The Urethane Blog

Feedstock Pricing Outlook

Americas petrochemicals outlook, w/c April 26

US polypropylene

US polypropylene exports are expected to continue to trend downward in the short term amid improved availability, sources said.

The homopolymer assessment fell 13.5 cents/lb in the week ended April 24 amid talks of railcars available much lower for the period. S&P Global Platts assessed the homopolymer injection at $2,249-$2,271/mt April 23 on a FAS Houston basis. Ramp-ups by suppliers recovering from the February cold weather disruptions that hit the US Gulf Coast were expected to continue through the end of the month. Talks of normal production were expected to resume in June, sources said. Many buyers were still buying on allocations by producers. Despite the drop, participants deemed pricing too high to export to traditional import markets like Latin America amid competitive pricing from key global sellers. Still, there was talk that pricing would continue to dip on expected decreases in feedstock propylene contract price. Domestic market participants were eying a potential decrease as downstream contract settlements typically follow a monomer plus formula.

US olefins

US spot polymer-grade propylene is expected to continue rising in the week started April 25 on strong downstream polypropylene demand, sources said. April domestic PGP contracts are expected to settle in the week started April 25 between 10 and 16 cents lower.

US spot ethylene is expected to fall amid steam cracker restarts.

US vinyls

US spot export polyvinyl chloride prices were expected to remain at an all-time high of $1,800/mt FAS Houston in the week started April 25 as producers assess whether they will be able to offer volumes for May export. While all plants that shut amid sustained subfreezing temperatures in mid February have since restarted, turnarounds that were slightly delayed by the freeze shutdowns and more slated for May has kept output tight. Market participants do not expect output to resume normal levels until June. Upstream, caustic soda prices could inch up on growing demand in the pulp and paper industry as offices slowly reopen to workers, particularly in the US, with COVID-19 vaccinations becoming more available.

US aromatics

Benzene prices are expected to continue falling from the almost seven-year high of 503 cents/gal DDP USG reached April 20. While some sources said the decline in prices in the latter half of the week ended April 24 was simply a correction, the week of April 25 started with even lower spot ranges, including May benzene bid and offered at 410-485 cents/gal DDP HTC. May benzene had closed April 23 at 460 cents/gal DDP USG, up 35 cents on the week. Price movements through April 28 may prove influential in the settlement of the May CP, expected by the end of the week. May spot prices in recent weeks show the settlement should be sharply higher than the April CP of 301 cents/gal. Downstream, US styrene prices may see support from producers raising offers to account for higher feedstock prices as CP estimates clarify margins, as well as demand from Europe amid skyrocketing benzene costs in that region. May styrene closed April 23 at $1,520/mt FOB USG, up $50/mt on the week.

Stability is expected in the lower liquidity US aromatics markets of toluene and xylenes. While no spot trading was reported in the week of April 19-23, one market participant said the final days of April could usher in offers from producers who have otherwise been uncharacteristically quiet in the spot market since the mid-February Texas freeze derailed refining operations and supply chains. Sharp increases in benzene prices have improved economics for toluene disproportionation, allowing operators to increase STDP unit run rates, one trader said. Prompt nitration-grade toluene closed April 23 at 273 cents/gal FOB USG, up 3 cents week on week, while mixed xylenes gained 1 cent on the week at 249 cents/gal FOB USG.