Petrotahlil - US POLYMERS: US polyethylene spot export prices are expected to increase the week starting Jan. 11 as the market continues to face limited supply, strong demand and reduced production rates.
Sources expect pricing to increase as the market continues into the month of January. "We are seeing a steep increase," one trader source said. In domestic markets, contracts increased 5 cents on Jan. 6 from Dec. 23 after being at a rollover for two months in a row. Sources say the domestic contract grew because of producers' push for higher margins and stronger pricing. Meanwhile, in US polypropylene, market participants expect export pricing to increase as little to no availability persists into the New Year. One source said demand is still strong and they do not see the current tight situation changing until the end of the first quarter at the earliest. Domestic PP pricing contracts were assessed flat from Dec. 23 for both the homopolymer injection grades and the homopolymer fiber.
US OLEFINS: US Gulf Coast spot polymer-grade propylene is expected to remain at 29-month high amid tight supply and increased demand. US Gulf Coast spot ethylene is expected to remain at a six-year high amid outages and increased demand, sources said.
US VINYLS: US export polyvinyl chloride prices were expected to remain in a range of $1,445-$1,455/mt FAS Houston this week, an all-time high since S&P Global Platts began assessing the market in 1983. Supply availability was seen increasing, with two US producers having lifted lengthy force majeures on US PVC and upstream chlor-alkali rates having reached 80% in November, the highest level since rates crashed to 68% in April from 90% in March. Market participants were watching for levels of fresh offers for PVC in Asia, but US export supply availability largely depends on how much output inches up and how much of that is directed to the domestic market, as the typical winter decline in demand has not materialized.
US METHANOL & MTBE: US methanol prices are expected to be stable on the week, holding to weaker month-on-month values set earlier in January. Lackluster buying interest in the first part of January has contributed to lower values, despite regional supply having been talked as relatively tight. US spot MTBE prices are expected to be stable to stronger on the week, with robust export demand to Mexico and Latin America heard in the market.
US AROMATICS: An increase in benzene cargoes loading out of South Korea bound for the US is expected to dramatically increase US supply in late February, March and April, according to KITA data. More than 23,000 mt loaded over Jan. 1-10 may pressure benzene prices in the week ahead, potentially increasing the scale of backwardation in spot prices. Benzene finished the prior week at 245 cents/gal DDP USG for January and 240 cents/gal DDP USG for February delivery. Downstream, styrene prices, which closed Jan. 8 at $940/mt FOB USG for January and February loading, are expected to see support from export demand to Europe, where prompt styrene closed at $1,027.25/mt FOB ARA on Jan. 11, while supply remains tight to balanced in the US.
LATIN AMERICA: Latin polymers prices are expected to continue an uptrend in the imports markets of Brazil and the West Coast of South America considering the US movements for polyethylene and Middle East and Asia for polypropylene, among limited offers and deals expected for January. The foreign exchange rate started the week much unfavorable to the Brazilian real at 5.50/$1 on Jan. 11. The volatility has gained strength as the Brazilian government has not yet announced the purchase of COVID-19 vaccines, generating instability in the country. Domestic prices are expected to be flat after last week's increase from the local producer.
Polypropylene prices are expected to be unchanged on week. A downtrend was seen from Asia and Middle East - Brazil and the West Coast of South America imports mostly come from Asia and Middle East if compared to the US. In the WCSA, spot import polyethylene prices are also expected to continue highly attached to the US movements on the week, therefore mostly higher on the week. The PVC market in Latin America is expecting to continue seeing higher prices in the market. Freight rates from China to the Latin American region has increased significantly. Product is still unavailable in most of the markets. In Mercosur, market players expect to receive availability and new prices for January bookings. In Argentina, prices are expected be flat on week after the $100/mt increase announced last week for January.
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