Americas: The week ahead in petrochemicals, w/c Oct 16
Houston (Platts)–16 Oct 2017 539 pm EDT/2139 GMT
US aromatics prices posted gains on the week amid declines in reformate pricing.
The spread between reformate and both toluene and mixed xylenes widened on the week, with both spreads finishing near 35 cents. Despite the attractive economics, sources said that the market for nitration grade toluene and mixed xylenes remained tight. Blend values finished the week near 200 cents/gal while the spread between blend value and reformate closed at near 24.50 cents.
Activity for high purity toluene was notably absent and most transactions seen in recent weeks have been for commercial-grade or product with a higher aromatics content.
US benzene, last assessed at 275 cents/gal FOB USG and 274 cents/gal DDP USG for October, saw gains last week because of low imports from Asia and a stronger energy complex. Market participants expect these same dynamics to lead to higher pricing again this week as inventories continue to shrink.
Meanwhile, US styrene started to move higher late last week as Asia styrene prices started to rebound. Market participants have said pricing could continue that rebound this week as China reserves are still low and could lead to stronger demand for US product. US styrene was last assessed at 51.95 cents/lb ($1,145/mt) and 51.50 cents/lb ($1,135/mt), respectively, for October and November.
Spot ethylene pricing was heard rising late last week as the market saw a stronger buy interest from a producer, market sources said. As of Wednesday, ethane cracker margins had dropped 3.3 cents since October 6, and were calculated Wednesday at 19.89 cents/lb, according to S&P Global Platts data. When compared with the same time last year, the margin is 9.16 cents lower. On Friday, ethane cracker margins sat at 21.29 cents/lb, Platts data showed.
Meanwhile, October propylene contract negotiations continue, with market expectations between an increase 1 cent/lb to a decrease of 1 cent/lb, sources said. Spot PGP pricing has fallen 3.25 cents/lb since the start of the month, and sat Friday at 45 cents/lb FD USG. September PGP contracts were settled at 46.5 cents/lb, sources said.