EMEA: The week ahead in petrochemicals, w/c Jan 8 – EMEA petrochemicals olefins aromatics - Arhive
EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics EMEA petrochemicals olefins aromatics
EMEA: The week ahead in petrochemicals, w/c Jan 8
London (Platts)-
Activity in the European olefins markets is picking up after the festive season. But most of the price action is expected in downstream polymers.
Aromatics markets look broadly under pressure, as the lack of workable arbitrage out of Europe has seen supply in the region lengthen, for MX and toluene in particular.OLEFINS
The European ethylene market looks set to remain balanced after the monthly contract settled at roll-over last week. Fundamentals remain steady with few deals heard in the spot market in a slow start to the year.
The propylene market is expected to tighten as demand picks up in downstream PP and ACN markets following the end of the holiday period. Bullishness persists following the rise in the January propylene contract price.
The European butadiene market had a steady start to January, following price rises in late December. But the market expects a rise in activity in the second week of January as players return and the holiday season comes to an end.
AROMATICS
The benzene market is slowly finding balance following a volatile December, which had prompt material commanding a high premium throughout the month. Production problems in Europe have mostly been remedied and the absence of open arbitrage to other regions will ensure European end-users will keep domestic production to themselves.
A slightly weaker benzene market has consequently dampened chemical demand for toluene, and toluene spot prices are expected to be heavily influenced by gasoline blend values. MX fundamentals remain under pressure as January buy interest appears slack from most outlets. Meanwhile, market participants await settlements of the PX and OX January European contract prices.
The styrene market is expected to remain in a contango as turnarounds commence in February which are expected to tighten the market. Demand is likely to strengthen as buy activity resume in the polystyrene and acrylonitrile butadiene styrene markets as participants return from the Christmas break.
A modest Eur10/mt rise in the January styrene contract price is expected to be passed on to polystyrene prices. A larger cost increase in ABS is also seen as likely to place upward pressure on ABS prices in January.
POLYMERS
Polyethylene markets in Europe are expected to be far more active this week as most players are scheduled to return from holidays. Buyers are reported to be returning to the market following quieter demand at the end of last year as many players looked to manage inventories in-line with fiscal close targets.
Polypropylene prices are likely to remain robust following the feedstock cost rise. It remains to be seen if further activity surfaces in the spot PET market, as participants return after festive season holidays.
The European polyvinyl chloride market expects activity to pick up as the holiday season comes to an end and market participants return. Meanwhile, upstream ethylene’s January contract price level has rolled-over, adding a note of stability to the PVC market.
ETHERS AND METHANOL
Some activity in the MTBE window after a quiet December did little to inspire a change of pace for the market in the week ahead. The little trading done was limited to two parties and did little to test MTBE’s factor to gasoline. Market sources did not see any change to fundamentals on the horizon that would encourage other parties to enter trading or alter the gasoline factor.
Methanol ended the week with a large question mark hanging over it after a very quick Eur25/mt rise. But the origin of the material was unknown. Sources cited supply tightness — as Middle Eastern material continues to be grabbed by Asian buyers — as the primary driver for stronger pricing going forward, but were at a loss to explain the speed of the increase. This left the market with a bullish flavor, but little in the way of price projections.
INTERMEDIATES
The MEG market in Europe is tightening on higher prices in Asia leading to a reduction in imports arriving on the continent and strong PET and anti-freeze demand. The December and January contract prices are expected to be agreed in a dual settlement early next week. Many players expect the initial December settlement increase to be finalized.
European caustic soda market participants expect greater clarity on January contract and spot price levels in the second week of the month. Many in the market are expected to return from the winter holiday Monday, with an increase in activity expected as a result.
The European SBR market is tightening on Asian arbitrage openings leading European producers to export volumes to Asia. Asian producers observed a shortfall in export sales facing European and Russian export competition combined with anti-dumping duties in the US, pressuring sales. European exports are expected to remain strong as China is building stocks ahead of the Lunar New Year holiday over February 16-17.
–Staff, pl_petchems_ln@spglobal.com
–Edited by Jeremy Lovell, jeremy.lovell@spglobal.com