US polyethylene market participants were looking to finalize domestic July contracts this week. Domestic June contracts were down by 3 cents/lb, but some sources have already said they expected July contracts to be stable to lower based on ample supply and stable to lackluster demand. US polypropylene market participants were dubious regarding the affect of the propylene monthly contact settling up 1.5 cents/lb on the PP spot market. Sources said the increase was anticipated and that spot prices won't be influenced in the interim. The coming week will be quiet, and if there are changes in the market ahead, they will not manifest until sometime later in August.
The Brazilian polyethylene market started the week amid continued pressure from international prices, which could trigger CFR prices to lower levels during the week. Currency exchange volatility is starting the week less favorable to the Real week on week, putting less pressure on domestic prices. Polypropylene prices were said to be stable by domestic producer Braskem. In Argentina, domestic prices are under uncertainty during the week. Generally, prices in Argentina are changed in the last days of each month, however, the polyethylene market has been under uncertainty after Dow Chemical's Bahia Blanca complex suffered an explosion in its ethylene cracker BB 2 plant in Dow Argentina at the end of June. The company said the complex would be offline until the end of the third quarter, which could move prices due to the lack of products available in the market.
US export polyvinyl chloride prices were expected to hover in the latest assessed range of $760-$770/mt FAS Houston this week as producers negotiate August pricing with market participants. A producer last week nominated August prices at $780/mt FAS Houston, $20/mt below July levels, after July deals had been heard done at $765-$770/mt FAS Houston. Global prices were weaker as well, with Asian prices falling $20-$25/mt after fresh August offers, which were announced later than usual, fell by $30/mt from July levels. European PVC prices also slipped $5/mt last week amid sluggish demand. US market participants say global demand remains tepid at best in key markets, from Asia and North Africa to Europe, and that sentiment has been spreading to Latin America as well. Upstream, ethylene dichloride pricing was seen weakening amid rising chlor-alkali rates that were boosting supply and low feedstock ethylene prices last assessed Friday at 15.50 cents/lb FD USG.
US spot benzene prices are expected flat to lower in the coming week as participants look to settle the August benzene contract. Participants anticipated a decline from the July contract, which was up 33 cents from June to settle at 267 cents/gal. No nominations were heard at time of publication. Downstream, spot styrene prices were expected to be flat to slightly higher amid expectations that the European market will tighten during the latter half of the year due to planned maintenance. Related to supply, benzene output from toluene conversion units was expected to remain at low levels amid continued poor margins for TDP and STDP operators. With chemical demand for toluene soft, gasoline blend values were expected to set the floor for pricing. Xylenes pricing was not expected to see significant movement with demand for mixed xylene set by octane demand as downstream paraxylene prices were set to remain below production costs for crystallization units.
Market participants in the spot methanol market await the second August methanol contract posting this week as the month draws to a close. While Southern Chemical Corp. released its August posting last Thursday, Methanex has yet to release its own posting. SCC's August contract was down 17 cents on the month to 100 cents/gal FOB USG after spot pricing dropped by nearly 20 cents over the course of July with high inventories weighing on prices.
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