POLYMERSCAN

Volume 39 / Issue 43 / October 26, 2016

Americas Polymer Spot Price Assessments

FAS Houston US Contract US Domestic FOT Brazil* CFR Brazil CFR WC South America
($/mt) dlvd railcar ($/mt) ($/mt) ($/mt) ($/mt)
(cts/lb)
PVC SUSP 770-780 44.00-46.00 970.02 -1014.12 —- 845-855 830-840

LDPE G-P 1323-1345 76.00-77.00 1675.50 -1697.54 1515-1525 1335-1345 1355-1365

LLDPE (Butene) 1157-1179 64.00-65.00 1410.94 -1432.99 1365-1375 1275-1285 1270-1280
LLDPE C6 1168 -1190 —- —- —- —- —-
LLDPE metallocene 1213 -1235 —- —- —- —- —-

HDPE Inj 1080-1102 66.00-67.00 1455.04 -1477.08 1275-1285 1205-1215 1185-1195

Bmldg 1080-1102 66.00-67.00 1455.04 -1477.08 1270-1280 1200-1210 1215-1225
Film 1102-1124 69.00-70.00 1521.17 -1543.22 1305-1315 1220-1230 1190-1200
Yarn —- —- —-

PP Homo Inj 1025-1047 60.75-61.75 1339.29 -1361.34 1140-1150 1115-1125 1090-1100

Fiber —- 62.75-63.75 1383.39 -1405.43 —- —- —-
Copol 1124-1146 —- 1170-1180 1155-1165 1140-1150

PS G-P 1700-1710 85.00-87.00 1873.91 -1918.00 —-

HIPS 1810-1820 95.00-97.00 2094.37 -2138.46 —-
ABS Inj —- 97.00-99.00 2138.46 -2182.55 —-

PET bottle grade 1069-1091# 1202-1224##

Notes: All price assessments reflect spot trades with the exception of US Contract Delivered railcar. * FOT Brazil assessments are for export material via truck to MERCOSUR markets. West coast South
America includes major ports in Chile, Peru, Colombia and Ecuador. # US PET bottle grade refers to DDP US West Coast. ## US PET contract price is in $/mt.

Asian Polymer Spot Price Assessments

CONTENTS
CFR FE Asia CFR SE Asia CFR China
($/mt) ($/mt) South Asia Domestic Polymers
($/mt) (Yuan/mt) Polyvinyl Chloride 4
PVC SUSP 929-931 929-931 989-991 ^7490-7510
Low Density Polyethylene 5
^^7040-7060
Linear Low Density Polyethylene 7
LDPE G-P 1279-1281 1259-1261 —- 11480-11520 High-Density Polyethylene 8
LLDPE (Butene) 1129-1131 1179-1181 1189-1191 9430-9470 Polypropylene 10
LLDPE (C6 metallocene) 1329-1331 1379-1381 1389-1391 Polystyrene 12
Acrylonitrile Butadiene Styrene 14
HDPE Inj 1139-1141 1139-1141 1159-1161 —-
Bmldg 1139-1141 1139-1141 1159-1161 —- Polyethylene Terephthalate 15
Film 1149-1151 1129-1131 1159-1161 9680-9720
Yarn 1159-1161 1169-1171 —- —- Polymer Feedstocks: Olefins
Ethylene 18
PP Raffia 1019-1021 1039-1041 1044-1046 8230-8270 Ethylene Glycol 19
PP Injection 1019-1021 1039-1041 1044-1046 —-
Fiber —- —-
Propylene 20
Copol 1089-1091 1099-1101 1119-1121 —- Butadiene 22
IPP Film 1039-1041 1059-1061 1064-1066 —-
BOPP 1034-1036 1049-1051 1064-1066 —- Polymer Feedstocks: Aromatics
Paraxylene 25
PS G-P 1159-1161 1189-1191 —- —-
Styrene 26
HIPS 1244-1246 1254-1256 —- —-
EPS G-P 1168-1170*
EPS F-R 1218-1220*
Polymer Feedstocks: Intermediates
ABS Inj 1479-1481 1459-1461 —- —- Purified Terephthalic Acid 28
Acrylonitrile 29
PET bottle grade 869-871 * 872-874 ** —- —- Ethylene Dichloride / Vinyl Chloride Monomer 30
Notes: Asian PVC, PS, ABS and C6 mLLDPE, FE Asia refers to China. All Asian polymer assessments are basis L/C 0-30 days Credit
differentials calculated using 1 month LIBOR +1.5%. ^Denotes ethylene-based production ^^Denotes carbide-based production.
EPS F-R refers to fire retardant grade. *Denotes FOB North East Asia (South Korea, China, Japan) **Denotes FOB Southeast Asia News
31
(Thailand, Indonesia , Vietnam, Malaysia).

www.platts.com Now online at pmc.platts.com PetrocHemicAls

POLYMERSCAN october 26, 2016

Daily Polymer Spot Price Assessments

Thursday Friday Monday Tuesday Wednesday Average
CFR FE Asia ($/mt)
HDPE film 1149-1151 1149-1151 1149-1151 1149-1151 1149-1151 1149.00-1151.00
LDPE 1249-1251 1249-1251 1259-1261 1279-1281 1279-1281 1263.00-1265.00
LLDPE 1159-1161 1159-1161 1159-1161 1159-1161 1129-1131 1153.00-1155.00
PP Raffia 999-1001 999-1001 999-1001 1019-1021 1019-1021 1007.00-1009.00
PP Injection 999-1001 999-1001 999-1001 1019-1021 1019-1021 1007.00-1009.00
FD NWE (Euro/mt)
LDPE 1248-1252 1248-1252 1248-1252 1248-1252 1248-1252 1248.00-1252.00
LLDPE 1188-1192 1188-1192 1188-1192 1188-1192 1178-1182 1186.00-1190.00
PP Homo 1028-1032 1028-1032 1028-1032 1028-1032 1028-1032 1028.00-1032.00
FCA Antwerp (Euro/mt)
LDPE 1228-1232 1228-1232 1228-1232 1228-1232 1228-1232 1228.00-1232.00
LLDPE 1168-1172 1168-1172 1168-1172 1168-1172 1158-1162 1166.00-1170.00
PP Homo 1008-1012 1008-1012 1008-1012 1008-1012 1008-1012 1008.00-1012.00
FAS Houston ($/mt)
LDPE 1345-1367 1345-1367 1345-1367 1345-1367 1323-1345 1340.60-1362.60
LLDPE 1190-1212 1190-1212 1190-1212 1201-1223 1157-1179 1185.60-1207.60
PP Homo 1036-1058 1036-1058 1036-1058 1036-1058 1025-1047 1033.80-1055.80
HDPE Blmldg 1124-1146 1124-1146 1102-1124 1102-1124 1080-1102 1106.40-1128.40
FOB Middle East Netbacks ($/mt)
HDPE 1138-1140 1138-1140 1138-1140 1138-1140 1138-1140 1138.0-1140.0
LDPE 1238-1240 1238-1240 1248-1250 1268-1270 1268-1270 1252.00-1254.00
LLDPE 1148-1150 1148-1150 1148-1150 1148-1150 1118-1120 1142.00-1144.00
PP Raffia 988-990 988-990 988-990 1008-1010 1008-1010 996.00-998.00
PP Injection 988-990 988-990 988-990 1008-1010 1008-1010 996.00-998.00
Notes: The weekly average represents the average of Thursday through Wednesday of the previous week.
FOB Middle East netback denotes CFR Far East Asia assessments minus the prevailing container freight rate from Al-Jubail to Shanghai for a standard 20-foot container.

Polymer Spot Freight Rates ex-Middle East ($/mt)

Subscriber Notes:
From: Middle East Middle East
To: 25-100 mt >100mt Platts proposes W African polyethylene, polypropylene assessment
East China 18-22 9-13 S&P Global Platts proposes to launch on November 30, 2016, a weekly West
South China 26-30 14-18
India 26-30 20-25 African polyethylene and polypropylene assessment. These are for low density
Southeast Asia 22-26 17-21 polyethylene, linear low density polyethylene, high density blowmolding
NW Europe 55-65 50-60 polyethylene, high density injection polyethylene, high density film polyethylene,
Turkey 51-60 42-50 homo injection polypropylene and polypropylene copolymer. The assessed price
US Gulf 115-125 105-115
Latin America 150-160 140-150 will be in $/mt on a CFR West Africa basis. The new CFR West Africa assessment
Notes: Please refer to the methodology guide for details on port locations.
will be published on Polymerscan as well as PCA page PC239 Like the current
CFR North Africa assessment, the CFR West Africa assessment will reflect a
cargo size between 100-500 mt lots, and will reflect products for delivery 15-45
Metals days forward from the date of publication with 60 days net payment terms.
Aluminum US Oct 24 cts/lb 80.777 Please send any comments and queries to pl_petchems_ln@spglobal.com and
Tin US Oct 24 cts/lb 944 pricemethodology@platts.com by October 24. For written comments, please
Tin Europe Oct 19 $/mt 20005-20110
provide a clear indication if comments are not intended for publication by Platts
for public viewing. Platts will consider all comments received and will make
Foreign exchange comments not marked as confidential available upon request.
€1 to $1.0916 £1 to €1.1213
Platts launches domestic Brazil HDPE, LDPE, LLDPE assessments
Following a period of feedback after a formal proposal published August
Global LDPE Prices 9, 2016, as well as a previous public consultation and review period, S&P
Global Platts has decided to launch weekly Brazil domestic spot polyethylene
1400
price assessments for high density polyethylene, linear low-density butene
polyethylene and low-density polyethylene. Assessments will launch October
1300 19, 2016 and are for delivery in South and Southeastern Brazil by truck for the
specifications below, in BRL/mt and USD/mt. Specifications for the polyethylene
grades are: LDPE with a melt flow index of 1.8-2.5; LLDPE butene-1 grade with
1200 a melt flow rate of around 1.0; HDPE grades are HDPE film, blowmolding and
injection -- HDPE blowmolding and HDPE film grade with a melt flow rate 0.25
and higher; HDPE injection grade with a melt flow rate of 2.0-25. Prices are for
1100 resin delivered three-30 days from date of publication in South-Southeast Brazil
CFR FE Asia ($/mt) FD NWE (€/mt) FAS Houston ($/mt) and do not include taxes. Cargo sizes are for a 500-1,500-mt/month or 16-50 mt/
1000
day buyer with letter of credit of 28-35 days. For deals with issuance of greater
01-Jun 24-Jun 20-Jul 15-Aug 07-Sep 03-Oct 26-Oct
than 35 days, the value of the credit will be factored out for price assessment.
(continued on page 33)

© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 2
POLYMERSCAN october 26, 2016

Euro Contract Assessments (Euro/mt)

Germany Holland Italy France Spain Britain* FD NWE CP**
($/mt)
PVC susp Gross 875-880 875-880 875-880 875-880 875-880 781-786 967-971
PVC susp Net 850-855 850-855 850-855 850-855 850-855 759-763

LDPE G-P 1458-1462 1458-1462 1428-1432 1453-1457 1428-1432 1302-1305 1592-1596

LLDPE C4 (Blown film) 1398-1402 1398-1402 1398-1402 1398-1402 1398-1402 1248-1252 1526-1530
LLDPE C4 (Cast stretch film) 1398-1402 1398-1402 1398-1402 1398-1402 1398-1402 1248-1252 1526-1530
LLDPE C6 (Blown film) 1458-1462 — — — — — 1592-1596
LLDPE C6 (Cast stretch film) 1458-1462 — — — — — 1592-1596

HDPE Inj 1398-1402 1398-1402 1398-1402 1398-1402 1398-1402 1248-1252 1526-1530

HDPE Bmldg 1398-1402 1398-1402 1398-1402 1398-1402 1398-1402 1248-1252 1526-1530
HDPE Film 1398-1402 1398-1402 1398-1402 1398-1402 1398-1402 1248-1252 1526-1530
HDPE HMW 2-5 1418-1422 1418-1422 1418-1422 1418-1422 1418-1422 1266-1270 1548-1552
HDPE HMW 5-10 1413-1417 1413-1417 1413-1417 1413-1417 1413-1417 1262-1265 1542-1547

PP Homo Inj 1183-1187 1183-1187 1173-1177 1183-1187 1173-1177 1056-1060 1291-1296

PP Copol 1233-1237 1233-1237 1223-1227 1233-1237 1223-1227 1101-1105 1346-1350

GPPS Net 1243-1247 1243-1247 1243-1247 1243-1247 1243-1247 1110-1113 1357-1361

HIPS Net 1313-1317 1313-1317 1313-1317 1313-1317 1313-1317 1172-1176 1433-1438
EPS 1253-1257 1253-1257 1253-1257 1253-1257 1253-1257 1119-1122 1368-1372

ABS GP/Nat 1468-1472 — 1468-1472 1468-1472 1468-1472 1311-1314 1602-1607

ABS Ave color 1598-1602 — 1598-1602 1598-1602 1598-1602 1427-1430 1744-1749
ABS Auto black 1738-1742 — 1738-1742 1738-1742 1738-1742 1552-1555 —-

PET bottle grade 948-953 — 948-953 948-953 948-953 812-816

PET bottle grade — — — — — 909-914##
PET bottle grade Net 878-882 — — — — 788-792 958-963
PET bottle grade Net — — — — — 882-887##
APET film grade 937-942
APET film grade Net 868-872
Notes: *FD Britain = FD UK, with assessments in British Pounds per metric ton. **FD NWE CONTRACT PRICE denotes FD Germany converted into US dollars. ## PET bottle grade assessments basis FD UK
are in Euro/mt. PET assessments refer to regular business at prices negotiated between buyers and sellers on a monthly basis.

Platts European and African Polymer Spot Price Assessments

FOB NWE FD NWE FCA Antwerp CFR Russia* CFR Turkey** CFR North Africa FD UK
($/mt) (Eur/mt) (Eur/mt) (Eur/mt) ($/mt) ($/mt) (GBP/mt)
PVC SUSP 828-832 818-822 — 777-781 888-892 — —
($/mt) 848-852

LDPE G-P 1297-1301 1248-1252 1228-1232 1198-1202 1255-1259 1208-1212 —

LLDPE (Butene) — 1178-1182 1158-1162 1128-1132 1210-1214 1188-1192 —
LLDPE C6 — 1248-1252 — — — — —
LLDPE metallocene — 1318-1322 — — — — —

HDPE Inj 1242-1247 1198-1202 1178-1182 1148-1152 1152-1156 1178-1182 —

Bmldg 1242-1247 1198-1202 1178-1182 1148-1152 1152-1156 1178-1182 —
Film 1231-1236 1188-1192 1168-1172 1138-1142 1152-1156 1178-1182 —

PP Homo Inj 1057-1061 1028-1032 1008-1012 943-947 1058-1062 998-1002 —

PP Raffia — — — — 1058-1062 998-1002 —
PP Copol 1111-1116 1078-1082 1058-1062 993-997 1148-1152 1078-1082 —

PS G-P 1220-1225 1178-1182 — — 1138-1142 1138-1142 —

HIPS 1297-1301 1248-1252 — — 1178-1182 1178-1182 —
EPS 1226-1230 1183-1187 — — 1163-1167 — —
ABS GP/Nat 1578-1582***
1363-1367 — — — —

PET bottle grade — 878-882 — — — — 788-792

PET bottle grade — — — — — — 882-887#
Recycled PET — 718-722 — — — — 613-617
Recycled PET — — — — — — 686-691#
Notes: FOB NWE prices are based on exports of 300mt or more. *CFR Russia denotes CFR St Petersburg; ** CFR Turkey denotes CFR Istanbul; *** ABS GP/Nat denotes CFR NWE in $/mt. # PET bottle grade
and Recycled PET assessments for FD UK are in Euro/mt. Recycled PET assessments are for a hot wash flake without food approval.

© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 3
POLYMERSCAN october 26, 2016
Polymers
Polyvinyl Chloride
Europe
EU prices up as Turkish, Asian prices rise
„„
Tepid EU demand chokes price increases
„„
European polyvinyl chloride spot prices were up Eur5/mt on the week
to Eur820/mt FD NWE, supported by gains in Turkey and Asia. Asian
PVC was assessed at $930/mt CFR China Wednesday, up $10/mt week
on week. Meanwhile, European offers into Turkey were inching toward
$900/mt CFR Turkey. “PVC demand is better [than other polymers],” a
Turkish source said. Meanwhile, upstream, Platts ethylene contract
price indicator for November was assessed at Eur979.50/mt FD NWE,
compared with the industry settlement in October at Eur940/mt,
reflecting feedstock increase. Also, caustic soda FOB Rotterdam prices
were up $5/mt on the week to $385/mt, amid ongoing tightness.
Recent industry data has shown a fall in stocks in Europe, according to
Euro Chlor. At 207,961 mt, August caustic soda stocks were 37,255 mt
below the level of August 2015 (245,216 mt). “We sold two vessels at
$410/mt FOB Med and the market remains tight,” a caustic soda
producer said. However, a trade source said that he expected PVC spot
prices in Europe to remain stable at Eur810-830/mt FD NWE, amid
lukewarm demand.
Rationale
PVC spot prices were up Eur5/mt on the week assessed within the
range heard at Eur810-830/mt FD NWE, at Eur820/mt FD NWE. The
increase came amid global bullishness. Turkish PVC prices were
assessed at $890/mt CFR Turkey, up $20/mt on the week, below the
most repeatable offer heard at $900/mt CFR Turkey (ex-Europe). PVC
net contract prices were steady on the week at Eur852.50/mt FD NWE.
No fresh prices were heard to disprove the price.
United States
Producers seek increases for Nov exports
„„
Domestic contracts talked higher for Oct
„„
US export polyvinyl chloride prices were assessed Wednesday at $770-
$780/mt FAS Houston, up $5/mt week on week, as pricing was talked
stable to slightly higher. At least two producers have nominated
November pricing $50/mt higher, which would call for producer-to-
trader pricing levels at around $800/mt FAS Houston, market sources
said. November expectations had ranged from a rollover of the $750-
$765/mt levels seen for early October to prices closer to $800/mt.
Pushing through the entire increase could be difficult, according to
market sources. The sources said that while such pricing was
workable to some regions — particularly Asia — most key export
destinations for US sellers would not accept pricing at that level with
demand slower. A trader source suggest that US PVC would be
uncompetitive into South America’s West Coast, Africa and the Middle
East at nominated prices levels. In the domestic market, PVC contracts
were assessed at 44-46 cents/lb rail car, up 0.5 cent week on week
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
and up 1.5 cents from September. Producers are pushing for a 4-cent
increase in October, but that will likely prove difficult to implement
given expectations for lower demand in Q4 and softer spot ethylene
prices compared to mid-September. Market sources said 1-2 cents was
likely to be implemented. Industry data released late last week by the
American Chemistry Council showed North American PVC production
in September exceeded total sales, leading to a build in stocks similar
to that notched in August. Production in September totaled almost 1.29
billion lb, while total sales and captive use were at almost 1.24 billion lb,
down 6% month on month, but 3.4% higher than the year-ago month.
The ACC data would suggest a 48.7 million lb build in stocks during
September. Upstream, spot ethylene prices continued to move lower,
with the prompt month last assessed Tuesday at 26.25 cents/lb FD
USG, a drop of 4.5 cents from last Wednesday. Market sources have
pointed to healthy availability as turnarounds come to an end and as
some sellers work to reduce inventories before the end of the year.
Rationale
US export PVC on a three- to 30-day basis was assessed Wednesday at
$770-$780 FAS Houston, up $5/mt week on week, based on pricing
indications at that level from multiple market participants. October
domestic prices were assessed at 44-46 cents/lb rail car, up a half
cent for the week and up 1.5 cents from September, based on pricing
indications and expectations from market sources that 1-2 cents of an
announced 4-cent increase would pass through.
Asia
Buyers accept $40/mt price hike for Nov
„„
Dec offers may be increased by $10/mt
„„
The Asian PVC market continued to firm this week, with spot prices
jumping $10-$20/mt from the previous week to stay at two-year high
levels. End-users were heard to have accepted a $40/mt price increase for
November cargoes compared to October, at $930/mt CFR China and
$990/mt CFR India. For November cargoes, buyers had initially resisted the
$40/mt price increase, which was announced last Monday, amid seasonal
demand lull. But they accepted the increase later last week in order to
cover limited supplies from China. The local China market continued to
firm, with carbide-based PVC rising Yuan 10/mt week on week to be
assessed at Yuan 7,050/mt, while ethylene-based PVC was assessed
stable at Yuan 7,500/mt over the same period. In India, some market
sources expected local prices to increase next week. Looking forward,
Asian PVC producers are likely to raise offers for December cargoes by
$10/mt in line with the stronger domestic markets in China and India,
sources said. In statistics news, China’s PVC imports fell 5.9% from a
month earlier to 44,796 mt in September, data released Tuesday by the
General Administration of Customs showed. From a year earlier, China’s
September PVC imports marked a 21.7% decline. Meanwhile, China’s PVC
exports fell 42.4% from a month earlier to 82,002 mt in September, and
were up 40.7% from a year earlier. In plant news, Japan’s Taiyo Vinyl plans
to shut its 310,000 mt/year PVC plant in Yokkaichi in March-April 2017 for
annual maintenance, a company source said Tuesday. The shutdown
period will be more than one month, the source said.
4
POLYMERSCAN october 26, 2016
Rationale
Asian PVC was assessed at $930/mt CFR China Wednesday, up $10/mt
week on week. Taiwan-origin cargoes were heard traded within a
range of $920-$930/mt CFR China, while South Korea-origin cargoes
were heard traded at $930-$940/mt CFR China. The CFR Southeast
Asia PVC marker was assessed up $10/mt from the previous week, at
$930/mt Wednesday, with deal done levels heard at $930-$940/mt
CFR SEA. The CFR India PVC marker rose $20/mt week on week to be
assessed at $990/mt Wednesday. Deals were reported to have been
done at $990-$995/mt CFR India this week.
Latin America
Firming global prices pressure market
„„
Brazil sees some encouraging economic signs
„„
Polyvinyl chloride import pricing firmed in Latin America’s key import
regions, with prices rising $10/mt in both Brazil and along the West
Coast of South America, tracking gains in global pricing, sources said.
The import assessment was at $830-$840/mt CFR WCSA on
Wednesday, up $10/mt week on week as market participants talked
pricing in between $830-$850/mt CFR. Demand has been heard low,
with buyers slower to accept higher pricing so far this month, sources
said, but with US-based pricing talked steady to firmer and Asian
markets also moving up, those in need of product had few low-price
options. US-based sources noted that Latin America was providing
lower netbacks than other regions, leaving little room for profit or
negotiation compared to FAS Houston pricing. In Brazil, the import PVC
price gained $10/mt to $845-$855/mt CFR basis as multiple market
participants talked pricing around $850/mt CFR. Demand in Brazil
continued to heard low, but sources in the region said the mood of
buyers regarding the economy continued to improve, which could be a
sign of stronger buying moving forward.
Rationale
CFR WCSA: The import assessment was $10/mt higher week on week
at $830-$840/mt CFR WCSA, based on pricing indications at $830-
$850/mt with the assessment coming closer to the low end to account
for weak demand. CFR Brazil: The price increased $10/mt on the week,
assessed at $845-$855/mt CFR basis on Wednesday, based on pricing
indications at $850/mt CFR Brazil.
Low Density Polyethylene
Europe
Expectations for November mirror October market
„„
Imports drop off as demand from Asia increases
„„
Northwest European low density polyethylene contract prices were
assessed at Eur1,460/mt FD Wednesday, concluding the month of
October at a rollover on September prices. “We achieved a rollover this
month on contract prices,” a mid-sized converter of LDPE said.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Settlements had been reported at flat from September through the third
and last week of October. Buyers unanimously reasoned a rollover price
had been achieved on poor demand, despite producers having to bear an
increase of Eur15/mt in feedstock costs. The market now looks towards
November where a growing consensus is heard around expectations of
rollover pricing that month, if the anticipated increase in ethylene costs
for November proves true. “I expect next month to see an increase in
ethylene costs equal the margin loss from producers,” a converter source
said, arguing this on the likely continuation of low demand. Platts
ethylene contract price indicator for November showed an increase of
Eur41/mt above the industry CP of Eur940/mt for October. Prospects for
ethylene have turned bullish amid increases in its primary feedstock in
Europe, naphtha. Spot prices of naphtha cargoes were assessed at
$448.75/mt CIF NWE Tuesday, up $26.75/mt from the start of October.
The NWE ethylene CP for the is typically settled by the industry in the final
week of the preceding month. LDPE spot prices showed little change on
the week, with indications given at Eur1,170-1,250/mt for delivery in
Northwest Europe. S&P Global Platts assessed prices at the most
repeated value of Eur1,250/mt FD NWE, flat on the week. Spot prices had
maintained strength in October despite weakened fundamentals. Trade
sources said that imports into Europe were slowing as demand from Asia
had risen. One converter source said he was expecting to receive LDPE
from Iran this month but the delivery had been rerouted to Asia after
departure for Europe in search of higher profits. “Imports were at a high
level [in Europe] earlier this month but imports are now even being turned
around for Asia,” the converter source said of LDPE. Further thwarting
imports was the effect of a weakening euro, which made dollar-based
imports more expensive. The euro had closed at a low of 1.0891 against
the dollar last week, a value not seen lower since the beginning of March
this year. “Imports are more expensive so more interest is being seen in
domestic product,” a trade source said, adding this did not mean
European prices would rise as poor demand prevented that. In production
news, Ineos’ steam cracker in Rafnes, Norway, is expected to begin
producing olefins again at the end of November, a source close to the
company said on Wednesday. An outage at the cracker is not impacting
the connecting 140,000 mt/year LDPE plant. Ethylene is being sourced
externally, the source said.
Rationale
European low density polyethylene spot prices were assessed at
Eur1,250/mt FD NWE Wednesday, flat on the week. Prices were
assessed within an indicated range of Eur1,170-1,250/mt FD NWE.
Contract prices were assessed flat on the month at Eur1,460/mt FD
NWE. The assessment was made following the vast majority of
settlements heard at rollover.
United States
Oct domestic contracts rolling over
„„
LDPE stocks decrease in Sept: ACC
„„
US low-density polyethylene export prices were assessed Wednesday
at $1,323-$1,345/mt (60-61 cents/lb) FAS Houston, down $22/mt week
on week, as market sources said availability seemed to be improving in
5
POLYMERSCAN october 26, 2016
the long-tight market, and as a result, some lower priced spot resin
was being seen. Rail car pricing indications — where available — were
heard in the high 50s cents/lb range for bulk pricing from producers to
traders. Wednesday’s assessment was the lowest since August 18
when it was assessed at $1,312/mt FAS Houston, according to S&P
Global Platts data. Market sources indicated that US prices would still
need to move lower to be competitive to most regions, but were
encouraged by the cheaper pricing being seen. There were growing
expectations among traders that PE prices could trend lower in the
coming month as export activity typically increases at the end of the
year and producers could look more aggressively to the export market
to manage inventories as domestic buyers seek price relief throughout
Q4. October LDPE domestic contracts were assessed stable at 76-77
cents/lb ($1,675-$1,698/mt) for delivered rail cars based pricing was
heard rolling over for October. Buyers are expected to push for
decreases in November and December, sources said, and there were
growing calls for prices to fall by 2-3 cents/lb in the coming months.
Some sources suggested a decrease of 5 cents/lb could be warranted
by the end of 2016, particularly with demand expected to slow at the
end of the year and new capacity set to come on over the next few
months in addition to the new polyethylene already being produced in
Mexico. Sources also have pointed to slower demand in October
compared to previous months. Data released Tuesday by the American
Chemistry Council showed PE stock in the US and Canada decreased
almost 2.8% in September as slower sales were offset by a cutback in
production. LDPE inventories were at 795 million lb for September, a
2.4% drop from August. Total PE sales were at more than 3.36 billion
lb, down 8.4% from the previous month, while production was at more
than 3.2 billion lb, down 4.5% from the previous month. Upstream,
spot ethylene prices continued to move lower, with the prompt month
assessed Wednesday at 27 cents/lb FD USG, a drop of 3.75 cents from
last Wednesday. Market sources have pointed to healthy availability as
turnarounds come to an end and some sellers working to lower
inventories before the end of the year.
Rationale
US LDPE export prices were assessed Wednesday at $1,323-$1,345/mt
(60-61 cents/lb) FAS Houston, down $22/mt week on week, based on
rail car pricing indications from producers to traders at 57-58 cents/lb.
The assessment factors in packaging and transportation to port costs
of around 3 cents/lb ($66/mt) on top of bulk rail car prices, per market
feedback. October domestic LDPE contract prices were assessed at
76-77 cents/lb ($1,675-$1,698/mt) for delivered rail cars, steady week
on week, based on pricing indications from market sources as October
domestic pricing was heard settling flat.
Asia
Import pricing up $30/mt on week
„„
Increases could be shortlived: producer source
„„
Low-density polyethylene assessments rose $10-$30/mt in Asia this
week, pulled higher by stronger demand for film grades in China,
sources said this week. Film grade was assessed Wednesday at
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
$1,280/mt CFR Far East Asia, stable on the day and up $30/mt week on
week. Market sources talked the market in the $1,280-$1,290/mt
range, with offers heard at $1,300-$1,320/mt CFR basis. One market
participant said greenhouse agricultural film demand was lending
support to prices. The China domestic assessment rose Yuan 250/mt
to Yuan 11,500/mt, illustrating the uptick in demand, sources said. A
source with a major global producer cautioned that the recent
increases were the result of short-term tightness in the market
stemming from unplanned outages and not so much demand, and
expected prices to soften to end the year. Southeast Asia pricing was
nominally stronger on the week, up $10/mt to $1,260/mt CFR basis,
tracking the upward movement in China, but with the market talked in
a wide margin. A trader source in Vietnam described the market as
“wait and see” in terms of overall demand, with sentiment driving
prices. In India, demand was subdued this week ahead of the Diwali
holiday, with sources describing demand as stable but supply as long.
Rationale
CFR FAR EAST ASIA: Film-grade was assessed up $30/mt week on
week at $1,280/mt Wednesday, based on tradable indications at
$1,280-$1,290/mt. Domestic China: Film-grade was assessed up Yuan
250/mt at Yuan 11,500/mt ex-works, based on offers talked at Yuan
12,000-13,000/mt and indications of stronger demand. CFR
SOUTHEAST ASIA: Film-grade was assessed at $1,260/mt, up $10/mt
week on week, based on an offer at $1,300/mt CFR basis and the
uptrend in CFR Far East Asia pricing.
Latin America
Asia pricing, freight deemed too high: sources
„„
Consumer confidence rising in Brazil: sources
„„
Low-density polyethylene pricing for markets on the Pacific Coast of
South America fell for the week, assessed $25/mt lower Wednesday at
$1,355-$1,365/mt CFR West Coast South America basis, amid lower
pricing from the United States. Demand was heard to be low along the
West Coast, with local distributors said to be dropping prices to
facilitate moving product, a market source said. In Brazil, LDPE pricing
also dropped Wednesday, down $30/mt for the week to $1,335-1,345/
mt CFR basis, based on lower pricing from the US. Market sources
pointed to a stronger Real and improved public confidence following
recent political turmoil with helping drive up demand. Sources also said
end users have ramped up production in recent days and weeks ahead
of the Christmas season, which in turn is also improving demand, both
domestically and on the import market. In addition, market sources
have been citing local producer Braskem’s November shutdown of one
of its steam crackers at Camacari with leading to more import
demand. The Brazilian export assessment remained flat at $1,515-
$1,525/mt FOT Brazil, based on Brazil-origin offers of $1,640/mt CPT
Paraguay. The assessment deducts $100/mt for freight and $20/mt for
negotiation. Sources on both sides of the continent also said pricing
from Asia has been on the rise, as well as shipping rates from the
region, making material from the Far East less attractive when
compared with the US and its falling prices.
6
POLYMERSCAN october 26, 2016
Rationale
CFR WCSA: LDPE fell $25/mt on the week to $1,355-$1,365/mt CFR
basis, based on US-origin offers of $1,380/mt CFR Peru. The
assessment was made $20/mt below the offer level to account for
negotiation. CFR Brazil: LDPE dropped $30/mt to $1,335-1,345/mt CFR
basis, based on trading levels for US-origin material talked at $1,335-
1,345/mt CFR Brazil. The assessment was made at the trading levels.
FOT Brazil: LDPE was flat at $1,515-$1,525/mt FOT Brazil, based on
Brazil-origin offers of $1,640/mt CPT Paraguay. The assessment
deducts $100/mt for freight and $20/mt for negotiation.
Linear Low Density Polyethylene
Europe
LLDPE weakest of major polyethylene grades
„„
Imports continue to be heard competitive on LLDPE
„„
Northwest European linear low density polyethylene contract prices
were assessed flat from September concluding the month of October
at Eur1,400/mt FD Wednesday. The majority of LLDPE settlements
had been reported at a standstill from September prices throughout
this month, these were confirmed by more settlements at the same
level in the last week of October. LLDPE had been reported as the
weakest of major polyethylene grades this month allowing some
buyers with a great deal of purchasing power to achieve prices at
discounts from last month. “Prices downwards of a rollover are
possible on LLDPE,” a large converter source said. Producer costs
had increased Eur15/mt this month on feedstock ethylene, a rollover
in pricing has therefore impacted their profit margins. NWE LLDPE
spot prices weakened Eur10/mt this week on availability outweighing
demand. LLDPE C4 blown film spot prices were assessed at Eur1,180/
mt FD NWE Wednesday. Unlike other major PE grades, LLDPE prices
continued to be heard under pressure from imports. “Import offers
on LLDPE are as low as Eur1,100/mt on C4 from the Middle East, they
are still available and cheap this week,” a converter source said.
Unlike low density PE, LLDPE imports to Europe were not pulled away
by price rises in Asia as LLDPE prices in that continent softened.
LLDPE assessments in Asia were stable to lower this week, with spot
pricing down as much as $30/mt for some LLDPE grades this week.
PE imports into Europe will continue to grow to fulfill market demand
requirements and in the absence of sufficient domestic supplies,
Ahmad Al-Saleh, polyethylene business director at Kuwait’s Equate
Petrochemical Company and president of Equate Marketing
Company, told S&P Global Platts in an interview at the K Fair
conference in Dusseldorf. “The European processing industry has
been a progressive sector in multiple applications with strong focus
on film extrusion for flexible and rigid packaging. As such, butene
linear low density PE, high density PE film and blow molding have
witnessed a healthy growth trend historically,” Al-Saleh said. In the
first eight months of the year, the EU imported 2.2 million mt of PE,
up 31% on the year. The bloc imported 48,895 mt of PE from Kuwait,
compared with 12,979 mt in the same period last year.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Rationale
European LLDPE spot prices were assessed down Eur10/mt on the
week at Eur1,180/mt FD NWE Wednesday. Indicated prices were heard
at Eur1,100-1,190/mt FD NWE. Platts assessed within the range, moving
down on very competitive import offers and good European availability.
The contract price for October was assessed flat on the month at
Eur1,400/mt FD NWE. Settlements were heard at a rollover from prices
in September or even a few euros below this week. Platts assessed in
line with the most repeatable settlement heard for a mid-sized
converter of rollover.
United States
FAS butene prices reach six-month low
„„
October contracts rolling over
„„
US linear low-density FAS Houston assessments fell $22-$44/mt week
on week as market participants were seeing lower pricing levels amid
signs of increased availability for exporters. Butene export prices were
assessed Wednesday at $1,157-$1,179/mt (52.5-53.5 cents/lb) FAS
Houston, down $33/mt week on week, as rail car pricing indications
were heard in the low 50s cents/lb range to traders. The butene
assessment is the lowest since April 11, according to S&P Global Platts
data. LLDPE hexene was down $22/mt week on week, assessed at
$1,168-$1,190/mt (53-54 cents/lb) FAS Houston, as pricing was talked
on par to slightly above butene. Metallocene was assessed at $1,213-
$1,235/mt (55-56 cents/lb) FAS Houston, down $44/mt week on
week,as rail car pricing was talked around 52-54 cents/lb. Even with
prices moving lower, some trader sources were heard hesitant to take
positions as there were expectations for further decreases in the
coming month. Export prices traditionally move lower in November and
December as US producers attempt to decrease inventory before the
end of the year. Sources also suggested that continued decline in
domestic demand could also free up more resin for export. Domestic
contract prices were assessed for October at 64-65 cents/lb for
delivered rail cars, stable from September levels, as prices were heard
settling flat for the month. There was growing talk among buyers that
there would be a push for lower pricing in November, with sources
suggesting a 2-3 cent decrease was possible based on weaker
demand and declining feedstock ethylene pricing. Some market
sources have suggested a decrease of up to 5 cents/lb could be
warranted by the end of 2016, particularly given some of the new
capacity that was expected to be on line in the coming months. Data
released Tuesday by the American Chemistry Council showed PE
stocks in the US and Canada decreased almost 2.8% in September as
slower sales were offset by a cutback in production. LLDPE inventories
fell 10% to almost 1.2 billion lb. Total PE sales were at more than 3.36
billion lb, down 8.4% from the previous month, while production was at
more than 3.2 billion lb, down 4.5% from the previous month.
Upstream, spot ethylene prices continued to move lower, with the
prompt month last assessed Tuesday at 26.25 cents/lb FD USG, a drop
of 4.5 cents from last Wednesday. Market sources have pointed to
healthy availability as turnarounds come to an end and some sellers
working to lower inventories before the end of the year.
7
POLYMERSCAN october 26, 2016
Rationale
US LLDPE butene export prices were assessed Wednesday at $1,157-
$1,179/mt (52.5-53.5 cents/lb) FAS Houston, down $33/mt week on
week, based on price indications for rail cars at 50 cents/lb for traders
from producers. The price includes an additional 3 cent ($66/mt)
added to factor in bagging and transportation to port costs, per market
feedback. Hexene was assessed at $$1,168-$1,190/mt (53-54 cents/lb)
FAS Houston, down $22/mt, based on rail car pricing indications at
50-51 cents/lb. Metallocene was assessed at $1,213-$1,235/mt (55-56
cents/lb) FAS Houston, down $44/mt week on week, based on rail car
pricing indications at 52-53 cents/lb. October domestic butene
contracts were assessed at 64-65 cents/lb for delivered rail cars,
unchanged week on week and stable from September, with October
domestic pricing heard rolling over.
Asia
CFR China prices fall $30/mt
„„
Southeast Asia stable; India softens
„„
Linear low-density polyethylene assessments in Asia were stable to
lower this week, with spot pricing down $30/mt for the period. Butene-
grade LLDPE was assessed Wednesday at $1,130/mt CFR Far East Asia,
with market sources indicating workable pricing at that level. Market
sources’ assessment of the Chinese market ranged from firm to
lukewarm this week, with some sellers complaining of limited buy
interest, and one describing it as “hand to mouth.” Pricing in Southeast
Asia was stable, with butene grade LLDPE assessed at $1,180/mt CFR
basis after offers were heard at the $1,200/mt CFR level. Similar
descriptions in terms of demand were heard in Vietnam, where
sentiment, not necessarily fundamentals, was dictating pricing, a
trading source said. Spot import pricing in India fell $10/mt for the
period to $1,190/mt CFR basis, with market sources indicating trading
levels at $1,180-$1,190/mt but subdued buy interest ahead of the Diwali
holiday. Another source said PE sentiment was bearish because of
oversupply, saying inventories were on the high side and resin available
for delivery in the local market.
Rationale
CFR Far East Asia: Butene-grade was assessed at $1,130/mt, down
$30/mt week on week, based on trading indications at that level.
Metallocene was assessed at $1,330/mt, down $30/mt, maintaining a
$200/mt premium. China’s domestic butene grade price was Yuan
9,450/mt, down Yuan 250/mt week on week, and Yuan 50/mt below the
lowest offer at Yuan 9,500/mt to account for negotiation. CFR
Southeast Asia: Butene-grade was assessed flat week on week at
$1,180/mt, based on offers at $1,200/mt and discounted $20/mt for
negotiation. Metallocene was assessed at $1,380/mt. CFR South Asia:
Butene-grade was assessed at $1,190/mt, down $10/mt week on week,
based on trading indications at that level. Metallocene fell $10/mt to
$1,390/mt. CORRECTION: The rationale published October 19 should
give the increase as $30/mt: The CFR South Asia market was assessed
up $30/mt at $1,200/mt, based on tradable indications heard at
$1,200-$1,210/mt CFR South Asia.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Latin America
West Coast demand dipping: market sources
„„
Seasonal end-user production up in Brazil: sources
„„
Linear low-density polyethylene import pricing for the Pacific Coast of
South America dropped $5/mt for the week, assessed Wednesday at
$1,270-$1,280/mt CFR WCSA on the basis of lower US-origin pricing,
sources said. Market sources have talked West Coast demand lower
recently, with regional distributors being heard to drop prices in the
interest of doing deals. As has been the case in recent weeks, a dip in
pricing has not swayed buyers from continuing to take minimal
volumes to maintain inventories due to anticipation that pricing will
continue to fall in the short term. In Brazil, the LLDPE import marker
also fell, assessed $15/mt lower Wednesday at $1,275-$1,285/mt CFR
basis, based on lower trading levels for US-origin material. Regional
sources said demand has been improving as end users ramp up
seasonal production, adding that the US and Middle East remain the
most viable options due to Asia’s rising pricing and freight rates.
Market sources also point to a stronger Real and improving consumer
confidence following recent political turmoil with both being factors
driving up demand for imports. The export assessment, meanwhile,
remained flat at $1,365-$1,375/mt FOT basis as market sources
continue to cite more international availability of LLDPE and
competitive pricing from the US.
Rationale
CFR WCSA: LLDPE fell $5/mt week on week to $1,270-$1,280/mt
CFR WCSA, based on trading levels for US-origin material talked at
$1,270-$1,280/mt CFR basis. The assessment was made at the
trading level. CFR Brazil: LLDPE dropped $15/mt week on week to
$1,275-$1,285/mt CFR, based on trading levels for US-origin
material talked at $1,280/mt CFR basis. The assessment was made
at the trading level. FOT Brazil: LLDPE remained flat for the week at
$1,365-$1,375/mt FOT basis, based on offers at $1,490/mt CPT
Paraguay for Brazil-origin material. The assessment deducts $100/
mt for freight and $20/mt for negotiation.
High-Density Polyethylene
Europe
Bullish ethylene expectations prevent cheaper HDPE
„„
November expected to be a repeat of October
„„
Northwest European high density polyethylene, injection grade, contract
prices were assessed flat from September concluding October at Eur1,400/
mt FD. All grades of HDPE assessed by S&P Global Platts followed injection
to be assessed at a rollover from September. The majority of market
participants said demand had outweighed supply this month across the
HDPE market. HDPE blow molding however may have been different
depending on buyer location in Europe, with the Benelux region reported
tight. “The exception [to rollover on other HDPE grades] is HDPE blow
8
POLYMERSCAN october 26, 2016
molding where we recovered monomer,” a producer source said. Looking
ahead current supply-demand fundamentals were expected to carry
forward to November. “November should be a repeat of this month,” a
source at a large converter said. As in October, feedstock ethylene is
expected to increase next month. Platts ethylene contract price indicator
for November showed an increase of Eur41/mt above the industry CP of
Eur940/mt for October. Expectations for ethylene have turned bullish amid
increases in its primary feedstock in Europe, naphtha. PE prices, on typical
behavior by producers to destock towards the end of the year, should not
follow increased feedstock costs in November, sources said. “Some things
never change. Producers are not going to keep stocks and let that hit their
balance sheet,” a trader source said. Looking to next year, security of
polyethylene supply in 2017 will remain a significant concern for customers
and is expected to boost purchasing as it did in the first half of 2016,
European PE producers said this week. The effect of an unprecedented
number of PE plant outages in the summer of 2015 has lasted till now,
encouraging buyers to purchase more ahead of summer this year and was
expected to do the same next year, producers have said. European HDPE
spot prices were assessed at Eur1,200/mt FD NWE for injection grades
Wednesday, flat on the week. “People are looking at ethylene expectations
to increase so prices shouldn’t be falling,” a trader source said.
Rationale
European high density polyethylene spot prices were assessed at
Eur1,200/mt FD NWE for injection grades Wednesday, flat on the week.
Blow molding prices were also assessed flat at Eur1,200/mt FD NWE.
Film prices were assessed at Eur1,190/mt, flat on the week. Prices were
indicated as stable: subdued demand had not pulled down prices on
bullish feedstock expectations. Contract prices were assessed flat on
the month at Eur1,400/mt FD NWE. Settlements had been heard at a
rollover from September pricing or higher for blow molding in Benelux
only. S&P Global Platts priced in line with the most repeated settlement
of a rollover on all assessed grades of HDPE.
Africa & Turkey
Petkim raises LDPE list prices
„„
Asian LDPE prices up on film demand
„„
Low density polyethylene prices were were up in Turkey, following an
increase in Asian prices. Turkish prices were $1,257/mt CFR, up $11/mt
on the week. Turkey’s Petkim has increased the list prices of LDPE,
PVC and PP by $15/mt amid rising prices in Asia, a source close to
company said. “Turkey’s prices are low compared to Asia so there is
potential upside to prices. Offers [from the Middle East, Europe etc] are
limited because of the lower netback as Asian prices are higher,” he
said. In the high density PE market, Uzbekistan’s HDPE plant had
restarted following a maintenance. Uzbek product was heard changing
hands at $1,120/mt CFR Turkey.
Rationale
LDPE Turkish prices were up $1,257/mt CFR, up $11/mt on the week. SP
Global Platts assessed at peg at $1,180/mt CFR Turkey, subject to 6.5%.
CFR North Africa was assessed at $1,210/mt up $10/mt on the week,
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
pulled up bullish Turkish market. HDPE CFR Turkey was assessed at
$1,154/mt, up $6/mt on the week, assessed at the trade heard at $1,120/
mt CFR Turkey subject to 3% duty (Ex Uzbekistan). LLDPE CFR Turkey
was assessed at $1,212/mt, up $32/mt on the week, below Middle East
offers at $1,130-1,140/mt CFR, tracking gains in other PE grades.
United States
Availability heard improving
„„
October contracts roll over
„„
US high density polyethylene FAS Houston assessments moved $33-
$44/mt lower on the week, with sources saying pricing had moved
lower as more product was becoming available for export. HDPE
blowmolding was assessed at $1,080-$1,102/mt (49-50 cents/lb) FAS
Houston, down $44/mt week on week. HDPE injection was assessed at
$1,080-$1,102/mt (49-50 cents/lb) FAS Houston, down $33/mt on the
week. HDPE HMW film was assessed at $1,102-$1,124/mt (50-51 cents/
lb) FAS Houston, down $33/mt week on week. Assessments for HDPE
export resin are at the lowest level since the summer, with the
blowmolding assessment at the lowest point since August 1, injection
at its lowest level since July 20 and HDPE HMW film at its lowest level
since June 1, according to S&P Global Platts data. Lower prices had
been expected as market participants have said more HDPE resins
have become available for export, with some possibly due to lower
domestic demand, sources said. Domestic contracts were assessed
stable for October at 66-67 cents/lb ($1,455-$1,477/mt) delivered rail
car basis for blowmolding, 66-67 cents/lb ($1,455-$1,477/mt) for
injection and 69-70 cents/lb ($1,521-$1,543/mt) for HMW film. Contracts
were heard rolling over for the month as buyers were expected to push
for decreases in November and December, sources said. There were
growing calls for prices to fall by 2-3 cents/lb in the coming months,
though some sources also have suggested producers could turn to the
export market in an attempt to manage inventories and potentially
push off decreases until Q1. Data released Tuesday by the American
Chemistry Council showed PE stock in the US and Canada decreased
almost 2.8% in September as slower sales were offset by a cutback in
production. HDPE inventories, however, were up 4% at almost 1.39
billion lb. Total PE sales were at more than 3.36 billion lb, down 8.4%
from the previous month, while production was at more than 3.2 billion
lb, down 4.5% from the previous month. Upstream, spot ethylene
prices continued to move lower, with the prompt month last assessed
Tuesday at 26.25 cents/lb FD USG, a drop of 4.5 cents from last
Wednesday. Market sources have pointed to healthy availability as
turnarounds come to an end and some sellers working to lower
inventories before the end of the year.
Rationale
The blowmolding export price was assessed at $1,080-$1,102/mt (49-50
cents/lb) FAS Houston, down $44/mt week on week, based on rail car
indications of 46-47 cents/lb. The assessment factors in packaging and
transportation to port costs of around 3 cents/lb ($66/mt) on top of bulk rail
car prices, per market feedback. Injection was assessed at $1,080-$1,102/
mt (49-50 cents/lb) FAS Houston, down $33/mt on the week, based on rail
9
POLYMERSCAN october 26, 2016
car pricing indications at 46-47 cents/lb. HDPE HMW film was assessed at
$1,102-$1,124/mt (50-51 cents/lb) FAS Houston, down $33/mt week on
week, based on pricing indications at 47-48 cents/lb for bulk rail car pricing.
October domestic contracts were assessed at 66-67 cents/lb ($1,455-
$1,477/mt) delivered rail car basis for blowmolding, 66-67 cents/lb ($1,455-
$1,477/mt) for injection and 69-70 cents/lb ($1,521-$1,543/mt) for HMW film.
Domestic assessments were stable week on week based on pricing
