Americas: The week ahead in petrochemicals, w/c Sep 25
Houston (Platts)–25 Sep 2017 538 pm EDT/2138 GMT
Market participants are awaiting the settlement of September propylene contract, which is expected to settle this week, with market expectations calling for an increase of 5-7 cents/lb.
August polymer-grade contracts settled at 39.5 cents/lb and chemical grade at 38 cents/lb. Spot PGP has hovered in the range of 45-46 cents/lb FD USG for most of last week and was last assessed Friday at 45.5 cents/lb FD USG. Meanwhile, the market is closely monitoring upcoming steam cracker and polyethylene startups after spot ethylene pricing receded a bit at the end of last week after hitting a seven-month high.
Dow Chemical was the first company that started up its new ethane cracker in Freeport, Texas. It adds to downstream startups last week in the first wave of major petrochemical projects to emerge from the US natural gas boom. The company on Thursday announced the startup of a 1.5 million mt/year cracker and a 400,000 mt/year PE plant at its complex in Freeport.
Prompt DDP spot benzene prices gained 3 cents last week to finish Friday at 271 cents/gal, gaining during the week to reach as high as 277 cents/gal before scaling back Friday.
Prices continued to see support from stronger downstream styrene, where October styrene was heard traded last week as high as $1,270/mt FOB USG. The prompt, spot styrene-benzene spread finished the week at $534/mt, according to Platts data, and styrene margins were estimated at near $437/mt.
US styrene supply was characterized as snug as sellers looked to take advantage of higher prices overseas. Asia continued to provide the best netback, however, it showed signs of weakening, with November CFR China prices falling $21 Monday to finish at $1,327/mt.
US September spot toluene prices fell 1 cent last week to close at 238 cents/gal FOB USG while prompt mixed xylene prices were assessed up 1 cent on the week to 242 cents/gal FOB USG. Prices continued to face pressure as blend values fell sharply following sharp gains seen after Hurricane Harvey.
Toluene’s blend value fell roughly 27 cents to finish the week estimated at 211.42 cents/gal. The declines were driven by a drop in regrade values, which narrowed over 8 cents to finish at 11.80 cents.
Toluene and mixed xylenes spread to reformate widened on the week as reformate fell, and spreads were estimated at 24.18 and 28.18 cents/gal, respectively.