US POLYMERS: US polyethylene prices are expected to fall this week as market participants are bearish on the market and anticipate two of the three grades to reflect the weak market sentiment caused by the coronavirus outbreak.
Sources see high-density polyethylene between 30-31 cents/lb rail car basis and linear-low density polyethylene at 31 cents/lb rail car basis. Both grades are expected to fall again this week as demand is starting to wean off. Low density polyethylene has been talked tight by sources at 40 cents/lb rail car basis and is expected to continue being tight into the week. As the coronavirus continues to take hold of markets globally, prices are expected to continue a slide downward, especially for HDPE and LLDPE grades, while HDPE should remain firm. Sources continue to expect US domestic contract pricing flat as the domestic market continues to remain static. Last week polypropylene fell $11/mt on the week as there continued to be limited spot availability during the heavy turnaround season and it's unlikely to change until polypropylene plants restart, sources said. Meanwhile, the general sentiment continues to bearish and weak as volatility continues in the marketplace due to coronavirus spread and as countries amp up containment operations globally.
US METHANOL/MTBE: In methanol, demand remains bearish as global manufacturing activity in countries declines due to the coronavirus pandemic. The US, however, remains the highest price global market for methanol volumes. The decision by Methanex to indefinitely idle facilities in Trinidad and in Chile could serve to tighten domestic supply and add at least some support to prices. Major declines in energy complex prices have also taken a toll on the value of US MTBE, with domestic prices plunging to multiyear lows. Declining margins could eventually lead to regional production cuts, although the domestic market was heard to still be somewhat tight.
LATIN AMERICA POLYMERS: Latin polymers are expected to see lower prices during the week due to the Coronavirus pandemic reactions in the global market. In Brazil's polyethylene market, prices during the week are expected to see lower values in most of the grades, expect for LDPE, tight in the market. The foreign exchange rate has seen intense volatility with the Real reaching up to the 4.98/$1 levels Monday, the highest exchange rate value in its history, making room for hikes in the domestic market. Polypropylene is likely to be driven by Asian and Middle-East movements instead of the US. International PP prices have been dropping in the past weeks in the Asian region, affected by lower operations and limited shipments from the area. In the West Coast of South America, spot import polyethylene prices are expected to highly attached to the US movements on the week, continuously lower in HDPE and LLDPE, while stable in LDPE. Polypropylene is expected to see mixed signals following both Asian and US markets; however, both markets has seen prices down week on week. The ongoing collapse in the oil global market prices are generating instability in the market, especially for PP prices, combined with the Coronavirus pandemic still affecting shipments from Asia, and freight rates reported under negotiation to increase. In Mercosur, spot pricing new list was expected for early March bookings, but most prices remained in the market with previous values. Distributors and traders from the region are now waiting for a new pricing list for April bookings. In Argentina, distributors believe it would be hard to see a new pricing list for March bookings, while discussions for April already started. However, some distributors find it hard to see future increases in the market considering recent falls in the global energy markets and demand lackluster. The Mexican market is well correlated to the US sentiment, therefore expecting possible falls during the week, although Mexico itself hasn't been much affected by the coronavirus directly.
US VINYLS: US export polyvinyl chloride prices were expected to remain in the March settled range of $850-$860/mt FAS Houston this week as market participants await producer announcements of fresh April offers in Asia. US market participants expect those offers to be lower than March levels as regions, including China, begin to slowly rebound from widespread shutdowns and cut rates amid measures taken to slow the spread of the coronavirus outbreak. US export PVC prices had gained momentum to reach an 18-month high this month amid tight supply from turnarounds and operational issues, but the coronavirus spread in the US has added uncertainty. A market source expects prices to hold at the current level or decline in April, if not before the end of March. Such moves depend in part on whether domestic demand maintains its current strength, but international demand has slowed significantly as buyers step back, awaiting signs of construction slowdowns. Upstream, ethylene dichloride prices were expected to maintain their assessed level of $275-$285/mt FOB amid tight supply ahead of turnarounds.
US OLEFINS: Propylene fell to an 11-year low last week, a trend that could continue thsi week as energy futres were poised to fall in early trading Monday.
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