indications from market sources as October pricing was heard rolling over.
Asia
Film falls $30/mt in SE Asia on Mid East offers
„„
India market bearish on oversupply, holiday
„„
High-density polyethylene pricing was stable to lower in Asian markets
this week, with firm pricing seen in China and slowing demand in India
ahead of the Diwali holiday. Film-grade was assessed Wednesday at
$1,150/mt CFR Far East Asia, stable week on week and maintaining a $10/
mt premium over blowmolding and injection grades. Market participants
described the China market as firm, but noted that bids for deepsea
cargo were on low side, which could suggest weakness ahead. In
Southeast Asia, pricing was stable to lower, pressured lower by Middle
East-origin material, sources said. Film-grade was assessed down $30/
mt week on week at $1,130/mt CFR Southeast Asia. Blowmolding and
injection grades fell $10/mt each to $1,140/mt CFR basis, while yarn was
stable at $1,170/mt after a seller said business was being conducted at
those levels, if slowly. A trader source in Vietnam described the market as
“wait and see” in terms of demand, with sentiment driving prices. In
India, HD grades fell $10/mt week on week to $1,160/mt CFR South Asia,
with sources describing the market as slowing ahead of the Diwali
holiday over the weekend. Buyers were subscribing to just-in-time
inventory management, sources said. Another source said oversupply in
the market was leading to bearish sentiment ahead of the holiday.
Rationale
CFR Far East Asia: Film-grade was assessed at $1,150/mt Wednesday,
stable week on week. The assessment was based on the lower end of
trading indications at $1,150-$1,160/mt. Domestic China: The
assessment at Yuan 9,700/mt ex-works was based on offers at Yuan
9,800/mt and discounted Yuan 100/mt for negotiation. CFR Southeast
Asia: Film-grade was assessed at $1,130/mt, down $30/mt week on
week. The assessment was based on trading indications at $1,130/mt
CFR Vietnam. CFR South Asia: Film-grade was assessed at $1,160/mt,
down $10/mt week on week. The assessment was based on trading
indications at $1,150-$1,160/mt CFR basis.
Latin America
Brazil demand up as confidence improves
„„
WCSA prices lower amid limited activity
„„
High-density polyethylene import assessments along the West
Coast of South America were each down $10/mt for the week, as
lower pricing from the US helped offset what regional sources
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 10
termed poor demand and excess local supply. Film was assessed at
$1,190-$1,200/mt CFR basis; injection was assessed at $1,185-$1,195/
mt CFR basis; and blowmolding was assessed at $1,215-$1,225/mt.
Local sources said market activity has been minimal over the past
week and regional distributors have reduced prices offered to end
users as a means of facilitating deals and moving product ahead of
the close of the month. With US pricing heard moving lower, there
were expectations that import pricing to the region could drop.
Sources on both sides of the continent also said offers from Asia
has been on the rise, as well as shipping rates from that region,
making material from the Far East less attractive when compared
with the US and its lower prices. In Brazil, all three grades of HDPE
were flat on the week Wednesday, with injection at $1,205-$1,215/mt
CFR basis; film at $1,220-$1,230/mt CFR basis; and blowmolding at
$1,200-$1,210/mt CFR basis, all based on trading levels for Middle
East-origin material. Market sources in the region said demand has
been improving, both on a seasonal front and due to improved
consumer confidence following recent political turmoil. US and
Middle East material was deemed the most competitive into Brazil.
In the Brazilian export market, HDPE injection was flat for the week,
assessed Wednesday at $1,275-$1,285/mt FOT Brazil, based on
offers of $1,400/mt CPT Paraguay for Brazil-origin material. HDPE
film was stable at $1,305-$1,315/mt FOT basis, based on offers out of
Brazil of $1,430/mt CPT Paraguay. Blowmolding was flat at $1,270-
$1,280/mt FOT basis, based on Brazil-origin offers at $1,395/mt CPT
Paraguay. The FOT assessments subtract freight costs estimated at
$100/mt, as well as $20/mt for negotiation, per market feedback.
Rationale
CFR WCSA: Injection-grade HDPE was assessed down $10/mt at $1,185-
$1,195/mt CFR basis. HDPE film was assessed down $10/mt at $1,190-
$1,200/mt CFR basis. Blowmolding was down $10/mt at $1,215-$1,225/
mt. No firm bids, offers or deals were heard Wednesday. In the absence
of firm pricing indications, assessments were $10/mt lower to account
for weak demand and expectations of lower pricing for US-origin resin.
CFR Brazil: Injection-grade HDPE was flat at $1,205-$1,215/mt CFR,
based on Middle East-origin trading levels of $1,205-$1,215/mt CFR
Brazil. HDPE film was stable at $1,220-$1,230/mt CFR, based on Middle
East-origin trading levels of $1,220-$1,230/mt CFR Brazil. Blowmolding
was flat at $1,200-$1,210/mt CFR, based on Middle East-origin trading
levels of $1,200-$1,210/mt CFR Brazil. The assessments were all made
at their respective trading levels.
Polypropylene
Europe
Copol, high melt flow homo seen short
„„
Stronger dollar boosts exports
„„
European homo injection polypropylene contract prices were
assessed at Eur1,185/mt FD NWE on Wednesday, up Eur35 since the
beginning of October on gains in the monomer contract, while spot
POLYMERSCAN october 26, 2016
European homo injection PP was assessed at Eur1,030/mt, flat on
the week. Industry sources continued to report a balanced market
with tightness in copolymer and in the high melt-flow homo
injection grades. One trader saw tightness in 20-45 copol melt-
flow, noting that a large producer had not been able to meet his
request, which he attributed to the tightness in propylene seen in
September and early October. Producers continued to report good
demand for October — although one producer said it was “not
sparkling” — and said that they were running at full capacity in
order to meet demand or, in certain instances, build stocks ahead
of the heavy cracker maintenances in H1 2017. By contrast many
buyers reported weaker demand this month receiving special
offers at discounted rates. Dutch PP producer Ducor has brought
forward its planned spring 2017 maintenance at its Rozenburg site
in The Netherlands amid concerns over a PP shortage in March-
May as a result of the cracker maintenances, a company source
said at K fair in Dusseldorf, Germany on Monday. Consumers have
in recent weeks expressed mixed expectations for H1 2017,
however, with several consumers reporting confidence in their
ability to secure PP. A trader attributed this confidence to a
“smoother 2016,” following a spree of force majeures in 2015.
Technical issues at polymer plants in Europe stemming from high
utilization rates, combined with ageing technology, resulted in
more than 50 declarations of force majeure by the end of summer
2015, Ron Marsh, chairman of Polymers for Europe Alliance, said.
The trader source added that a stronger dollar had lifted exports
and that this could continue into 2017, which would benefit
producers and distributors by tightening the market.
Rationale
EU PP contract prices were assessed at Eur1,185/mt FD NWE
Wednesday, up Eur35 since the beginning of October, and
replicating the Eur35/mt gain seen in propylene. Spot homo
injection prices were assessed at Eur1,030/mt FD NWE, flat on the
week. The most competitive indications were found at Eur1,020-
1,050/mt FD NWE, with the full range of indications from Eur980-
1,100/mt. Platts assessed at Eur1,030/mt, which was seen to be
the most repeatable level.
Africa & Turkey
Nov stability expected
„„
Korean offers heard in W.Africa
„„
Turkish PP prices were stable on the week at $1,060/mt CFR, with
stability expected to carry into next month. “PE, PP prices are looking
stable (going into November),” an African trader said, pegging CFR
West Africa prices at $1,000-1,020/mt ex-South Korea.
Rationale
Turkish PP prices were steady on the week at $1,060/mt with a Middle
East offer at $1,030-1,035/mt CFR Turkey, subject to 6.5% duty, not
disproving last week’s price.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
United States
Sales, export drop; inventories build: ACC
„„
Feedstock CP expected lower for November
„„
US spot homopolymer injection-grade polypropylene was assessed
Wednesday at $1,025-$1,047/mt (46.5-47.5 cents/lb) FAS Houston,
down $11/mt for the week, with sources describing demand as weak
and pointing to lower spot propylene pricing. Spot co-polymer was
assessed at $1,124-$1,146/mt (51-52 cents/lb) FAS Houston, down $11
week on week. Export homopolymer pricing was heard at 46-47 cents/
lb for bagged material throughout the week. In industry news, sources
characterized the market as slow with weak demand. Inventories saw
a build while sales and exports saw a drop this month, final monthly
American Chemistry Council data showed. US PP sales in September
totaled 1.386 billion lb, down 7.30% from the 32-month high of 1.513
billion lb in August, ACC data showed. Exports declined 36% in
September to 41.145 million lbs, total production in fell 6.9% to 1.386
billion lb, and inventories saw a build of 412,000 lb, the data showed.
Feedstock propylene, which on Wednesday closed at 38 cents/lb FD
USG, has shed 5 cents/lb — or 12% — since September 20 on market
talk of inventory management and motivated sellers. Domestic
contract pricing for October was assessed at 60.75-61.75 cents/lb
($1,339-$1,361/mt) rail-car basis for homopolymer injection grades.
Wednesday’s assessment was 0.25 cent/lb lower week on week, as
contract PP tends to follow polymer-grade propylene CP movements.
Market participants indicated that expectations for October PGP
contract pricing called for a 0.5-1 cent/lb decrease settlement.
Rationale
US spot export pricing was assessed Wednesday at $1,025-$1,047/mt
(46.5-47.5 cents/lb) FAS Houston for homopolymer injection grades,
down $11/mt for the week, based on weaker demand and rail-car
pricing at 44-45 cents/lb FOB Houston and accounting for bagging and
transportation-to-port costs totaling an additional 3 cents/lb ($66/mt).
Co-polymer spot for export was assessed $11/mt lower for the week at
$1,124-$1,146/mt (51-52 cents/lb) FAS Houston, maintaining the 3.5
cent premium over homopolymer. Domestic contract pricing was
assessed 0.25 cent lower at 60.75-61.75 cents/lb rail car for
homopolymer injection grade and at 62.75-63.75 cents/lb for
homopolymer fiber grade on expectations of a 0.5-1 cent/lb decrease
settlement from September pricing. The fiber-grade assessment was
assessed at a 2-cent/lb premium to homopolymer injection grades.
Asia
DCE Jan futures up about Yuan 300/mt on week
„„
Domestic China PP up Yuan 200/mt on week
„„
Asian polypropylene prices surged $30/mt week on week to $1,020/mt
CFR Far East Asia Wednesday, boosted by surging PP raffia futures on
the Dalian Commodity Exchange, industry sources said. The actively
traded January 2017 contract on the DCE closed at Yuan 8,172/mt
11
POLYMERSCAN october 26, 2016
Wednesday, surging Yuan 298/mt week on week. “Investment money
has been flowing out of the Chinese housing and stock markets and
into commodity futures recently. The price upswing we’ve seen on the
DCE this week is a reflection of [this],” a trader said, adding that “the
government has been taking measures to cool the housing market.”
Domestic China spot price reacted to the higher futures prices, rising
Yuan 200/mt week on week to Yuan 8,250/mt, or up $20/mt at $978/
mt on an import parity basis. Deals were heard done at $1,020/mt on a
CFR basis highlighting the bullish buying sentiment this week, traders
said. The CFR Southeast Asia PP raffia marker was assessed up $15/mt
week on week at $1,040/mt Wednesday, after Saudi Aramco offered a
cargo into Vietnam at $1,050/mt CFR SEA. Offers for South Korea-
origin cargoes were at a similar level on CFR SEA basis. But end-users
were hesitant to purchase large volumes this week, traders said. The
CFR South Asia PP raffia marker rose $6/mt week on week to be
assessed at $1,045/mt Wednesday, on Middle East origin offers heard
at $1,050/mt against buying indications at $1,040/mt CFR South Asia.
“Global demand sentiment has been strong in recent weeks.
November and December [PP prices] are expected to be stable to
strong, especially with the [upcoming] Reliance shutdown,” said an
Indian producer. “India [PP demand] is expected to be bullish in the
fourth-quarter, after the Diwali [holidays],” he added. Reliance
Industries Ltd. will begin a 25-day scheduled maintenance at its
Domestic Tariff Area PP lines with a nameplate capacity of 1 million mt/
year at Jamnagar, Gujarat, starting November 11, company sources
have said. RIL is expected to begin scheduled maintenance of its
Special Economic Zone lines with another 1 million mt/year of PP raffia
capacity around end-November or early-December.
Rationale
Polypropylene raffia surged $30/mt week on week to e assessed at
$1,020/mt CFR Far East Asia Wednesday, with deals heard done at that
level and offers heard at $1,030-$1,040/mt. China domestic raffia
surged Yuan 200/mt to Yuan 8,250/mt on deals heard at that level. The
CFR Southeast Asia raffia price increased $15/mt over the same period
and was assessed at $1,040/mt Wednesday, based on offers heard at
$1,050/mt from the Middle East and tradable indications of $1,040/mt
CFR Southeast Asia. The CFR South Asia raffia price was assessed at
$1,045/mt, up $6/mt week on week, with an offer heard at $1,050/mt
and a buying indication heard around $1,040/mt CFR South Asia. IPP
Film, BOPP and block copolymer assessments were based on spreads
heard against PP raffia.
Latin America
US-origin offers fading: sources
„„
Brazilian demand continues to grow
„„
Polypropylene import pricing along South America’s West Coast
stabilized on the week as trading continued to trickle along slowly,
sources said. Buyer sources attributed the recent K Fair in Dusseldorf,
Germany, while sellers pointed to depressed demand and buyers
shrugging off higher price levels. Homopolymer grades were flat on the
week, assessed Wednesday at $1,090-$1,100/mt CFR WCSA. Trading
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
was talked at $1,090-$1,100/mt level. Copolymer grade was also stable
at $1,140-$1,150/mt CFR basis, maintaining the $50/mt premium to
homopolymer. Offer levels were generally talked at $1,120-$1,150/mt
range from regions as varied as Asia, the Middle East and regionally
from Chile and Colombia. One US-based trader said the market should
be at $1,140/mt but that buyers were not responding. Still, some sellers
said selling at $1,110/mt could be considered the floor. Talk of US-origin
exports to the region were heard diminishing as US offers to traders
firmed up and domestic demand limited export availability. In Brazil,
talk of a spur in demand continued this week with participants noting
higher levels accepted in the region. The import assessment was up
$20/mt week on week to $1,115-$1,125/mt CFR Brazil for homopolymer
and $5/mt to $1,155-$1,165/mt CFR Brazil for copolymer. Domestically,
Brazil’s Braskem was heard keeping PP pricing stable for the week
market sources said. In exports to the Mercosur region, the FOT Brazil
homopolymer assessment homopolymer price was stable at $1,140-
$1,150/mt FOT basis, based on Brazil-origin offers at $1,265/mt CPT
Paraguay. Co-polymer pricing was flat at $1,170-$1,180/mt FOT Brazil.
Rationale
CFR WCSA: Homopolymer and copolymer were flat week on week,
assessed Wednesday at $1,090-$1,100/mt and $1,140-$1,150/mt CFR.
Homopolymer trading levels were talked at $1,090-1,100/mt CFR. The
assessment was made at the deal level. Co-polymer was heard at a
$50/mt premium and was assessed at that level. CFR Brazil:
Homopolymer was assessed $20/mt higher week on week at $1,115-
$1,125/mt CFR, based on a deal talked at $1,120/mt. Co-polymer was
$5/mt higher at $1,155-$1,165/mt CFR, based on talk of a $40/mt
premium to homopolymer grade. FOT Brazil: Homopolymer was flat at
$1,140-$1,150/mt, based on Brazil-origin offers at $1,265/mt CPT
Paraguay. Co-polymer was stable at $1,170-$1,180/mt, based on Brazil
offers at $1,295/mt CPT Paraguay. The assessments subtract $100/mt
for freight costs and $20/mt for negotiation.
Polystyrene
Europe
Egyptian Estyrenics offers PS into Europe
„„
BASF’s PS Oct sales down on Ludwigshafen issues
„„
The general purpose polystyrene net contract price was assessed down
Eur5/mt on the week and declining Eur45/mt on the month. Most GPPS
contracts have now been agreed, with the repeatable level heard at a
Eur45/mt decrease to September. The fall, however, is smaller than the
styrene monomer contract price which was settled at Eur985/mt, a Eur50/
mt decline on the month. Expectations for the November styrene contract
price have been heard as bullish. Styrene spot prices have edged higher
following the explosion at BASF’s petrochemical complex in Ludwigshafen,
Germany. The spot price was assessed at $989.50/mt FOB ARA
Wednesday, up $67/mt from two weeks ago, and before the explosion. In
addition, the weaker euro exchange rate will support the November CP,
sources said. Sources added that this will likely filter through to PS
12
POLYMERSCAN october 26, 2016
November prices. BASF’s polystyrene sales volumes have been low in
October as a result of reduced operations at its PS unit in Ludwigshafen, a
company source said. BASF has introduced a strict allocation of PS
products to customers. In trade news, Egyptian Estyrenics has restarted
the sale of polystyrene into Europe. Sidpec (Sidi Kerir Petrochemicals
company), a separate petrochemical company based in Egypt, is offering
Estyrenics PS on its behalf, a source from Sidpec said. Estyrenics was not
immediately available to comment. Estyrenics has been an active PS seller
into Europe until last year, when it ceased production. The latest news
indicates that it has restarted production.
Rationale
The GPPS net contract price was assessed at Eur1,245/mt FD NWE
Wednesday, down Eur5/mt on the week, and down Eur45/mt on the
month, where buy and sell interests converged. The GPPS spot price
was assessed at Eur1,180/mt FD NWE Wednesday, unchanged, and in
line with a source peg. The HIPS premium to GPPS was assessed
unchanged at Eur70/mt for both contract and spot. The EPS CP was
assessed at Eur1,255/mt FD NWE Wednesday, stable on the week, and
down Eur40/mt on the month, in line with a peg. The EPS spot price
was assessed stable on the week, in line with GPPS spot.
Africa & Turkey
Iranian offers heard in Turkey, EU
„„
Egyptian product offered to EU
„„
Polystyrene prices in Turkey and North Africa were at a rollover on the week
at $1,140/mt CFR, amid steady fundamentals. Iranian offers continued to be
heard at steady levels of $1,080/mt CFR Turkey. Iranian offers were also
heard in the EU, sources added. Egyptian Estyrenics has restarted the sale
of PS into Europe, according to sources. Sidpec (Sidi Kerir Petrochemicals
company), a separate petrochemical company based in Egypt, is offering
Estyrenics PS on its behalf, a source from Sidpec said. It had been an active
seller of PS into Europe until last year, when it ceased production. The latest
news indicates it has restarted production.
Rationale
CFR Turkey and CFR North Africa were assessed flat on the week at
$1,140/mt, supported by flat fundamentals. Iranian offers continued to
be heard at steady levels of $1,080/mt CFR Turkey, subject to 6.5%
duty, not disproving last week’s level.
United States
Styrene surges amid tight supply
„„
Fundamentals see little change
„„
Export polystyrene assessments for general purpose and high impact were
unchanged week on week at $1,705/mt FAS Houston and $1,815/mt FAS
Houston on Wednesday. Pricing levels continued to be pegged by market
participants in the mid- to upper-70 cents/lb range for GPPS and in the low-
80 cents/lb for HIPS. Fundamentals of tight supply and stable demand
remained in place, sources said. Market participants were eyeing upward
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 13
movement in feedstock styrene pricing. Pricing in that market recently
moved higher because of tight supply and an increase in Asia demand for
US product, sources said. Styrene spot pricing was assessed Wednesday at
$1,025/mt (46.50 cents/lb) FOB USG. Further upstream, spot benzene
pricing, assessed Wednesday at 220 cents/gal, remained cheaper than the
October contract level of 231 cents/gal ($690.69/mt), which has many
participants expecting a lower settlement for November. Benzene spot
pricing was down 7 cents from a week ago, based on S&P Global Platts
data. Mixed price movements in these two markets kept a rollover in
polystyrene contracts possibility, but an increase would not be a shock
given the $50/mt increase in styrene pricing over the last week, a source
said. October PS pricing, with producer-proposed increases of up to 3
cents/lb, was last heard experiencing resistance from the market.
Domestic contracts were assessed Wednesday at 85-87 cents/lb ($1,874-
$1,918/mt) delivered rail car for GPPS and at 95-97 cents/lb ($2,094-$2,138/
mt) delivered rail car for HIPS with pricing indications for GPPS still heard at
85-87 cents and for HIPS at 95-97 cents/lb. Sources pegged HIPS pricing at
its typical premium of 9-11 cents/lb above GPPS pricing.
Rationale
The spot GPPS assessment was at $1,705/mt FAS Houston, stable
week on week. The assessment was based on market indications in
the mid- to upper-70s cents/lb range. The FAS Houston assessment
factors in packaging and transportation to port costs of around 3
cents/lb ($66/mt) on top of bulk rail-car prices. The HIPS assessment
at $1,815/mt FAS Houston, also stable week on week, was based on the
typical premium to GPPS talked at 5 cents/lb ($110/mt). US domestic
polystyrene was assessed at 85-87 cents/lb ($1,874-$1,918/mt)
delivered rail car for GPPS and 95-97 cents/lb ($2,094-$2,138/mt)
delivered rail car for HIPS, based on pricing indications at 85-87 cents/
lb for GPPS and 9-11 cents/lb higher for HIPS.
Asia
Activity quiet after sharp price increase
„„
Japan’s PS output rises 18% in Sep
„„
General purpose polystyrene was assessed stable week on week
Wednesday, staying at a three-month high. High-impact PS was also flat
Wednesday from the previous week, at five-month high. Trading activities
were quiet this week as buyers and sellers were engaged in a price standoff.
Buyers were reluctant to accept high offers this week, expecting feedstock
styrene monomer prices to come down in the coming month. In addition,
spot demand slowed down as most end-users had secured their cargoes
up to end of November or early December. On the other hand, suppliers
were reluctant to reduce their offer prices, citing tight spot availabilities. In
related statistics news, Japan’s PS production in September rose 18% from
a month earlier to 60,500 mt, the Japan Petrochemical Industry Association
said last Friday. From a year earlier, Japan’s PS production fell 5%.
Meanwhile, China’s GPPS imports in September fell 10.3% from a month
earlier to 51,286 mt, data released Tuesday by the General Administration of
Customs showed. From a year earlier, GPPS imports fell 9.4%. Meanwhile,
China’s EPS exports fell 12.9% from a month earlier and dropped 23.2% from
a year earlier to 20,989 mt, the data showed.
POLYMERSCAN october 26, 2016
Rationale
GPPS was assessed at $1,160/mt CFR China Wednesday, unchanged
from a week earlier. Deal done levels were heard at $1,160-$1,165/mt
CFR China, while a sell idea was heard at $1,170-$1,200/mt CFR China.
In Southeast Asia, GPPS was assessed stable at $1,190/mt CFR SEA
Wednesday, in line with the stable China market. Meanwhile, HIPS was
assessed at $1,245/mt CFR China Wednesday, stable from a week
earlier, with deal done levels heard in a range of $1,220-$1,260/mt CFR
China. In SEA, HIPS price was assessed flat week on week at $1,255/mt
CFR SEA with an offer level heard at $1,260/mt CFR SEA. A spread
between SEA and NEA was heard at $10-$20/mt.
Acrylonitrile Butadiene Styrene
Europe
Ineos Styrolution partners with COM-ITAL
„„
Nov butadiene CP settled at Eur800/mt, up Eur80
„„
Acrylonitrile butadiene styrene net contract and spot prices were
assessed unchanged at Eur1,470/mt and Eur1,365/mt FD NWE
Wednesday respectively. The CFR China ABS price was also assessed
stable on the week at $1,480/mt. ABS sellers in Asia kept high offer
levels, in line with stronger feedstock costs. In Europe, the Northwest
European November butadiene CP was settled at Eur800/mt, rising
Eur80/mt on the month on Tuesday. Sources attributed the rise to
limited butadiene availability in Europe amid rising Asia prices. The
November styrene CP will be settled on November 1. Expectations have
been heard bullish in light of stronger styrene monomer spot prices
and a weak euro exchange rate. European ABS fundamentals in
October were heard to be firm, with all end-use sectors performing
solidly. In other news, Ineos Styrolution has signed a deal with COM-
ITAL, an Italian distribution company, giving it access to Ineos
Styrolution’s entire specialty portfolio. Products include impact-
resistant ABS, UV-resistant ASA, low gloss ABS and specialty ABS.
Rationale
The ABS net contract price was assessed at Eur1,470/mt FD NWE
Wednesday, unchanged on the week and on the month, in line with
source pegs. The ABS spot price was assessed at Eur1,365/mt FD NWE
Wednesday, unchanged, tracking stable conditions in Asia. The CFR
NWE price was assessed at a netback to Asia.
United States
Feedstocks styrene, butadiene continue to rise
„„
Supply-demand fundamentals remain steady
„„
The US acrylonitrile-butadiene-styrene domestic assessment was
unchanged week on week, assessed Wednesday at 97-99 cents/lb
($2,138-$2,182/mt) delivered rail car, as market fundamentals were
stable, sources said. Upward movement in feedstock butadiene and
styrene prices could translate into higher ABS pricing, sources said.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Price indications remained in the upper-90 cents/lb range for
October. Although much of the upward movement in feedstocks was
related to tight supply in those markets, ABS supply was not limited
and fundamentals of steady supply and slow demand held consistent
from a week ago, a source said. The fourth quarter is typically the
slowest period for ABS, a source said. Market participants were
particularly eyeing movement in feedstock styrene prices as, per
industry feedback, styrene composes about 60-65% of ABS, meaning
the market follows styrene and benzene movement more closely
than movement in ACN or butadiene. In feedstocks, spot benzene
was assessed at 220 cents/gal FOB USG Wednesday, down 7 cents on
the week and was now 11 cents/gal lower than the October US
benzene contract price level, which was fully settled at 231 cents/gal
($691/mt). November benzene contract expectations have been
heard in the mid-220s cents/gal range. Styrene prices for October
and November were both assessed Tuesday at 44.25 cents/lb FOB
USG, up 2.25 cents on the week, based on trades at that level. In
other feedstocks, US spot butadiene was last assessed at 53 cents/lb
CIF USG Friday, up 1.5 cents/lb on the week, because of tight supply.
October US butadiene contracts settled at 46 cents/lb ($1014/mt).
There was an initial nomination for the US butadiene contract price at
11 cents/lb, sources said. US spot ACN was assessed Tuesday at
$1,325/mt FOB USG, down $5 on the week.
Rationale
US acrylonitrile-butadiene-styrene was assessed at 97-99 cents/lb
($2,138-$2,182/mt) delivered rail car, stable week on week, based on
October pricing indications in the high-90 cents/lb range.
Asia
Sellers bullish on firm styrene
„„
Buyers on the sidelines amid bearish crude
„„
The Asian acrylonitrile-butadiene-styrene market was stable week on
week at a 15-month high, after a surge of $40-$41/mt the previous
week. ABS suppliers remained bullish, keeping their high offer levels,
which reflect rising styrene monomer feedstock costs. On Wednesday,
the CFR China styrene monomer price jumped $54/mt week on week
to be assessed at $1,063/mt. On the buyers’ side, they were reluctant
to accept high offer levels this week, expecting the styrene market to
come down soon. In addition, Western crude oil futures were weaker
this week, with December ICE Brent futures down $2.16/b from the
previous week to be assessed at $50.28/b at 4:30 pm Singapore time
(0830 GMT) Wednesday. The CFR China butadiene price also slid $50/
mt week on week to be assessed at $1,590/mt Wednesday. In statistics
news, Japan’s ABS shipments rose 5% month on month to 31,806 mt
in September, Japan ABS Resin Industry Association data released
Friday showed. Local ABS shipments rose 12% over the same period to
comprise 19,737 mt of the total, while exports fell 5% to 12,069 mt, the
data showed. Meanwhile, China’s ABS imports in September fell 1.1%
from a month earlier to 144,954 mt, data released Tuesday by the
General Administration of Customs showed. From a year earlier,
China’s ABS imports rose 9.2%.
14
POLYMERSCAN october 26, 2016
Rationale
The spot ABS price was assessed stable week on week at $1,480/mt
CFR China Wednesday. Offer levels were heard at $1,490-1,510/mt CFR
China. In SEA, the spot ABS price was assessed unchanged week on
week at $1,460/mt CFR Wednesday, with a deal reported to have been
done at $1,460/mt CFR SEA.
Polyethylene Terephthalate
Europe
Sellers bullish as euro holds at weak levels
„„
Buyers hold back, PET prices assessed stable
„„
The picture turned slightly cloudy in the European polyethylene
terephthalate market during the week as volatility took grip of the
energy complex. The ICE Brent crude front-month futures contract
briefly dropped below the $50/b mark during Wednesday’s trading
session, which kept many buyers cautious over fixing requirements amid
possibilities of weaker feedstock prices ahead. Meanwhile, the euro
continued trading below $1.10/Eur during the week, which threatened
PET producers with the prospects of higher euro-denominated
feedstock contract prices for November. A seller said he was expecting
an increase of around Eur35-40/mt on the feedstock front, and was
unwilling to sell below Eur900/mt. Meanwhile, many buyers were
adamant they would not pay higher than around Eur870/mt, which kept
the market in a stalemate. Platts assessed spot and freely negotiated
net contract prices stable on the week at Eur880/mt. Meanwhile, with
sterling’s exchange rate largely unchanged from last week, UK prices
also held steady at GBP790/mt, assessed at conversion to euro values. In
other news, some PET producers in eastern Europe were faced with
tight supplies of feedstock purified terephthalic acid. This was due to a
local producer of PTA facing technical issues in its plant, however no
official confirmation was made from the company. Market participants
said this disruption in PTA supply had also led to shortages of PET resin
in the region, which made sellers react bullishly. However, the situation
in other regions remained calm and did not seem to follow suit of the
developments in eastern Europe. R-PET: Prices of recycled PET in
Europe moved sideways on the week at Eur720/mt and GBP615/mt, in
Continental Europe and the UK respectively. Demand had remained
largely stable, whereas supplies of feedstock baled bottles also
remained streamlined. This had kept market fundamentals largely
balanced, and did not pressure recyclers to engage in aggressive price
negotiations. Sentiment was also stable for November price
expectations amid no issues in supplies. With prices in the virgin
segment having firmed in the past few weeks, buyers in Europe
currently had healthier discounts on their flakes versus virgin levels. The
flake to virgin discount was wider in the UK, as the pound’s value
plummeted in the past quarter, while UK flake prices remained stable
amid largely unchanged feedstock baled bottle prices. Together with
deteriorating import economics, this led to an uptick in inquiries for UK
flakes, however recyclers were more keen to expand contractual
business with their core customers rather than servicing spot business.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Rationale
The NWE spot price was assessed at Eur880/mt FD NWE Wednesday,
unchanged on the week and assessed within the Eur840-910/mt
range heard. The European net contract price was also assessed
stable at Eur880/mt FD NWE Wednesday, at unchanged parity to
spot prices. The spot PET price held steady at GBP790/mt FD UK,
assessed at conversion to euro prices, while the UK net contract
price was also assessed unchanged at parity to spot at GBP790/mt.
Platts assessed R-PET stable at Eur720/mt FD NWE, in line with
indications heard. R-PET was assessed at GBP615/mt FD UK,
unchanged from last Wednesday.
United States
Participants monitor Brazil situation
„„
Domestic pricing follows higher feedstock
„„
US spot polyethylene terephthalate remained stable week on week,
assessed Wednesday at $1,069-$1,091/mt (48.50-49.50 cents/lb) DDP
US West Coast, with market participants monitoring feedstock pricing
and a potential sale in Brazil. Market sources said spot pricing
remained around 49 cents/lb DDP US West Coast, with the recent
imports from Brazil continuing to pressure pricing lower. The presence
of the lower-priced Brazilian material has impacted margins for
importers bringing in product from Asia as freight rates from the
region have risen, sources said. “Pricing is still an issue due to Brazil
imports,” a source said. “I believe their strategy is to stay 1 cent/lb
below others.” The inflow of material from Brazil has started to slow,
and the product coming in has been at firmer prices, a source said.
Another source said the imports of Brazilian product have been fairly
steady but that buyers have started to evaluate where to source
material should the imports slow down. Brazilian material has been
more present in the market this year with producer Petroquimica
Suape in negotiations for a sale. Alpek, the parent company of DAK
Americas, has considered purchasing the Petrobras-owned PET
producer. A 30-day window, an extension from the original 60-day
exclusive negotiation period, ends this week. “Please note that
discussions between Alpek and Petrobras may continue after the
expiration of the exclusive negotiation period,” a spokesman said
Wednesday. “Currently, there is no news related to this matter.” Alpek’s
subsidiary DAK Americas produces PET in the US, Mexico, Canada and
Argentina. The assets of PQS and Citepe include a 700,000 mt/year
purified terephthalic acid plant and a 450,000 mt/year PET plant in
Ipojuca, Pernambuco, Brazil. US domestic contract pricing was
assessed at 1,202-1,224/mt (54.50-55.50 cents/lb), up 0.50 cent week
on week. The increase came after October pricing for feedstock PTA
rose 0.50 cent to 41.49 cents/lb, with PET contract pricing heard
tracking the movement in PTA. The October US monoethylene glycol
contract also rose for the month, up 1.40 cents to 32.40-32.90 cents/lb.
US spot MEG was assessed Friday at 28.50-29.50 cents/lb ($628-$650/
mt) FOB USG, up 0.50 cent week on week. Global pricing was flat to
slightly higher week on week. Asian spot pricing gained $6 to $870/mt
FOB Northeast Asia and $873/mt FOB Southeast Asia, following higher
MEG pricing. European spot held at Eur880/mt FD NWE.
15
POLYMERSCAN october 26, 2016
Rationale
US spot polyethylene terephthalate was assessed Wednesday at
$1,069-$1,091/mt (48.50-49.50 cents/lb DDP US West Coast, flat week
on week. The assessment came with market sources talking the price
at 49 cents/lb DDP USWC. Domestic contracts were assessed at
$1,202-1,224/mt (54.50-55.50 cents/lb), up 0.50 cent week on week,
with pricing talked at that level and tracking the rise in October pricing
for feedstock purified terephthalic acid.
Asia
MEG supply tight on reduced runs
„„
Demand seen increasing from India
„„
Asian polyethylene terephthalate rose $6/mt this week due to an
increase in feedstock monoethylene glycol costs. Spot MEG prices are
at a six-month high, with sources pointing to firm upstream markets
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
and overall firm sentiment as the key drivers. MEG was assessed at
$667/mt CFR China Wednesday, close to a 27-week high. Supporting
the higher prices, MEG supply was tight due to production issues, such
as the run rates heard in the 50%-60% range at Shell’s MEG plant at
Pulau Bukom in Singapore stemming from a recent cracker shutdown,
as well as talk of impacted production in Germany and in the US Gulf
Coast region. In addition to the higher MEG prices, short-covering by
major Chinese financial and futures traders was supporting prices.
There were also some indications of an uptick in regional demand or
demand for PET bottle chips from India this week.
Rationale
PET bottle grade was assessed up $6/mt week on week at $870/mt
FOB Northeast Asia and $873/mt FOB Southeast Asia Wednesday, with
transacted levels heard around $870/mt FOB China for November
loading/delivery. The Southeast Asia assessment tracked the gains in
the Northeast Asia market.
16
POLYMERSCAN october 26, 2016

