE capacity
**ExxonMobil: Baytown, Texas, restart activity begun; three crackers with a combined capacity of 3.8 million mt/year; 800,000 mt/year PP
**Sasol: 380,000 mt/year EO/MEG, Lake Charles, Louisiana
**Formosa Plastics USA: 513,000 mt/year PVC, 653,000 mt/year VCM, Baton Rouge, Louisiana
**LyondellBasell: Lake Charles, Louisiana, joint-venture 470,000 mt/year LLDPE; 420,000 mt/year LDPE
**March US polymer-grade prices fell 0.50 cents/lb March 1 to 85 cents/lb FD USG, while April prices fell 0.50 cents/lb to 76.25 cents/lb FD USG. Prompt PGP prices have plunged 32.8% since reaching an all-time high of $1.25/lb FD USG on Feb. 23, while forward-month prices have sunk 19.7% since hitting 95 cents/lb FD USG on that date, S&P Global Platts data showed.
**US prompt spot ethylene prices for March rose 3.25 cents on the day March 1 to 56 cents/lb FD Mont Belvieu, while forward-month April ethylene was assessed at 56 cents/lb FD Mont Belvieu, also up 3.25 cents on the day. March Choctaw ethylene was assessed at 55 cents/lb FD Choctaw, up 2.50 cents on the day March 1, while forward-month April ethylene was assessed at 54.25 cents/lb, up 2.50 cents on the day.
Singapore — The spread between the average prices of benzene, toluene and isomer-grade mixed xylene or BTX to naphtha surged to a 2.5-year high of…
Mar 01, 2021
The spread was the highest since reaching $229/mt on Aug. 16, 2018, and is prompting producers to consider raising run rates for reformers, or tweak the balance between BTX and gasoline production, market sources said.
Producers with the ability to tweak their production away from gasoline towards increased BTX production would be likely do so, at least until the end of March, when upcoming aromatics startups in China and US refineries returning to full production were expected to move the aromatics market back to surplus and weaken margins, according to S&P Global Platts Analytics petrochemical analyst Eshwar Yennigalla.
One Northeast Asian producer said the company was currently considering its options as aromatics prices were looking strong. However, producers also pointed to the gasoline market, where trade opportunities appeared equally attractive. “But the overseas gasoline price also increases,” a source said.
Asian gasoline margins have also soared, with the FOB Singapore 92 RON gasoline crack against front month ICE Brent crude futures averaging $4.28/b in February, up from $3.71/b in January and $2.30/b in December, Platts data showed. Sustained low refinery runs due to delayed refinery restarts, recovering domestic demand and the upcoming shift toward summer-grade gasoline will continue to provide a springboard for Asian gasoline’s upward momentum, industry sources said.
Meanwhile, benzene FOB Korea prices neared the $900/mt mark Feb. 26, and were assessed at $897.67/mt. The last time the FOB Korea benchmark was above $900/mt was in February 2018, Platts data showed.
The price rise has been unstoppable since mid-February, after the Lunar New Year holidays and after Texas’ unforeseen freeze.
March-loading cargoes were heard to be limited, as demand remains strong on both a CFR China and CFR Southeast Asia basis, fueling continued price gains in the market.
In production economics, the benzene-naphtha spread stood at $297.795/mt Feb. 26, almost hitting $300/mt. The last time the spread crossed $300/mt was in December 2017.
Both toluene and isomer-MX have uses as petrochemical feedstocks, in the production of benzene and paraxylene, as well as being potential blendstocks for gasoline.
MX has tracked paraxylene mostly, but toluene basked in both ways, tracking the upward momentum in both benzene and PX.
Collectively among Northeast Asian refiners, production of toluene was lower amid turnaround season. With downstream demand in the benzene and paraxylene chains still strong, expectations on demand for toluene materials for April remained positive, sources said.
Isomer-MX was assessed at $804/mt FOB Korea Feb. 26, the highest level since Nov. 13. 2018, when it reached $817/mt FOB Korea. Toluene physical touched a more than two-year high at $780/mt FOB Korea Feb. 25.
BTX margins have increased rapidly in recent weeks after having fallen as low as $3/mt on Oct. 9, 2020.
Sentiment in the Asian naphtha market was firm on tight supply in the West of Suez, however with the rollover to the H2 April delivery cycle, the front month swap backwardation was pegged lower by brokers in mid-morning trade Feb. 26. Brokers pegged the front month April/May Mean of Platts Japan naphtha swap spread at $7.50/mt, down from $9.50/mt at the Asian market close Feb. 26. The backwardation structure flattened as supply tightness was expected to ease further out as US Gulf Coast refineries are in the process of restarting after the polar vortex.