Polymer Feedstocks: Olefins

Polymer Feedstocks – Ethylene Polymer Feedstocks – Ethylene Glycol Assessments (cont)

Europe US (¢/lb)
Spot Friday Weekly Average Spot Friday
FD NWE (Eur/mt) 906.00-910.00 890.600-894.800 FOB USG A/F* 28.50-29.50
CIF NWE ($/mt) 974.00-979.00 964.600-969.000
CIF MED ($/mt) 974.00-979.00 – Fiber Grade Monthly Contract Price (Oct ): 32.40-32.90 FOB USG

Monthly Contract Price (Oct): 940.00-940.00 FD NWE (Eur/mt)
US (¢/lb)
Spot Friday Weekly Average
FD USG M1 OCT 29.500-30.000 30.125-30.625
FD USG M2 NOV 29.500-30.000 30.100-30.600
Net Contract Price (OCT ): NA-NA Delivered
Asia ($/mt)
Spot Friday Weekly Average
FOB Korea 1019-1021 –
CFR SE Asia 1029-1031 1037.0-1039.0
CFR NE Asia 1059-1061 1067.0-1069.0
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand.
Polymer Feedstocks – Propylene
Europe (Eur/mt)
Poly Grade Spot Friday Weekly Average
FD NWE 714.00-719.00 711.000-715.600
CIF NWE 707.00-711.00 703.600-708.200
Chem Grade Spot Friday Weekly Average
FD NWE 670.00-674.00 –
CIF NWE 640.00-644.00 –
Poly Grade Monthly Contract Price (Oct): 725.00-725.00
US (¢/lb)
Spot Friday Weekly Average
dlvd USG dlvd USG
Poly Grade M1 OCT 38.250-38.750 38.750-39.250
Poly Grade M2 NOV 38.250-38.750 38.750-39.250
Ref Grade 27.250-27.750 27.650-28.150
Asia ($/mt)
Spot Friday Weekly Average
CFR China 655-657 643.4-645.4
CFR SE Asia 658-660 (1) –
MEG CP Nomination (OCT) – CFR Asia
MEGlobal: 790 Sabic: 790 Shell: 780
(1) CFR SE Asia = CFR Indonesia.Note: *A/F denotes anti-freeze grade Asian ethylene glycol assessments are
basis L/C 90 days.
Polymer Feedstocks – Butadiene
Europe
Spot Friday Weekly Average
FD NWE (Eur/mt) 983.00-987.00 983.400-987.400
FOB Rdam ($/mt) 1148.00-1152.00 1128.000-1132.000
Butadiene Monthly Contract FD NWE OCT: 720.00-720.00 (Eur/mt)
US (¢/lb)
Spot Friday
CIF USG 52.50-53.50
Monthly Contract Price (OCT ) 46.00-46.00
Asia ($/mt)
Spot Friday Weekly Average
FOB Korea 1599-1601 1599.00-1601.00
CFR Taiwan 1649-1651
CFR SE Asia 1619-1621 (1)
CFR China 1639-1641 1639.00-1641.00
(1) CFR SE Asia = CFR Indonesia. *A/F denotes anti-freeze grade.

Poly Grade Contract Price (OCT ): NA-NA Delivered

Chem Grade Contract Price (OCT ): NA-NA Delivered
Asia ($/mt)
Platts Global Ethylene Prices ($/mt)
Spot Friday Weekly Average
FOB Korea 814-816 828.0-830.0
CFR Taiwan 849-851 – 1400
CFR SE Asia 779-781 – CFR FE Asia FD NWE FAS Houston
FOB Japan 809-811 –
1200
CFR China 849-851 867.00-869.00
Asian ethylene spot assessments reflect LC 0-30 days. CFR SEA = CFR Indonesia/Thailand.
1000

Polymer Feedstocks – Ethylene Glycol Assessments 800

Europe
Spot Friday 600
FCA NWE T2 (Eur/mt) 623.00-627.00
FD NWE T2 (Eur/mt) 658.00-662.00
CIF NWE T2 (Eur/mt) 598.00-602.00 400
CIF NWE T2 ($/mt) 650.00-654.00 01-Jun 24-Jun 20-Jul 15-Aug 07-Sep 03-Oct 26-Oct

Monthly Contract Price (Oct ) – (Eur/mt) 750.00-750.00 Notes: All olefin prices reflect assessments at close of previous Friday.

© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 17
POLYMERSCAN october 26, 2016
Ethylene
Europe
Spot at 6% discount to October MCP
„„
PEI seen at Eur976.50/mt on strong naphtha
„„
The Northwest European spot price was assessed at a discount of 6% to
the October contract price on Friday. Prices rose Eur49.50/mt on the week
to Eur908/mt FD NWE. Indications had been heard at discounts of 6% to
10% against the October contract price, while one trade was reported at a
6% discount. S&P Global Platts assessed at a discount of 6% to the
October CP, in line with the trade, seen to be the most repeatable level.
Industry sources this week continued to report discounts to the MCP as a
result of length in ethylene and weakness in polyethylene demand, with
one consumer anticipating greater availability again in November, while
demand is anticipated to taper off further still towards the end of the year
in line with seasonality. The consumer added that the outage at Ineos’
Rafnes steam cracker in Norway following a fire at the compressor had not
had the impact expected by producers, although two sources earlier in the
week noted that the outage had helped limit the slide in C2 prices. In
supply, BASF crackers were reported to have restarted Thursday, and one
producer said the crackers would typically take one week to ramp up to full
production from cold. But a source close to the company said this was not
a standard situation as the crackers had an emergency shutdown following
the accident Monday, and it was unclear how soon they would be back up
to full capacity. The source added there had been no news of any damage
to the units. The delivery of ethylene to — and through — the BASF
Ludwigshafen site is curtailed, however, after the declaration of force
majeure. In contracts, a consumer expected prices would increase as a
result of feedstock gains, as naphtha continues its upward surge from early
August. Naphtha CIF NWE cargoes were assessed at $445/mt on Friday, up
$33 since the start of September and over $110 since August 1. The source
added that rising contract prices against the backdrop of C2 availability
were likely to result in higher spot discounts next month. The S&P Global
Platts November polypropylene indicator — a quantitative model based on
feedstock costs — was assessed at a Eur36.50 increase to the October
contract price on Friday at Eur976.50/mt.
Rationale
The Northwest European spot price was assessed at a discount of 6% to
the October contract price on Friday. Prices rose Eur49.50/mt on the week
to Eur908/mt FD NWE. Indications had been heard at discounts of 6% to
10% against the October contract price, while one trade was reported at a
6% discount. S&P Global Platts assessed at a discount of 6% to the
October CP, in line with the trade, seen to be the most repeatable level.
United States
Arb to Europe maybe open: sources
„„
October CP might decrease: Platts
„„
US spot prompt-month ethylene was assessed 0.25 cents lower Friday
at 29.5-30 cents/lb FD USG cents/lb FD USG. Forward-month ethylene
was assessed stable at 29.5-30 cents/lb FD USG. The week began with
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 18
prompt-month ethylene at 30.5 cents/lb FD USG, then rising to 31.125
cents/lb FD USG Tuesday, before falling to 29.75 cents/lb FD USG
Friday. In trading, October bid-offer ranges were heard at 29.5-31
cents/lb MtB Wms for 1 million lbs in the morning and at 29.625-30.5
cents/lb MtB Wms in the afternoon. Multiple October trades at 29.75
cents/lb MtB Wms were heard throughout the day. Market sources said
the weakness in pricing was most likely due to motivated sellers in the
market. In contracts, spot ethylene, feedstock ethane and propane
price movements indicate October ethylene contracts might see
pressure to decrease by 1-2 cents, S&P Global Platts data shows. Since
September 1, the spot ethylene assessment has fallen 5.398 cents/lb
while feedstock ethane assessment has risen 4.692 cents/gal and the
propane assessment increased 7.88 cents/gal, Platts data showed. In
international news, Germany’s BASF is to restart its two Ludwigshafen
steam crackers over the next few days but has declared force majeure
on the purchase of ethylene, naphtha and propylene after an explosion
at the site, the company said in a statement Thursday. US market
sentiment regarding US impact was mixed as some sources believe
the force majeure opens up an arbitrage opportunity to Europe; other
sources said that due to export logistic limitations and current US
production outages, it would be difficult for the US to seize the
opportunity. Northwest European ethylene has surged Eur49.5/mt
higher for the week and was assessed Friday at Eur908.00/mt (45
cents/lb) FD NWE basis. In feedstocks, non-LST Mont Belvieu purity
ethane was assessed 1.25 cents lower for the week at 24.25 cents/gal.
Rationale
US spot ethylene was assessed Friday at 29.5-30 cents/lb FD USG for
prompt-month deliveries, 0.25 cents lower for the week, based on
multiple October trades heard at 29.75 cents/lb MtB Wms. The forward-
month assessment was down stable at 29.5-30 cents/lb FD USG,
based on based on stable pricing indications at 29.75 cents/lb MtB
Wms from sources. October contracts were not heard settled by the
close of assessment. September contracts settled at a 2.75-cents
increase from August at 35.75 cents/lb.
Latin America
Argentina-origin cargo heads East
„„
Pemex ramps up cracker rates: source
„„
Mexico’s petrochemical producer Braskem Idesa has shut its cracker and
corresponding three polyethylene lines at its complex for maintenance until
the end of the month, a company spokeswoman said this week. “Braskem
Idesa is having a small shutdown for maintenance, for two weeks in the
second half of October,” spokeswoman Yeraseth Bello said, adding the
cracker would be down for a two-week period and the polyethylene lines
would be down for 10-12 days. No official start date to the maintenance was
provided, but a distributor source said he was informed that maintenance
began late Monday. A source with knowledge of company operations said
the maintenance was to coincide with maintenance at Mexico’s state-
owned Pemex plant. Pemex won the bid in 2010 to provide ethane
feedstock on a 20-year contract for the Braskem Idesa complex. Pemex is
expected to provide 66,000 b/d of ethane for the project, according to
Braskem Idesa data. The Braskem Idesa spokeswoman said the
POLYMERSCAN october 26, 2016
maintenance was in part due to the timing of Pemex undergoing a small
maintenance shutdown. Pemex was not available to comment. A source
close to Pemex said maintenance at both plants was expected to last until
October 31. The source said they anticipated the Pemex crackers may run
closer to 100%. Braskem Idesa said it hoped to make “minor adjustments,
corrections, improvements and cleaning some of the equipment during the
shutdown.” No major issues were expected and the shutdown was not
expected to affect customer supplies, according to company sources.
Pemex has two steam crackers, one at Morelos and one at Cangrejera, and
each has a similar capacity. Ethylene production at the crackers is
estimated at 500,000 mt/year each. A joint venture between Braskem
(75%) and Mexico’s Grupo Idesa (25%), the complex has a nameplate
capacity of 1 million mt/year ethylene and includes 1 million mt/year of
polyethylene. In trade activity, the Kithnos was seen exiting the port of
Bahia Blanca, Argentina and heading to the port of Singapore with an
estimated time of arrival of November 1, according to S&P Global Platts
cFlow ship-tracking software. Argentina’s Dow found a buyer for its
monomer in Asia, a source with knowledge of business operations said.
Asia
Spot avails seen increasing in NEA
„„
SEA falls after being stable for one month
„„
Asian ethylene fell $10/mt day on day Friday, pressured by rising
supplies for November business. Some spot demand was seen to be
available for November in China but buying indication did not move up
this week as spot supplies are seen to be increasing in Asia. Market
sources anticipate some spot exports from Taiwan amid an ethylene
pipeline maintenance work from November to January next year, while
steam cracker operations are returning to normal after the steam
cracker turnaround season. Ethylene supplies from the Middle East are
seen to come to Asia as the recent fire at BASF’s steam cracker in
Ludwigshafen did not tighten ethylene supplies in Europe. The two
steam crackers are due to be restarted soon after an emergency
shutdown earlier this week. According to a shipping report, an
ethylene cargo is due to be loaded from Al-Jubail to Asia for the first
half of November. In Southeast Asia, the spot price also traveled south
— after remaining at $1,040/mt CFR SEA level for almost one month —
as spot demand is diminishing amid constant flow of deepsea cargoes
from the Middle East. In addition, the region’s steam cracker
operations are seen to be normalizing, with Shell Singapore seen to be
restarting its 960,000 mt/year steam cracker soon. The cracker was
shut down September 27 due to a compressor problem. In related
statistics news, Japan’s steam cracker operating rates in September
averaged 95.2%, compared with 94% a year earlier and 95% in August,
the Japan Petrochemical Industry Association said Friday. Japan’s
ethylene production in September fell 7% from a month earlier to
470,300 mt, the JPCA said.
Rationale
The CFR Northeast Asia ethylene price fell $10/mt day on day to be
assessed at $1,060/mt Friday. For November, a buying idea was heard
at $1,050/mt CFR NEA, against a sell idea at $1,100/mt CFR NEA. A
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
tradable level was heard at $1,055-$1,060/mt CFR NEA. Meanwhile, the
CFR SEA ethylene price also dropped $10/mt to $1,030/mt during the
same period. A buying idea was heard below $1,000/mt CFR SEA, while
a sell idea was reported at $1,050/mt CFR SEA.
Ethylene Glycol
Europe
Upside capped by high inventory
„„
Logistics affected as KTL shut
„„
MEG: Availability concerns and uncertainty over the price direction for
feedstocks following the explosion and fires at BASF’s Ludwigshafen
site earlier this week pushed MEG prices higher Friday. The spot price
was assessed at Eur625/mt ($680/mt) FCA NWE, up Eur20/mt on the
week. Some sources said even higher levels — up to Eur640/mt —
were already achievable. “We see reaction, but not panic,” a source
said. Sources said the ethylene oxide and MEG plants in Ludwigshafen
were likely to be down as both BASF’s crackers were shut Monday. The
company declined to say if production at EO and MEG units was halted.
But it did say there was no force majeure on either despite the one
declared on olefins. EO is a feedstock for MEG production. BASF’s EO
capacity at the site is 375,000 mt/year and 22,000 mt/year of MEG. The
site accounts for around 10% of European EO capacity and only 1% of
MEG capacity. BASF said it was going to restart both crackers in the
next few days. Sources said the incident might underpin negotiations
of the ethylene contract prices for November. The concern of a
potential increase in feedstock has reportedly triggered extra buying of
MEG, several sources said. But the underlying consumption of MEG
remained stable and there was still little sign of a seasonal demand
from the de-icing segment. One trader said the market was still well-
supplied. But as prices in Asia rise — the CFR China marker was
assessed last at $656/mt — Middle Eastern suppliers could start
diverting volumes away from Europe in favor of Asia. The rise in an FD
price was slightly steeper due to tighter availability of trucks. The
transport hub Kombi-Terminal Ludwigshafen remained shut affecting
some truck deliveries. There is no clear timeline for its re-opening,
according to the spokeswoman. But sources hoped the situation could
normalize by mid-next week. DEG: DEG prices in Europe rose in tandem
with MEG pricing. The market appeared still well-supplied, with only a
marginal rise in demand. The spot price was assessed at Eur615/mt
FCA NWE, up Eur15/mt. One source noted an increased interest in
European-origin DEG from Turkish buyers, saying a rise in Asia could
have prompted this demand. But one trader said he was importing a
bit more material as well, which should cap any price rises.
Rationale
S&P Global Platts assessed MEG at Eur625/mt FCA NWE, up Eur20/mt.
Trades reported done earlier in the week at Eur605/mt and Eur610/mt
were deemed unrepeatable by the end of the week, as prices moved
higher. Platts assessed closer to the low end of the Eur620-640/mt range,
in a rising market. The FD price was assessed at Eur660/mt, up Eur25/mt,
19
POLYMERSCAN october 26, 2016
as truck freight rates edged higher on logistical problems. The CIF price
was assessed at Eur600/mt, up Eur25/mt, in line with the range of Eur590-
605/mt, pegged by sources. DEG prices rose Eur15/mt to Eur615/mt FCA
NWE, within the reported range of Eur590-640/mt and at a Eur10/mt
discount to MEG as heard pegged. The FD DEG price was assessed at
Eur645/mt, up Eur20/mt, based on a Eur35/mt inland freight rate.
United States
Market awaits anti-freeze season
„„
Feedstock sees slight decline
„„
US spot monoethylene glycol pricing reversed the previous week’s
decline, rising along with firmer global pricing. US MEG was assessed
Friday at 28.50-29.50 cents/lb ($628-$$650/mt) FOB USG, up 0.50 cent
week on week. The rising global pricing applied upward pressure with the
market awaiting stronger demand from winter-weather applications.
Producers have been waiting for the arrival of colder winter weather in
the US to boost anti-freeze demand. Demand from that sector has seen a
slow start amid the relatively warm weather at the start of the fourth
quarter. In production, Huntsman has been dealing with a steam issue at
its Port Neches, Texas, facility that may require a few more weeks of
work, sources said. Global MEG pricing gained week on week, with
production issues contributing to firm sentiment. Asian MEG rose on
stronger sentiment with firming downstream prices and issues at Shell’s
MEG plant in Singapore, pushing Chinese prices up $24 week on week to
a six-week high of $656/mt CFR China. European spot pricing climbed
Eur20 to Eur625/mt ($680/mt) FCA NWE after the recent fire at BASF’s
Ludwigshafen, Germany, facility. In feedstocks, US spot ethylene dipped
0.25 cent week on week to a Friday assessment at 29.75 cents/lb ($656/
mt) FD USG for front-month material. Downstream US polyethylene
terephthalate was assessed Wednesday at $1,069-$1,091/mt (48.50-
49.50 cents/lb) DDP US West Coast, an increase of $22/mt week on week.
MEG domestic contract prices were assessed at 32.4-32.9 cents/lb, up 1.4
cents from September’s price level.
Rationale
US spot monoethylene glycol was assessed Friday at 28.50-29.50
cents/lb ($628-$650/mt) FOB USG, up 0.50 cent week on week. The
assessment followed global pricing higher as feedstock pricing saw a
small downward movement. The October US MEG contract was
assessed at 32.40-32.90 cents/lb, up 1.4 cents from September’s price
level, based on a weighted formula that discounts the North American
benchmark price by 15% and the ACP average by 5%, with each
segment equally weighted, per market feedback.
Asia
CFR China up $24/mt on week, $40/mt since H2 Sep
„„
Market eyes production issues beyond Asia
„„
Asian spot monoethylene glycol prices hit six-week highs Friday, with
sources pointing to firm upstream markets and overall firm sentiment
as key drivers. The CFR China assessment rose steadily throughout the
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
week to close at $656/mt on Friday, up $24/mt week on week and $8/
mt day on day. CFR China MEG prices have surged $40/mt — or
roughly 6.5% — since September 23, S&P Global Platts data showed.
Domestic prices in China also gained, closing the week at Yuan 5,410/
mt ex-tank basis, up Yuan 160/mt for the period, and Yuan 50/mt on the
day. Domestic China prices have climbed Yuan 310/mt — or roughly 6%
— since September 28, also closing the week at six-week highs. A
flurry of activity during the last two days of the week accounted for the
bulk of gains, with Friday trading levels moving up from $645/mt CFR
China to $655/mt CFR China, with bids at the latter level by close of
assessment. Market sources cited short-covering and momentum
stemming from stronger crude and naphtha prices as key drivers in
the market. Production issues, such as run rates in the 50%-60%
range heard at Shell’s MEG plant at Pulau Bukom in Singapore,
stemming from a recent cracker shutdown, as well as talk of impacted
production in Germany and the US Gulf Coast region, were also
mentioned. Despite higher prices in Asia, the arbitrage from the US
Gulf remained closed on paper, one source said, adding that with FOB
prices in that region last heard in the $617-$639/mt range, prices
would need to rise above $700/mt CFR China for the window to open.
In feedstocks, Asian ethylene prices dipped $10/mt week on week to
be assessed at $1,060/mt for CFR Northeast Asia and $1,030/mt for
CFR Southeast Asia Friday, amid improving supply.
Rationale
Spot MEG was assessed Friday at $656/mt CFR China and $659/mt
CFR Southeast Asia. The CFR China assessment was based on bids at
$655/mt for November arrival heard by close of assessment, that
followed an offscreen trade at that level. The price was assessed
above the bid level. The domestic China price of Yuan 5,410/mt ex-tank
basis was based on trading indications at Yuan 5,400-5,420/mt and it
was assessed at the mid-point. The CFR Southeast Asia assessment
at $659/mt was based on the CFR China price plus a $3/mt premium to
account for the location spread.
Propylene
Europe
Producers, consumers expect MCP rise on naphtha
„„
CGP falls on Rhine levels, BASF force majeure
„„
October spot FD NWE polymer grade propylene prices were assessed
at a 4% discount to the October contract price Friday, down 2% on the
week. Industry sources continued to report higher propylene
availability in spite of ongoing maintenance and the force majeure at
BASF’s Ludwigshafen site in Germany. One consumer said it had they
had not seen a large impact from the force majeure so far, but
reported having received offers from upstream refineries looking to
secure placements for their rail cars. Availability was seen by a trader
to be strongest in chemical grade propylene, noting “it has taken a
massive stumble in the last two weeks”. Another trader said “CGP is
clearly quite well supplied in Germany”, and “bigger discounts don’t
20
POLYMERSCAN october 26, 2016
surprise me at all.” A third trader attributed the dip in prices to lower
Rhine water levels and the force majeure at BASF, but expected CGP
prices to return to “a more normal level” following the restart of BASF’s
derivative plants. The Rhine levels at Kaub — a critical point on the
river — were measured at 96 cm by the German waterway authority on
Friday, 4 cm below the 1 m level which is seen as critical for loading
cargoes. Low water levels have curtailed movement in Central Europe
for a number of petrochemicals in recent weeks, including propylene,
methanol and butadiene. The traders’ comments aligned with a
consumer’s report on Monday of a trade at double digit discounts to
the October monthly contract price last week. In supply, BASF crackers
were reported to have restarted Thursday, and one producer said they
would typically take one week to ramp up to full production from cold.
But a source close to the company said this was not a standard
situation as the crackers had an emergency shutdown following the
accident Monday, and it was unclear how soon they would be back up
to full capacity. The source added that was no known damage to the
units. In contracts, sources this week expected an increase based on
higher feedstocks, as naphtha continues its upward surge from early
August. Naphtha CIF NWE cargoes were assessed at $445/mt on
Friday, up $33 since the start of September and over $110 since August
1. A producer expected a hike of Eur40-50/mt in November, while a
consumer saw a minimum Eur30 increase, noting that the last three
settlements had occurred against a backdrop of C3 tightness, which
was no longer the case. The S&P Global Platts November
polypropylene indicator — a quantitative model based on feedstock
costs — was assessed at a Eur30 increase on Friday at Eur755/mt.
Rationale
Polymer grade propylene spot prices were assessed at Eur716.50/mt
FD NWE Friday for delivery 3-30 days forward, down Eur5/mt on the
week. Indications were heard between a small premium to the October
MCP FD NWE and a 5-6% discount, with no trades reported. S&P Global
Platts priced PGP at a 4% discount to the October CP, which was seen
to be the most repeatable level following higher C3 availability in
October. Platts assessed chemical-grade propylene at Eur672/mt FD
NWE for delivery 3-30 days forward, down Eur12.50/mt on the week.
The CGP discount to the October MCP was assessed at 10%, down 1%
on the week, as industry sources continued to report length in the
market. One peg was heard around October MCP minus 16%, with no
additional indications or trades were heard. A discount of Eur30 was
applied to inland prices for CGP delivered at the coast.
United States
BASF FM in Germany, arb not open yet: sources
„„
Inventory at 3-month high: EIA
„„
US spot polymer-grade propylene pricing fell 0.5 cent on the week,
assessed Friday at 38.25-38.75 cents/lb FD USG for October and
November deliveries. Spot refinery-grade propylene fell 2.25 cents for
the week, assessed Friday at 27.25-27.75 cents/lb FD USG. The week
started off with prompt-month PGP at 39.5 cents/lb FD USG then rising
to 40 cents/lb FD USG Tuesday before falling to 38.5 cents/lb FD USG
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
on Friday. Sources attributed the recent spot price fall — the prompt-
month PGP price fell 4.5 cents/lb or 10% since September 20,
according to S&P Global Platts data — to falling spot ethylene prices,
which factor into propylene production costs through metathesis
processes. Additionally, sources said players are destocking as the end
of the year approaches and inventory taxes in Texas come into play.
Meantime, propylene for nonfuel use inventories rose 240,000 barrels
to 3.015 million barrels in the week ended October 14, US Energy
Information Administration data showed. Inventories were last higher
the week of July 15 when they were at 3.163 million barrels, per EIA
data. Refinery run rates dropped 0.5 percentage point to 85% in the
week ended October 14, EIA data showed. In international news, BASF
declared force majeure on purchases of ethylene, propylene and
naphtha for its production facility at Ludwigshafen, Germany, a
spokeswoman said Wednesday. She declined further comment.
Northwest European PGP fell Eur5/mt for the week, assessed Friday at
Eur716.5/mt FD NWE basis (35.3 cents/lb). US market sources did not
believe the force majeure opens up an arbitrage opportunity to Europe
at this point, with one source stating that US propylene pricing would
have to drop 12 cents/lb for the arbitrage window to open. In contracts,
initial nominations for US October propylene contract prices called for
a 0.5 cent/lb decrease to 42.5 cents/lb for polymer-grade product,
sources said. The nomination is within market expectations, which
recently called for rollover to 0.50 cent/lb decrease, sources said.
Propylene buyers were heard pushing for a 1-cent decrease. In
feedstocks, prompt-month non-LST Mt Belvieu propane closed the
week assessed at 59.25 cents/gal, rising 1.25 cents/gal for the week.
Rationale
US polymer-grade propylene was down 0.5 cent for the week,
assessed Friday at 38.25-38.75 cents/lb FD USG for prompt- and
forward-month deliveries, based on a November offer at 39 cents/lb
MtB-pipe, subtracting 0.50 cent for negotiations. A flat structure was
maintained between prompt- and forward-month assessments.
Refinery-grade propylene was down 2.25 cents for the week at 27.25-
27.75 cents/lb FD USG, based on a trade heard at 27.5 cents/lb MtB-
pipe. October contracts were not heard settled by time of publication.
September contract prices for chemical-grade propylene and PGP
settled at a 6 cents/lb increase at 41.5 cents/lb and 43 cents/lb,
respectively, with multiple participants confirming.
Latin America
Asia-origin cargo lands in Mexico
„„
Key US CP could settle lower
„„
Market talk of continued trade activity in Latin America this week focused
on a potential ex-Brazil cargo from Petrobras, sources said. A source with
Mexico’s polypropylene producer Indelpro said it was well stocked with
monomer and did not anticipate needing feedstock in the short term.
Meanwhile, a source with PP producer Esenttia in Colombia said they
were aware of the tender but did not confirm they were stepping into the
spot market to buy the monomer. Esenttia last received a 3,000-4,000
mt cargo from the port of Antwerp, Belgium, to Cartagena, Colombia,
21
POLYMERSCAN october 26, 2016
according to S&P Global Platts cFlow ship-tracking software. A source
with Esenttia confirmed the trade for the European cargo but was not
able to include additional details including terms and pricing. The source
also indicated they also had a good supply of monomer. Meanwhile, the
Astipalea landed in the Mexican port of Altamira from the port of
Singapore, according to Platts cFlow. A source with Mexico’s Indelpro was
not available to confirm the trade for 5,000 mt of monomer but a source
with knowledge of the trade confirmed it was bought by the producer. In
key contracts, there was continued talk of October US propylene down
0.5 to 1 cent/lb after September contract prices increased by 6 cents/lb to
43 cents/lb for polymer-grade product, market sources said. That
settlement was the fourth consecutive monthly increase. Market spot
buyers in Latin America had been closely following contract negotiations.
Asia
Market under pressure amid rising supplies
„„
Market seen supported by bullish PP
„„
Asian propylene came down $40/mt week on week Friday, after having
risen $40-$45/mt week on week to a 15-month high in the previous
week. The Asian propylene market remained stable earlier this week,
well-supported by a firmer downstream polypropylene market. But the
Asian propylene market was under pressure in the middle of this week,
amid rising supplies. Japan’s Idemitsu Kosan plans to restart its
naphtha-fed steam cracker in Tokuyama at the end of this week, after
completing annual maintenance, a company official said Wednesday.
The cracker is able to produce 300,000 mt/year of propylene. The
cracker was shut down September 10. In addition, the impact of a
shutdown of BASF’s steam crackers in Ludwigshafen is seen to be
minimum as the units are due to be restarted soon. The crackers were
shut down following a fire earlier this week. Market sources said
Taiwan’s CPC awarded its sell tender (two vessels) for prompt end-
October loading this week. In the domestic market in China, the local
propylene prices in Shandong were heard to have dropped around
Yuan 100/mt from last week to Yuan 7,000-7,050/mt Friday. Market
sources said at the same time that the Asian propylene market would
find a support amid the firmer downstream PP market. On Friday, the
CFR China raffia-grade PP marker was assessed at $1,000/mt, up $40/
mt from the previous week. In turnaround news, Taiwan’s Formosa
plans to shut its 250,000 mt/year olefins conversion unit in Mailiao
from March to April next year for annual maintenance, a company
source said Friday. Currently, the OCU is running at 100% capacity. The
company also plans to shut its 350,000 mt/year No. 2 residue fluid
catalytic cracker in Mailiao for March to April next year for annual
maintenance, the source said. In statistics news, South Korea’s
propylene exports in September fell 5.2% from a month earlier to
154,121 mt, according to customs data Monday. Compared with a year
earlier, South Korea’s propylene imports marked a 30.2% increase.
Rationale
The CFR China propylene price marker sank $40/mt week on week to
be assessed at $850/mt Friday. Some deals were reported to have
been done this week in a range of $835-$855/mt CFR China, with the
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
majority of deals heard to have been transacted at $850-$855/mt CFR
China this week. Meanwhile, the FOB Korea propylene marker also
dived $40/mt from the previous week, to be assessed at $815/mt
Friday, with the market level heard to be in the $810-$820/mt FOB
Korea range. In other areas, the CFR Taiwan propylene marker also
dropped $40/mt to $850/mt during the same period, with a buying idea
heard at $820-$830/mt CFR Taiwan.
Butadiene
Europe
Cargoes exported to the US
„„
Entire C4s chain tight
„„
Butadiene on a FOB Rotterdam basis was assessed at $1,1150/mt
Friday, up $25 week-on-week. In the European domestic market, the
product was assessed at Eur985/mt ($1,070/mt) FD NWE, flat on the
week. Traders reported a deal at Eur985/mt FD NWE, but this could not
be confirmed by the parties involved in the sale of the cargo. Europe
origin cargoes were heard being offered into Asia at high prices.
“These offers are at prices higher than $1,640/mt CFR China,” a
European trader of downstream SBR said. Traders were seen unable to
arrange cargoes for shipments to Asia, but contractual volumes were
seen headed to the US. A 5,000 mt cargo with laycan October 8-10 was
heard headed out of Saudi Arabia to the US. Another butadiene cargo
with laycan October 10-12 was seen headed out of Europe to the US.
The prices at which these cargoes exchanged hands could not be
confirmed. Contract negotiations for November settlement of
butadiene in Europe were heard to have begun Friday, but had not
concluded by the end of day. In Asia, the price was assessed at $1,640/
mt CFR China Friday which was flat from last week but still a very high
number considering the 2016 average for butadiene prices in Asia. This
lent strong support to prices in Europe. A producer placed the
company’s sell idea at $1,200/mt FOB Rotterdam or higher. A trader
was last heard looking for a cargo at $1,100/mt FOB Rotterdam but
supplies were heard to be so tight in Europe that no offer was heard to
have been made to the trader. Prevailing high prices in Europe and Asia
came primarily as a result of a force majeure declared by Shell
Chemicals’ cracker in Pulau Bukom, Singapore, following a technical
problem in its compressor three weeks earlier. The shutdown was
expected to last for a maximum of three weeks, but the market is
eagerly awaiting a fresh statement from Shell. An arbitrage window
between Europe and Asia was seen to be wide open, but no cargo was
heard to have been exported out of Europe. CC4, which acts as a
feedstock for butadiene, was assessed at a 1.25 factor to naphtha on
CIF NWE basis. The price of butadiene and that of all C4s in Europe
have been bullish for most of 2016 because of more cracker
maintenance in Asia and Europe. Ineos’ cracker at Rafnes suffered an
outage following a fire at the compressor last week and remained shut.
Czech Unipetrol expects to restart its Litvinov cracker to reach
standard operating rates by end-October. The cracker was shut
following a fire almost a year earlier. PKN Orlen’s cracker at Plock in
22
POLYMERSCAN october 26, 2016
Poland was was expected to restart fully by end-October. Italy’s
Versalis has shut its Dunkirk cracker end-August for maintenance and
is expected to restart early November. LyondellBasell, which operates
two crackers at its Wesseling site in Germany with capacities of
305,000 and 735,000 mt/year respectively, was heard to have shut one
in early September and will restart in November.
Rationale
Butadiene was assessed at $1,150/mt FOB Rotterdam, up $25 on the
week, and within the $1,100-1,200/mt FOB Rotterdam buy and sell
ideas spread heard in the market. The FD NWE price was assessed at
Eur985/mt FD NWE, up a marginal Eur1 on the week, and at the level of
a deal heard inked in the market.
United States
Tight supply, high demand support spot: sources
„„
Arb to Asia remains open: sources
„„
The US spot butadiene assessment rose 1.5 cents on the week to 53
cents/lb ($1,168/mt) CIF USG as pricing indications were heard between
51-54 cents/lb. This is the highest price level since September 19, 2014
when it was assessed at 55 cents/lb CIF USG ($1,213/mt), according to
S&P Global Platts data. During the week, November bids were heard at
53-54 cents/lb CIF USG. US spot supply continued to be talked tight as
the market was still recovering from unplanned outages earlier in the
third quarter, sources said. Since Shell Chemicals’ butadiene extraction
unit in Singapore was shutdown two weeks ago, supply has tightened in
Asia and prices have surged upward, opening an arbitrage opportunity for
product from the US and Europe to be sold overseas, sources said.
Sources added the plant is expected to be down for 3-6 weeks from the
initial shutdown date. The price range of 50-52 cents/lb was heard as a
viable level for exports to Asia from the US with freight rates being heard
between $200-$300/mt. A source said there could be more shipments to
Asia from the US, however tight US supply would likely limit a lot of
product being exported. The FOB Korea price was assessed at $1,600/mt
Friday, unchanged week on week. The CFR China pricing was also stable
week on week, assessed at $1,640/mt Friday. The CFR Taiwan pricing
remained at $1,650/mt. Since September 23, Asia butadiene pricing -
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including CFR Taiwan, FOB Korea, CFR SE Asia and CFR China - has
surged approximately 35-42%, per Platts data. One source said he
expects to see elevated pricing across Asia for several more weeks, with
other sources saying the market would remain extremely tight on supply
until at least December. October US butadiene contracts settled up 2-7
cents/lb at a 46 cents/lb ($1,014/mt) settlement. Market participants have
talked the possibility of another contract price increase for November of
2-3 cents/lb, but no announcements have been made yet.
Rationale
US spot butadiene was assessed at 53 cents/lb CIF USG Friday, up
1.5 cents/lb on the week, as price indications were heard between
51-54 cents/lb and amid tight supply. The October US butadiene
contract price was settled at 46 cents/lb, sources said. Seller
confirmation was unavailable.
Latin America
Spot cargos remain limited