Lower crude prices led the physical CFR Japan naphtha benchmark down $2.50/mt from the Feb. 26 Asian close to $597.375/mt in early trade March 1, Platts data showed.
The key spread between the CFR Taiwan/China PX marker and CFR Japan naphtha physical has moved into the typical breakeven range of $280-$300/mt since Feb. 25 and could prompt splitters to raise run rates due to the improved margins. This PX-naphtha spread reached a 10-month high of $286.205/mt Feb. 25 before edging down to $281.995/mt on Feb. 26 as PX prices saw a downward correction after a sharp uptrend earlier in February, Platts data showed.
Singapore — Saudi Aramco set its March propane term contract price at $625/mt, up $20/mt from February, and butane CP at $595/mt, up $10/mt versus…
Mar 01, 2021
The propane CP was set at the high end of traders’ expectations of between $590/mt and $625/mt, though butane was set in the middle of expectations between $590/mt and $600/mt.
The March CPs are the ninth straight monthly increase for propane, and the eighth rise in a row for butane.
The March CP propane swap closed Feb. 26 at $619/mt, with butane valued $28/mt below that.
The higher March CPs came as Saudi Aramco announced acceptances of term LPG nominations for March loadings, with trade sources mixed on whether there were cancellations or delays and the volumes to be exported.
Some sources said there were no cuts or delays for March, estimating Saudi exports at above 550,000 mt, though not more than 600,000 mt. But others said there were cancellations of five to six cargoes, limiting total exports to around 520,000 mt.
Even at 600,000 mt, March exports are lower than before the voluntary Saudi Arabian crude production cuts, which shows there might have been cancellations to the nominations, trade sources said.
Saudi Aramco’s LPG exports across the year were around 7.9 million to 8.1 million mt — or a monthly average of 667,000 mt — before it decided on the crude cuts, according to market estimates.
Sources said the mixed view on March acceptances could also be attributed to lifters and Saudi Aramco having agreed in advance on the volumes, even as acceptances of February nominations saw Aramco canceling cargoes nominated by seven to eight lifters, following Saudi Arabia’s decision at the Jan. 5 OPEC+ meeting to cut oil output by 1 million b/d in both February and March.
Sources said overall Saudi Aramco’s propane supply was tight, as the product is fed into the kingdom’s petrochemical plants. But propane’s tightness should ease from April, when the kingdom is expected to restore production, if it is confident that crude prices would not fall further, sources said.
Aramco had set the propane CP for March 2020 at $430/mt and butane at $480/mt, S&P Global Platts data showed.
Aramco’s CPs — which set the price of propane and butane lifted from the Saudi Arabian ports of Yanbu, Ras Tanura and Ju’aymah under term supply contracts — are closely watched by the market as they tend to set a base level for pricing in most markets east of Suez.
Global aromatics and methanol markets faced unprecedented challenges in the first half of 2020, as the coronavirus pandemic and stay-at-home orders shuttered businesses and travel…
Mar 09, 2021
Global aromatics and methanol markets faced unprecedented challenges in the first half of 2020, as the coronavirus pandemic and stay-at-home orders shuttered businesses and travel across the world. With signs that restrictions are beginning to lift in key demand centers, the return of gasoline blending may yet provide some relief to lengthening markets. Renewed optimism could be short-lived, however, as overbuilds in Asia and global supply length look set to remain key hurdles for the market. Amid ongoing economic uncertainty petrochemical companies can expect to brace for further volatility.
– Aromatics outlook: Supply and demand forecast – COVID impact on GDP and polyester chain
– Mega refineries, China’s self-sufficiency and aromatics production
– Refinery optimization, convergence of chemicals and road fuels share of crude oil demand
– Road fuel demand and its impact on gasoline components markets
– Gasoline oversupply, storage concerns and historic drops in fuel additives
– Lockdowns begin to ease, will the impact be felt on components?
– Typical seasonal trends under question post-lockdown, the view from Platts forward curve data
– Are there signs of recovery for global methanol markets? Impact of the coronavirus pandemic and what to expect in H2 2020
– Weaker global downstream demand
– Methanol margin erosion and responses to global supply length
– Market eyes pricing mechanism alternatives amid spot price volatility