„„
Key US CP could head higher
„„
Europe-origin cargos continued to find a home in Mexico following a
slow start to begin the fourth quarter, sources said. The Tenna Kosan
landed in the port of Altamira this week from the Sines port of
Portugal, according to S&P Global Platts cFlow ship-tracking software.
Availability for October had been expected to be limited from Asia and
Europe amid talk of tightness in those regions relating to maintenance
issues, sources said. A buyer with Mexico’s INSA was not available to
confirm the trade. In exports, the Atlantic Gas was seen heading to
Brazil with an ETA of October 25 to pick up a cargo, according to Platts
cFlow. A source with olefins producer Braskem of Brazil was not
available to confirm the trade. Asian butadiene was stable Friday and
was assessed by Platts flat on the week at $1,640/mt CFR China and
$1,600/mt FOB Korea. Cargos were heard sold out until November by
market participants. In the US, there is continued talk of the November
US butadiene contract price increasing 2-3 cents. The talk is early but
has remained firm and comes amid an October settlement at 46 cents/
lb ($1,014/mt). Market participants keep a close eye on key market
contract settlements, including those in the US, per market feedback.
23
POLYMERSCAN october 26, 2016
Asia
Spot availability remains tight
„„
Buyers start to resist high prices
„„
Activity in the Asian butadiene market slowed down this week amid a
wide gap between buyer and seller price expectations. The FOB Korea
marker was assessed at $1,600/mt and the CFR China marker at
$1,640/mt, both unchanged from the week before. Sources said most
cargoes were sold out until end November and signs of resistance
from buyers were starting to emerge amid the prevailing high prices.
“Downstream is heavily impacted by these high prices, so end-users
are showing some resistance,” said a trader based in Singapore.
Butadiene prices had shot up to a multi-year high last week due to
spot supply tightness. There was still tightness seen this week for spot
cargoes, with most North Asian producers heard sold out for cargoes
loading in November and discussions starting to surface for
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
December-loading cargoes. “Supply is still tight but there seems to be
mixed sentiment” for December, said a North Asian producer source.
Indonesia’s Chandra Asri Petrochemical was heard to have issued a
tender offering 2,000 mt of butadiene for loading over November
26-30 from Anyer on an FOB fixed price basis, which market sources
said was later withdrawn due to low bids. Chandra did not respond to
queries. Some sources said a ceiling may have been reached and
prices may gradually decrease going forward.
Rationale
Butadiene was assessed unchanged week on week at $1,600/mt FOB
Korea and $1,640/mt CFR China Friday. Bid levels for cargoes loading end
November were heard close to $1,600/mt on a CFR China basis. Notional
tradable levels for spot cargoes were also discussed at close to $1,600/mt
on an FOB Korea basis. Domestic China prices decreased week on week to
be assessed at Yuan 14,000/mt or $1,736/mt on an import parity basis, with
delivered prices heard around Yuan 14,000/mt.
24
POLYMERSCAN october 26, 2016
Polymer Feedstocks: Aromatics
Paraxylene
Europe
Solvent MX Nov premium up $16 on week to $81/mt
„„
Isomer MX premium down $21.5 on week to $123.50/mt
„„
Solvent MX prices in Europe edged up on Friday by $11 to $575/mt,
tracking strengthening moves in the underlying gasoline complex.
Prices of solvent MX also increased by $6 on the week, finding
support from an uptick in buying interest for gasoline blending.
Supply of MX remained thin as extraction economics remained
weak, which did not encourage production of incremental
volumes. This helped the November solvent MX premium to
strengthen $6 on the day to $81/mt, tracking increases in toluene.
It was also up $16/mt on the week, despite buying interest from
chemical buyers being sidelined, with no demand surfacing from
that sector in the past few weeks. Demand for isomer MX was also
subdued, as extraction margins for PX remained slim, whereas
supplies of PX also remained ample across all regions. This
weighed on MX premiums which fell $21.50 from last Friday to
$123.50/mt, although stable on the day. Isomer MX prices also
decreased $24.50 from last week to $624.50/mt, but were up $7
on the day. Supplies of isomer MX however remained tight, which
kept them at a strong premium of $49.50/mt over solvent MX,
assessed within the range heard of $35-50/mt. Spot trading of PX
was sidelined as arb opportunities remained difficult to work from
Europe to Asia or the US. PX prices rose $8.50 on the week to
$706/mt Friday on strengthening in the energy complex.
Meanwhile, OX spot trading remained largely mute as supplies had
remained thin in past months. Although BASF had declared force
majeure on multiple products after the explosion at its
Ludwigshafen plant in Germany, it was unclear whether more OX
volumes could head to the spot market, as downstream phthalic
anhydride producers in Europe mostly procured OX on a
contractual basis.
Rationale
Solvent MX increased $11/mt to $575/mt FOB ARA. Solvent MX
premiums over Oct and Nov EBOB swaps were assessed at $65/mt,
unchanged and up $6/mt at $81/mt, respectively and both on par
with toluene as heard during the week. Gasoline swaps for October
and November were valued at $504.50/mt and $498/mt,
respectively. Virgin/Isomer grade MX was assessed up $7/mt at
$624.50/mt FOB ARA loading 5-30 days forward as its premium
over Oct and Nov EBOB swaps was assessed unchanged at $123.50/
mt. PX was assessed stable at $706/mt FOB ARA and at a netback
to Asia of $101.50/mt, in line with indications heard over the
previous trading sessions. OX spot prices also held stable at $726/
mt FOB ARA, assessed at an unchanged premium of $20/mt over
PX, in line with indications heard during the week. The PTA October
contract price decreased Eur5/mt to Eur620/mt, assessed in line
with an indication heard during the week.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Polymer Feedstocks – Aromatics
Weekly Average Spot*
Styrene FOB Korea ($/mt) 999.40-1000.40
Styrene FOB ARA ($/mt) 995.20-996.20
Styrene FOB USG (cts/lb) 44.34-44.84
Paraxylene FOB Korea ($/mt) 782.80-784.80
Paraxylene FOB Rdam ($/mt) 703.70-705.70
Paraxylene FOB USG ($/mt) 739.00-749.00
Monthly Contract Price
Styrene Barge FOB ARA CP (Eur/mt) (Oct) 985.00
Styrene Truck FCA Rdam CP (Eur/mt) (Oct) 985.00
Styrene FOB USG (cts/lb) (Oct) 51.50-52.50
Paraxylene CFR Asia Average (Oct ) 780
Paraxylene FD NWE (Eur/mt) (Oct) NA
Paraxylene FOB USG (¢/lb) (Oct) 40.00-40.00(Q4)#
* Average prices for week ending previous Friday. # US PX CP are typically settled retroactively, prices refer to
most recent settlement. To convert Cts/lb to $/mt, multiply by 22.046.
Asia Styrenics Prices
(¢/lb)
1300
CFR FE Asia GPPS
Styrene FOB Korea
1200
1100
1000
900
08-Jun 05-Jul 03-Aug 31-Aug 28-Sep 26-Oct
Notes: All aromatics prices reflect assessments at close of previous Friday.
United States
Consistent fundamentals limit price movement
„„
Production economics remain unfavorable
„„
US spot paraxylene rose $5 week on week, assessed Friday at $740/mt
FOB USG. Asia remained the primary driver of US pricing amid stagnant
fundamentals of quiet demand and ample supply, sources said. US
paraxylene contract prices for October settled at 40 cents/lb ($882/
mt), a 0.50 cent increase from September’s mark, sources said Friday.
Contract prices are typically settled retroactively. The settlement was
in line with market expectations for a flat to slightly higher settlement.
Excess supply kept Asia an attractive option for US exports, sources
added. Asian PX prices moved $4.67/mt higher week over week,
assessed Friday at $783.67/mt FOB Korea and $804.67/mt CFR Taiwan/
China. This higher contract settlement for October came as
downstream purified terephthalic acid and polyethylene terephthalate
25
POLYMERSCAN october 26, 2016
demand has remained strong, sources said. However, the bottling
season was over and PET demand was starting to taper off, sources
said. Upstream, tight supply in the US spot mixed xylene market kept
pricing firm at 14-month highs. Spot MX was assessed as high as
$2.38/gal FOB USG this week and trading levels were heard as high as
$2.62/gal. In production economics, the MX-PX spread ended the week
around $25/mt, a fall of $7 according to S&P Global Platts data. Market
participants typically consider a healthy spread to be around $150/mt,
but the price spread can be lower depending on the level of integration
for a producer, per market feedback.
Rationale
Friday’s three-to-30-day paraxylene assessment at $740/mt FOB USG,
up $5 week on week, was based on the netback to Asia, assuming
freight costs at $60-$65/mt. October contracts were settled at 40
cents/lb, sources said. Contracts typically settle retroactively.
Asia
Jan PTA futures fall Yuan 22/mt
„„
JX shuts Kashima plant Oct 20
„„
With a weaker downstream futures market outweighing the effect of a
sudden plant shutdown, Asian paraxylene was assessed lower by $4.33/
mt day on day at $783.67/mt FOB Korea and $804.67/mt CFR Taiwan/
China Friday. January purified terephthalic acid futures closed at Yuan
4,862/mt, down Yuan 22/mt from the previous close on the Zhengzhou
Commodities Exchange. Selling sentiment was heightened during the
day, continuing into the Platts Market on Close assessment process,
with numerous offers for H2 November and December cargoes, against
firm bids for December cargoes. In market news, Japanese PX producer
JX Nippon Oil & Energy is currently assessing the impact of an upstream
fire that forced the shutdown of its 500,000 mt/year PX plant at
Kashima, and expects to determine the impact on supply by Tuesday or
Wednesday, a company source said Friday. The PX plant was shut on
October 20 after a fire broke out at the 21,200 b/d No. 3 reformer at the
252,500 b/d Kashima refinery on Thursday, just as an earthquake hit the
area. This led the refiner to shut both the No. 3 reformer and the 63,500
b/d No. 1 condensate splitter. Although the fire broke out five to six
minutes after the earthquake, it has not yet been confirmed that the
earthquake led to the fire, a company official said separately Friday. The
other units at the refinery are operating normally. Week on week, the PX
CFR Taiwan/China marker was $4.67/mt higher.
Rationale
Asian PX was assessed $4.33/mt lower day on day at $783.67/mt FOB
Korea and $804.67/mt CFR Taiwan/China Friday. The markers take the
average of the third, fourth and fifth half-month forward laycans,
currently H2 November, and H1 and H2 December. Offscreen during the
Platts MOC assessment process, an order-cancel-order offer for H2
November was seen. One offer in the OCO was $800/mt CFR Dalian, for
Asia-origin cargo, the other was at $800/mt, CFR Taiwan/Ningbo/Dalian/
Jiangyin/Xiamen/Gulei/Hainan/Zhuhai/Zhapu/Lianyungang basis on a
maximum 25,000-dwt vessel. H2 November laycan was assessed below
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
the offer at $799/mt CFR Taiwan/China. There was no firm buying
interest heard. The H1 December laycan was assessed at $807.50/mt
CFR Taiwan/China, between the highest bid at $807/mt CFR Taiwan/
Ningbo/Dalian against the lowest offer at $808/mt on the same basis.
The above rationale applies to the following market data codes:
“PHASS05” for FOB Korea and “AAQNE00” for CFR Taiwan/China.
Styrene
Europe
Offers retreat
„„
Downstream contract prices stable on the week
„„
In a dramatic reversal in fortunes, the styrene spot price fell sharply
Friday to be assessed at $965.50/mt FOB ARA, declining $39.50/mt on
the day. The styrene spot price reached a 15-week high of $1,019.50/mt
on Wednesday following the explosion at BASF’s Ludwigshafen
petrochemical complex on Monday. The 550,000 mt/year styrene
monomer unit at the location was shut on Wednesday which led to a
surge in bids and offers mid-week. But offers retreated Friday as the
market stabilized. “The party is over,” a source said Friday, adding that
BASF’s announcement that it will restart both its crackers in the
coming few days contributed to the fall in prices. A second source said
the styrene market was “overreacting” to the developments at
Ludwigshafen and that the price had to “eventually come down”.
Ludwigshafen’s styrene supplies are mainly for internal consumption,
so it should not have a large impact on general availability of styrene in
Europe, sources said. In addition, the shut down of the 190,000 mt/
year polystyrene unit at Ludwigshafen meant there would be “no extra
demand” for feedstock styrene. Downstream, the polystyrene net
contract prices were assessed stable on the week, down Eur40/mt on
the month. The GPPS net CP was assessed at Eur1,250/mt FD NWE
Wednesday. The acrylonitrile butadiene styrene net contract price was
assessed at Eur1,470/mt FD NWE Wednesday stable on both the week
and on the month with strong demand.
Rationale
Platts assessed styrene for delivery 5-30 days forward at $970.50/mt
FOB ARA Friday, down $39.50/mt. October was assessed at $965/mt,
above a bid heard at $960/mt and below the lowest offer heard at
$970/mt. The $10/mt contango between October and November was
carried over. November was assessed at $975/mt, down $40/mt, and
within a bid-offer range heard at $960-$990/mt.
United States
Sentiment bullish amid Asia demand expectations
„„
No major impact expected from production outages
„„
October US spot styrene rose 0.65 cent week on week, assessed
Friday at 44.90 cents/lb ($990/mt) FOB USG amid tight supply,
sources said. The November US spot styrene assessment was also
26
POLYMERSCAN october 26, 2016
at 44.90 cents/lb ($990/mt) FOB USG Friday. An October deal was
heard at that level on Wednesday and there was talk of a trade at
$1,000/mt FOB USG that day as well. Market participants pegged the
market at $980-$1,000/mt Friday. A combination of factors
contributed to bullish sentiment. Last Thursday, there was a fire at
Westlake Chemical’s Sulphur, Louisiana, chemical complex. Sources
said Westlake’s ethylbenzene unit that was down would be back up
in two weeks. Additionally, BASF had a fire at its Ludwigshafen site
in Germany, sources said Monday, a major petrochemical production
complex. That impact won’t be as major as some participants
initially thought as production wouldn’t be offline for a long period of
time, sources said. A third contributing factor to bullish sentiment
was expectations for Asia buying. Sources said, Asia styrene
reserves were low and exports to that region would increase as a
result. In feedstocks, benzene prompt-month spot prices were 9
cents/gal higher on the week, assessed Friday at 230 cents/gal FOB
USG. The styrene-benzene spread was at $302/mt, according to S&P
Global Platts data Friday. US benzene contracts for October were
settled at 231 cents/gal, down 14-20 cents/gal from September,
sources said. Variable costs for styrene were in a range of 35.70-
37.50 cents/lb, per Platts data Friday. There was no major change in
derivative fundamentals this week with both the acrylonitrile-
butadiene-styrene and polystyrene markets continuing to see quiet
demand amid limited supply, sources in those markets said. In
styrene, the arbitrage to China was closed on paper as the H2
November CFR China assessment was at $1,041/mt, meaning with
freight estimated around $65/mt, US pricing would need to be
around 43.82 cents/lb FOB to work the arbitrage, according to Platts
data. European styrene spot pricing was up on the week, with
October and November at $965/mt FOB ARA and $975/mt FOB ARA,
respectively. With freight estimated around $55/mt, US styrene
would need to be around 41.73 cents/lb for November, based on
Platts data. Domestic styrene pricing was talked in the low-50s
cents/lb FOB USG ex-tank basis.
Rationale
October and November styrene were both assessed at 44.90 cents/lb
FOB USG based on indications in the $980-$1,000/mt (44.45-45.35
cents/lb) range. The US domestic transaction price was assessed at
51.5-52.5 cents/lb FOB USG ex-tank, down 1 cent on the week, based
on price indications in the low-50s cents/lb level and due to the lower
benzene contract price for October.
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Asia
E China inventory falls 11% on week
„„
YNCC to shut SM plant at Yeosu in May 2017
„„
Asian styrene monomer was assessed $5/mt higher on day at $1,014/
mt FOB Korea and $1,036/mt CFR China Friday. Demand was strong
during the week with Chinese domestic prices also firmer. Domestic
prices in East China were heard at about Yuan 8,440/mt, or about
$1,047/mt on an import parity basis. Feedstock benzene was assessed
at $640/mt FOB Korea Friday, up $1/mt day on day amid steady
demand for November and December cargoes. Meanwhile, SM
inventory level in East China was heard at around 60,900 mt, down by
nearly 11% week on week. In plant news, South Korea’s Yeochun
Naphtha Cracking Center plans to shut its 285,000 mt/year SM plant at
Yeosu for about 30 days of maintenance from May next year, a source
close to the company said Thursday. The plant was last shut for
scheduled maintenance in mid-May 2015. LG Chem plans to shut its
200,000 mt/year No. 1 and 300,000 mt/year No. 2 SM plants at Yeosu in
March-April 2017 for a 20-day scheduled maintenance, a source close
to the company said this week. The production loss due to the
turnaround is estimated at 28,000 mt, according to S&P Global Platts
calculations. The company also plans to shut its 180,000 mt/year SM
plant at Daesan in October next year for maintenance. Hanwha Total
Petrochemical plans to shut its 400,000 mt/year No. 1 SM plant at
Daesan in late April to early May next year for a turnaround, a source
close to the company said Tuesday. The scheduled maintenance is
expected to be carried out for about 20 days, the source also said.
There was no maintenance for the plant this year, following a
turnaround and capacity expansion over April-May 2015, Platts
previously reported. The 650,000 mt/year No. 2 SM plant at the same
location had a turnaround in September this year.
Rationale
The CFR China SM Marker was assessed at $1,036/mt Friday, up $5/mt
day on day. The FOB Korea was also assessed higher by $5/mt from
the previous day at $1,014/mt. CFR China and FOB Korea SM markers
take the average of the H2 November and H1 December laycans.
Before the Platts Market on Close assessment process began, there
was a bid for December at $1,030/mt CFR China in the afternoon. The
location spread between CFR China and FOB Korea was kept
unchanged Friday.
27
POLYMERSCAN october 26, 2016
Polymer Feedstocks: Intermediates
Purified Terephthalic Acid
Europe
The October contract price of PTA in Europe edged lower by Eur5 to
Eur625/mt during the week, following the split settlement of the PX
October ECP at rollover to minus Eur10 from September. Sources said PTA
contract prices had been trading at around Eur130/mt premium over
feedstock PX contract prices throughout the year. But with the ongoing
anti-dumping investigations by the European Commission on imports from
South Korea, European PTA producers now had a bullish feel for 2017, for
which they were pushing for premiums above Eur150/mt. This came as
reluctance grew among buyers for fixing import contracts from Korea amid
uncertainty on the outcome of the anti-dumping investigations. Meanwhile,
in the downstream PET segment, sentiment remained strong on poor
import economics and a depreciation in the euro exchange rate. But buyers
remained wary of fixing 2017 requirements, holding off pre-buying as they
awaited some clarity on exchange rates and feedstock fundamentals.
United States
Climbs to 41.49 cents/lb
„„
Follows higher Oct PX CP
„„
The formula-based October US purified terephthalic acid price settled at
an increase of 0.50 cent to 41.94 cent/lb ($915/mt), market sources said
Friday. The increase followed the settlement of the feedstock US October
paraxylene contract at 40 cents/lb, sources said Friday. The formula-
derived PTA price uses the US PX contract price as the key variable,
according to sources. US PX contracts typically settle retroactively, with
the PTA price being finalized after that settlement. The US PX and PTA
prices fell within market expectations that mostly called for flat to slightly
higher pricing. US spot PX increased $5 week on week to $740/mt FOB
USG, tracking the movement in the Asian market. Asian PX rose $4.67
week on week to $804.67/mt CFR Taiwan/China and $783.67/mt FOB
Korea after a fire impacted a producer in Japan. PTA is the primary
feedstock for polyethylene terephthalate. Downstream US PET was
assessed Wednesday at $1,069-$1,091/mt (48.50-49.50 cents/lb) DDP US
West Coast, an increase of $22/mt week on week.
Rationale
The October US PTA price was set at 41.94 cents/lb ($915/mt), up 0.50
cent from September, according to multiple market sources. The
settlement followed the settlement of the feedstock US October
paraxylene contract at 40 cents/lb.
Asia
Chinese domestic trading active
„„
Volatility observed in futures market
„„
Asian purified terephthalic acid was assessed lower by $4/mt week on
week at $607/mt CFR China Friday, tracking movement in the futures
market. Earlier in the week, PTA futures had moved up on the
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Polymer Feedstocks – Intermediates
Weekly Spot
PTA CFR China ($/mt)* 604.00-606.00
PTA CFR SE Asia ($/mt) 622.0-624.0
PTA CFR South Asia ($/mt) 627.0-629.0
EDC CFR FE Asia ($/mt) 251-253
EDC CFR SE Asia ($/mt) 258-260
EDC FOB NWE ($/mt) 228-232
EDC FOB USG ($/mt) 215-225
VCM CFR FE Asia ($/mt) 744-746
VCM CFR SE Asia ($/mt) 759-761
VCM FOB NWE ($/mt) 588-592
VCM FOB USG ($/mt) 650-660
Acrylonitrile CFR FE Asia ($/mt) 1369-1371**
Acrylonitrile CFR SE Asia ($/mt) 1379-1381**
Acrylonitrile CFR South Asia ($/mt) 1379-1381**
Acrylonitrile FOB USG ($/mt) 1320-1330**
Acrylonitrile CIF ARA ($/mt) 1288-1292**
Acrylonitrile CIF Mediterranean ($/mt) 1318-1322**
Monthly Contract Price
PTA FD NWE (Eur/mt) (Oct) 615-625
PTA Delivered USG (¢/lb) (Oct) 41.49-41.49
VCM Delivered USG (¢/lb) (Oct) 35.50-36.50
US domestic prices reflect transaction pricing for medium-sized customers.
* Average prices for week ending previous Friday.
** ACN prices reflect assessments at close of Tuesday
Platts Asian PTA versus Paraxylene ($/mt)
($/mt)
900
PTA CFR China PX CFR Taiwan
850
800
750
700
650
600
03-Jun 01-Jul 29-Jul 26-Aug 23-Sep 21-Oct
Notes: All intermediates prices reflect assessments at close of Thursday, with the
exception of PTA CFR China.
Zhengzhou Commodity Exchange but it fell later in the week to close at
Yuan 4,862/mt. A Chinese trader attributed the volatility to the futures
market correcting itself as the increase seen earlier this week was not
sustainable. A major Chinese producer said that in the China domestic
market this week, there was more trading observed in PTA, with more
than 20,000 mt having traded. Market sources attributed this spike in
trades to an increase in domestic demand for polyester as end-users
sought to get more of the product in before the year-end festivities.
The CFR Southeast Asia and CFR India markers were both assessed
28
POLYMERSCAN october 26, 2016
flat week on week at $623/mt and $628/mt, respectively, in the
absence of firm trades. Upstream, prices were up this week, with
paraxylene rising $4.67/mt week on week to $783.67/mt FOB Korea
and $804.67/mt CFR Taiwan/China Friday. In Southeast Asia, trading in
spot cargoes was thin as most of the end-users were well-covered
supply wise by contracts. Demand for PTA in Indonesia was high as
there were some plant turnarounds, according to market sources. The
Indian PTA market remained self-sufficient this week with minimal
need for imports, an Indian end-user said. In plant news, China’s Hengli
Petrochemical restarted its 2.2 million mt/year No. 2 PTA plant in Dalian
this week. South Korea’s Hanwha Global Chemical has shut its No. 2
PTA plant in Ulsan, for two weeks in the second half of October.
Rationale
Asian PTA was assessed lower by $4/mt week on week at $607/mt
CFR China, tracking movements in futures contracts on the
Zhengzhou Commodity Exchange. A one-day-trip cargo was heard
offered by a major Chinese producer at $635/mt Friday morning.
The CFR Southeast Asia and CFR India markers were both
assessed flat week on week at $623/mt and $628/mt, respectively,
in the absence of firm trades.
Acrylonitrile
Europe
Fiber producers continue to struggle
„„
Saratov ACN plant returns from maintenance
„„
European acrylonitrile prices were assessed at $1,290/mt CIF ARA
Tuesday, down $20 on the week, as industry sources reported
weakening spot demand. One trader said it was currently a buyer’s
market, while a producer said the “heat” was out of the market
and that derivative outages following BASF’s force majeure at
Ludwigshafen may been affected demand. Another producer said
the contract market was doing well, and that there had been no
evident of any effect from BASF’s force majeure, adding that some
producers were in the spot market to cover contractual obligations
in Asia. Both producers reported strong offtake for ACN by most
derivatives, particularly ABS, but that fiber remains the black sheep
of the group. One of the sources said fiber producers were
struggling following the delivery of cheap Chinese product to
Turkey at levels not economically viable for European plants.
European plants were reported to be ramping down as a result.
Chinese fibers were heard offered at $1,700/mt, a $400 premium
over European ACN prices, while a premium of $500-600/mt is
typically required for the economics to make sense, depending on
the size of the plant, according to sources. The second ACN
producer said acrylic fiber is picking up slightly in Asia, however,
and that it would be looking to see whether Europe and the rest of
the world follows the Chinese movement. In supply, availability was
boosted by the return of Lukoil’s 150,000 mt/year ACN plant in
Saratov, Russia, while the larger of Ineos’ two lines in Cologne,
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
Germany, began a 12-day scheduled maintenance on the weekend
of October 22-23, a source close to the company said. The
maintenance was not expected to affect supply.
Rationale
European acrylonitrile spot was assessed at $1,290/mt CIF ARA
Tuesday, down $20 on the week. A range of indications was heard in a
range of $1,250-$1,320/mt on various delivery basis. After normalizing
prices, S&P Global Platts assessed at $1,290/mt, which was seen to be
the most repeatable level following softer demand.
United States
Falling demand, propylene pressure spot
„„
Oct Propylene CP expectations down 0.5-1 cent
„„
The US acrylonitrile export assessment fell $5/mt week on week at
$1,320-$1,330/mt FOB USG Tuesday. Fundamentally, while supply
remains tight, demand was heard decreasing this week. One
source said ACN pricing at $1,250/mt would not be out of the
question given weaker demand and falling propylene pricing. Other
sources continued to talk pricing in $1,300-$$1,350/mt FOB USG
range. Feedstock propylene September contracts settled at a 6
cents/lb increase, with chemical grade at 41.5 cents/lb and polymer
grade at 43 cents/lb. October propylene contracts were nominated
earlier this month at 0.5 cent/lb decrease, with buyers pushing for
at least a 1 cent/lb decrease, sources said. Sources said tight
acrylonitrile supply would persist into 2017, after a force majeure
earlier this year. Ineos Nitriles declared a force majeure in mid-July,
sources said. The force majeure declaration was on ACN out of the
450,000 mt/year Green Lake, Texas, plant in mid-July, sources with
knowledge of operations said, and that it will remain until at least
through the year’s end. Ineos Nitriles is still running its Green Lake,
Texas, ACN plant at reduced rates, sources said. A company
spokesman declined comment on the operational status of the
plant, citing company policy. In global markets, ACN pricing was
stable to lower on the week. The CFR Far East Asia assessment fell
$5/mt week on week to $1,370/mt, and CFR South Asia was down
$5/mt at $1,380/mt. In Europe, CIF ARA basis assessment fell $20/
mt week on week and was assessed Tuesday at $1,290/mt, while
the CIF MED basis assessment remained at $1,320/mt Tuesday,
with the market remaining tight. The US acrylonitrile domestic
contract assessment was flat on the week, assessed at 60.75
cents/lb delivered. The domestic assessment is a formula-based
contract price using feedstock chemical-grade propylene as well
as ammonia, per market feedback. US ammonia contract prices
settled at $230/mt, per market feedback.
Rationale
US export acrylonitrile was assessed at $1,320-$1,330/mt FOB USG, flat
on the week, based on price indications at $1,300-$1,350/mt, leaning
to the higher side on tight supply. The US ACN domestic contract
assessment was flat, assessed at 60.75 cents/lb delivered as
chemical-grade propylene contracts settled at 41.5 cents/lb and the
29
POLYMERSCAN october 26, 2016
ammonia contract price settled at $230/mt. Chemical-grade propylene
and ammonia are the key variables in the formula-derived contract
price, based on industry feedback.
Asia
Weak demand from downstream acrylic fiber
„„
Feedstock propylene falls $50/mt on week
„„
The Asian acrylonitrile market was $5/mt lower week on week, with CFR
Far East Asia assessed at $1,370/mt and CFR South Asia at $1,380/mt
Tuesday. Upstream, feedstock costs for propylene was assessed at
$840/mt CFR China, down $50/mt from a week ago. There was a deal
heard done at $1,380/mt CFR India. Meanwhile, one downstream
manufacturer of acrylic fiber said his company was looking to adjust the
operation rate to 70% next month, down from the current run rate of
80%. He said acrylic fiber prices, at $1,650-$1,700/mt currently, were still
not catching up with the relatively high ACN prices. The source also said
that there were some European cargoes being offered to Asia. But this
could not be confirmed directly with sellers.
Rationale
The Asian ACN price was assessed $5/mt lower week on week at
$1,380/mt CFR South Asia Tuesday. This was in line with a deal heard
concluded at $1,380/mt CFR India. The CFR Far East Asia price was
assessed at $1,370/mt, above the $1,350/mt buy indication.
Ethylene Dichloride / Vinyl Chloride Monomer
Europe
Most market participants away
„„
VCM firms in Asia
„„
European EDC and VCM prices were assessed stable on the week Thursday
at $230/mt FOB NWE and $590/mt FOB NWE respectively. There were no
fresh indications heard in the market and prices in Asia, which were largely
stable, also didn’t provide any fresh direction for the market. In Asia, the
EDC marker was unchanged week on week Thursday at $252/mt CFR
Fareast Asia. The VCM assessment was made up a marginal $10/mt week
on week Thursday at $745/mt CFR Fareast Asia. Other constituents of the
chlorovinyls chain, including PVC and caustic soda, were all assessed stable
this week. Several market participants of the chain were attending the K
Fair in Dusseldorf, Germany, and were therefore away from their trading
desks. In plant news, KemOne will shut its chlorine/caustic soda plant in
Lavera, France, for a conversion to electrolysis membrane technology. The
plant is the source of 25% of French chlorine production and may impact
the otherwise quiet chlorovinyls chain.
Rationale
EDC and VCM FOB NWE prices were assessed flat on a lack of fresh
indications. EDC tracked Asia in a quiet market and VCM was stable
amid a dearth of indications. Other members of the chlorovinyl chain
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.
were also assessed flat this week and provided no new direction to
EDC or VCM.
United States
Feedstock ethylene prices softening
„„
EDC pricing stable with limited overseas demand
„„
EDC: US ethylene dichloride was assessed Thursday at $215-$225/mt
FOB USG, stable week on week. No confirmed deals were heard on the
week, with price indications heard around the last reported October
trading levels of $220/mt FOB USG. Sources have said that despite
limited availability in the US, softening ethylene prices and weaker
demand from Asia have kept prices from moving higher. Sources in
Asia indicated prices could edge higher in the coming week, tracking
firmer PVC markets. In feedstocks, US ethylene prices were last
assessed Wednesday at 29.75 cents/lb FD USG cents/lb FD for the
prompt month, down 2 cents from last Thursday. VCM: US vinyl
chloride monomer prices were assessed $40/mt higher for the week
Thursday at $650-$660/mt FOB USG, as market participants talked
prices higher amid tightness and firming in the Asian market. Sources
have said spot deals were difficult currently because product would
have to be diverted from other uses or contract buying. Export PVC
pricing for October was assessed Wednesday at $765-$775/mt FAS
Houston, stable week-on-week, as pricing continued to be talked in a
wide range, with market participants noting that pricing could vary
greatly depending on where it was being sent. The majority of market
participants talked pricing in the $760-$780/mt FAS Houston range.
Rationale
EDC: US ethylene dichloride was assessed at $215-$225/mt FOB USG,
flat for the week, based on pricing indications at that level. VCM: US
vinyl chloride monomer was assessed at $650-$660/mt, up $40 for
the period, with pricing indications at that level based on tightness and
higher Asian markets. VCM contracts were assessed at 35.5-36.5
cents/lb delivered, stable week on week, tracking unchanged pricing in
the downstream PVC contract assessment.
Asia
VCM markets lifted by higher PVC prices
„„
S Korea’s Sep EDC exports fall 30% versus Aug
„„
EDC: The Asian ethylene dichloride market was stable to lower
Thursday. The spot market was rangebound at $250-$260/mt CFR
Far East Asia amid sluggish trading. Downstream vinyl chloride
monomer and PVC markets were seen to be firmer, but the Asian
EDC market remained steady in line with a stable US EDC market.
FOB US EDC price was assessed unchanged week on week at $220/
mt last Thursday, S&P Global Platts data showed. A producer said
EDC prices could rise, tracking firmer PVC markets this week, and
expected offers for EDC to rise as high as $280/mt CFR FEA. In
related news, South Korea’s EDC exports in September totaled
17,976 mt, down 30.4% from a month earlier, and up 28.8% from a
30
POLYMERSCAN october 26, 2016

year earlier, according to customs data released Monday. VCM:
Sentiment in the Asian vinyl chloride monomer market firmed this
week in line with a rising downstream PVC market. On Wednesday,
the CFR China PVC marker was assessed up $20/mt week on week
at a two-year high of $920/mt, data showed. VCM supplies in Asia
are also reported to be tight, especially in Taiwan, due to limited
ethylene supplies triggered by a ethylene pipeline maintenance
work scheduled for November-January. Also, Taiwan VCM restarted
its 420,000 mt/year VCM plant last week after completing a planned
maintenance program that began in early September. Currently the
plant is operating at 90% of capacity. In data out this week, South
Korea’s VCM exports in September rose 9.2% from a month earlier
to 19,064 mt, according to the customs figures released Monday.
Year on year, South Korea’s VCM exports in September were up
144.9%. In Japan, the country’s VCM exports in September fell
41.9% from the month before to 46,638 mt, the Vinyl Environmental
Council said in a statement Tuesday.
Rationale
EDC: The CFR Far East Asia EDC marker was assessed unchanged
week on week at $252/mt Thursday. A buying idea was heard at $250/
mt CFR FEA, while a sell idea was reported at $260/mt CFR FEA. In
Southeast Asia, the EDC spot price was assessed $6/mt lower at $259/
mt CFR SEA. November selling ideas were heard at $260-270/mt CFR
SEA. VCM: The CFR Far East Asia vinyl chloride monomer marker was
assessed up $10/mt week on week at $745/mt Thursday. This week,
some deals were reported done at $740-$750/mt CFR FEA, while an
offer was heard at $770/mt CFR FEA.

News

Ineos’ Rafnes steam cracker expected

to return to production end Nov: source
London — Ineos’ steam cracker in Rafnes, Norway, is expected to
begin producing olefins again at the end of November, a source
close to the company said on Wednesday. Ineos’ Norway cracker
suffered an outage in the first half of October following a fire at
the compressor, a critical unit in ethylene production. News of
damage to the compressor prompted expectations it could be out
of action for around six weeks. The Rafnes site also houses a
140,000 mt/year low density polyethylene plant, which is normally
fed with ethylene from the cracker. But this is now being sourced
externally, the source said. Ineos was not immediately available THE BARREL
for comment. The Rafnes cracker is one of two belonging to Ineos
capable of cracking ethane to produce ethylene. In the case of
The Platts blog that spans the
Rafnes this is 560,000 mt/year of ethylene. Sources had said US commodities spectrum
sourced feedstock ethane may have been diverted to Ineos’ Read and respond to posts from Platts editors and analysts on
second ethane cracker at Grangemouth in Scotland following the issues affecting a wide range of the world’s energy, petchem,
outage. Ethylene spot price discounts to the current contract and agriculture resources.
price have been dwindling since the outage at Rafnes and before a
Oil, Natural Gas, Electricity and Coal, Steel and Metals,
temporary shutdown of two steam crackers and many derivative
Petrochemicals, Biofuels and Agriculture, Renewables
plants at BASF’s Ludwigshafen, Germany, site. Trade sources
pegged prices in Europe at discounts of 10% to the October …as well as commentary, analysis and observations on
contract price delivered in Northwest Europe on Friday. Spot everything from global politics, to market dynamics. The Barrel
ethylene was assessed at Eur915.50/mt FD NWE on Tuesday, up strives to be the world’s most complete commodities blog,
and its comment section is always open for your thoughts.
Eur22.50/mt from Eur893/mt on the first working day of October.
Visit http://blogs.platts.com/ now!
S Korea’s Kumho to restart Ulsan PS,
ABS plants by Nov 4
Tokyo — South Korea’s Kumho Petrochemical plans to restart its
polystyrene and acrylonitrile-butadiene-styrene plants in Ulsan by Pemex’s September ethylene output falls 15%
next Friday, November 4, after an annual maintenance, sources on month, propylene output down 9%
close to the company said Wednesday. The plants were shut on
Monday this week, the sources said. The company has a 250,000 Houston — Pemex’s ethylene production totaled 57,912 mt in
mt/year ABS plant and a 250,000 mt/year PS plant, both located in September, down 15% from August, the Mexican state company said
Ulsan. Wednesday, This was its second-lowest monthly total in 2016.

© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 31
POLYMERSCAN october 26, 2016

Production fell 28% compared with September 2015, when the
company’s ethylene output totaled 80,961 mt, it said. Pemex uses the
majority of its monomer output for the production of downstream
derivatives, including polyethylene grades. Pemex’s propylene output
totaled 998 mt in September, down 9% from August, it said. The
company’s output fell 15% compared with September 2015, when
production totaled 1,170 mt. The production level was the lowest output
for the year. Pemex uses the majority of its production of the monomer
for downstream derivatives, including the production of acrylonitrile.
ARA propane barge spot buying to stay thin
to second half November: sources
London — Spot demand for propane barges loading in the
Amsterdam-Rotterdam-Antwerp region is not expected to rise
significantly before the second half of November, market sources
said. “Propane barge demand is zero,” one market participant said
Tuesday. This comes as buyers remained mostly on the sidelines
with termed volumes mainly deemed sufficient to meet
requirements for now. “For now, term contracts will cover. Reckon
[second half of November] to see some spot demand,” the market
source said. For the first half of the new month, however, spot
demand is expected to edge lower as fresh contract volumes are
available for sale, a second market source said. This, combined
with limited inland heating demand, is likely to see little buying
interest beyond contracted volumes for the first November half,
although this could change into the second half of the month as
termed volumes are drawn down. According to the first source,
market participants were currently also waiting for German
November inland contract prices to settle and Rhine water levels to
improve. Market participants expect this contract price to increase
by up to $50/mt and accordingly ARA propane to become more
attractive relative to product from German refineries. In addition,
increasing Rhine levels could see more propane barges finding
their way inland from the ARA region. Rhine water levels were 104
cm Wednesday at Kaub, Germany, up 8 cm on the day and 32 cm
on the week. Low Rhine levels have recently further hampered
demand for propane barges loading in the ARA region as they
could not be fully loaded, thus increasing freight costs. Propane
barges were assessed at $331/mt FOB ARA Tuesday, up $1/mt on
the day and $38/mt below the propane large cargoes CIF
Northwest Europe, stable on the day. This is the steepest discount
to the propane large cargoes since August 24 when it was $66/mt,
S&P Global Platts data showed.

Global Production Update

Company Location Capacity* Timing Status
kt/yr
Westlake Calvert City, KY 386 PVC July 21, 2016 SU
Shintech Plaquemine, LA 600 OVC Q4 2016 TA
Shin-Etsu Kashima 550 PVC mid-May to mid-June TA, 1 month
Formosa Mailiao 420 PVC August-September TA
AVC Laverton 130 PVC Feb 2016 Permanent SD
LG Chem Yeosu 640 PVC Aug 2016 Shut; 3 lines for 1 week
LG Chem Daesan 250 PVC Dec 2016 Shut 1 week
Taiyo Yokkaichi 310 PVC Mar-April 2017 TA, 1 month
TA = scheduled turnaround; SD! = unplanned shutdown; SU = startup; DB = debottlenecking; OR = operating rate

POLYMERSCAN
Volume 39 / Issue 43 / October 26, 2016
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© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 32
POLYMERSCAN october 26, 2016
Subscriber Notes (continued...)
Prices will be reported in Brazilian Reals and US dollars. Assessments
reflect prices at 1:30 p.m. CST each Wednesday. All of Platts Brazil domestic
polyethylene price assessments for spot HDPE injection grade (AABMJ04
for Reals and AABMI04 for dollars), HDPE blowmolding grade (AABMH04 and
AABMG04), HDPE film grade (AABMF04 and AABME04), LLDPE butene-1 grade
(AABML04 and AABMK04) and LDPE general purpose grade (AABMN04 and
AABMM04) will appear on PCA 245, PCA 246 and PCA 463. LDPE assessments
will also appear on PCA 267. LLDPE assessments also will appear on PCA 271.
HDPE assessments also will appear on PCA 275. Please direct any questions
or comments to petchems@platts.com with a copy to pricegroup@platts.com.
Please provide a clear indication if comments are intended for publication by
Platts for public viewing. Platts will consider all comments received and will
make these comments available on request.
Platts reviews publication of European ethylene, propylene CPs
Platts is reviewing its publication of the ethylene and propylene FD NWE
CP price due to industry concerns the negotiation process produces a
price that has become increasingly unreflective of the transactional value.
Platts invites all interested parties to engage in the review process and will
conclude the consultation on December 2, 2016. The review will consider
discontinuation of the following prices: Description Symbol Ethylene FD
NWE CP AAUDC00 Propylene Poly Grade FD NWE CP AAPST00 Please
send any comments or questions to pl_petchems_ln@spglobal.com and
pricemethodology@spglobal.com. For written comments, please provide a
clear indication if comments are not intended for publication by Platts for public
viewing. Platts will consider all comments received and will make comments
not marked as confidential available upon request.
Platts to discontinue several chemical freight assessments
Platts has decided to discontinue its Rotterdam-Brazil liquid chemicals freight
rate assessment and gas freight assessments for VCM on Europe-Turkey and
US-Turkey routes due to a lack of liquidity. Platts will end publication of these
assessments from December 23, 2016. Affected symbols: Rdam-Brazil, 1-2kt
© 2016 S&P Global Platts, a division of S&P Global. All rights reserved. 33
AARIW00 Rdam-Brazil, 5kt AARIY00 VCM: Europe-Turkey, 1.5kt AAXPB00 VCM:
US-Turkey, 1.5kt AAXPD00 Rotterdam-Brazil 1-2 kt MAvg AARIW03 Rotterdam-
Brazil 5 kt MAvg AARIY03 This decision note specifies two monthly averages
symbols and supersedes the decision note published on October 11, 2016.
Please send any comments or questions to pl_petchems_ln@spglobal.com
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clear indication if comments are not intended for publication by Platts for public
viewing. Platts will consider all comments received and will make comments
not marked as confidential available upon request.
Repsol to join Asia benzene physical MOC Repsol Trading
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they would like to participate in the Platts Asia Market on Close assessment
process for benzene physical. Platts has reviewed Repsol Trading Singapore Pte
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Singapore Pte Ltd and Repsol Trading S.A. in the Asia assessment process
for benzene physical, subject at all times to adherence with Platts editorial
standards. Platts will publish all relevant information from Repsol Trading
Singapore Pte Ltd and Repsol Trading S.A. accordingly. Platts welcomes all
relevant feedback regarding MOC participation. Platts considers bids, offers
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process. For comments and feedback, please contact Platts editors at
petchems@spglobal.com and moc_review@platts.com
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