US AROMATICS: US aromatics markets were expected to see little change on the week amid continued poor extraction spreads as blend values set the floor for mixed xylenes.
Prompt spot mixed xylenes prices held a roughly 6 cents spread to reformate values as demand from the downstream paraxylene segment continued to lag and overall buy interest was muted as supply remained ample. Paraxylene prices were expected rangebound as pricing continued to trace Asian values with US production curtailed and recovering demand from the PTA segment. The US toluene market has softened over the past week though the market remained in a contango structure with conversion (STDP) margins healthy on continued strength in benzene. Toluene's blend value was last estimated at near 251.50 cents/gal, S&P Global Platts data showed.
OLEFINS: PGP prices are expected to see a continued backwardation trend. Quiet trading has left prompt prices stagnant, though gains in front month prices have been trending while as the Dow's propane dehydrogenation unit maintenance has been underway. The maintenance is expected to be completed by next month, at which point the increase in supply is anticipated to bring spot prices back down.
Current ethylene supply has been described as "balanced" by market sources, with current maintenance and outages ongoing amid an oversupplied market. The Formosa OL3 cracker is expected back online by the end of the week, following an outage June 4. Backwardation spreads have been growing with Choctaw prices, following a force majeure declared by Nova Chemicals the week ending June 18. Prices rose following the shutdown, which is not expected to reopen until the end of the month.
METHANOL: The US methanol market has been described as "stagnant" by market sources, as participants wait for supply from the new YCI Methanol One facility to enter the market. Market sources have given conflicting reports in regards to the amount currently being produced at the facility. Prices are expected to remain stable until material from YCI enters the market in larger quantities.
US VINYLS: US export polyvinyl chloride prices were expected to remain in a range of 1,595-$1,605/mt FAS Houston the week of June 21 as market participants await fresh July offers. PVC supply remains tight amid an upstream feedstock chlorine squeeze and continued fallout from the deep freeze in February. Producers say they continue to chase strong demand, which has hindered efforts to restock inventories that were depleted after weeks-long freeze-related production shutdowns in February and March and exacerbated by some subsequent operational issues. That domestic demand strength was expected to dominate PVC sales, keeping export volume availability for July limited. Upstream, caustic soda demand also was seen strengthening with supply tight, as the latest industry statistics showed US chlor-alkali capacity in May fell to 74% from 80% in April.
LATIN POLYMERS: Prices are expected to be stable to lower this week for polyethylenes driven by more availability from the US and continuous downtrend from Asian prices, and also expects lower values for polypropylenes in the imports markets of Brazil and the West Coast of South America, driven by offers from Asia and Middle East. The Latin American region had been mostly relying on imports from Asia since early March as the US was having very limited volumes for exports, which opened a window of opportunity for Asian markets to stablish more competitive offers than the US. However, since mid-May more US material became available for the region, still at higher values than Asian material. Markets are dividing its expectations to see if US prices summed with freight would be more competitive than Asian products considering freight. The US is generally the most important supplier of polyethylene for the region, while Middle East and Asia for polypropylene. The only concern in traders is logistics costs from Asia, increasing lately and putting pressure on final CFR prices from that region. Costs were reported up to $500/mt in a short container week just for shipping and handling. In Brazil, local producer is expected to announce new prices next week for July bookings, while distributors are currently having mixed directions whether to negotiate purchases with discounts or not. Polypropylene prices are expected lower for the week with offers on the sea from Asia. Higher prices were seen from local producers in Latin America if compared week on week. Brazil and the West Coast of South America imports mostly come from Asia and Middle-East if compared to the US. The PVC market in Latin America expects to also see flat to lower prices on week for the WCSA driven by lower US prices. Most Latin American countries have poor demand at the moment, leaded by Brazil with buying interest very low. WCSA is currently seeing higher prices than Brazil, unusual for the market due to poor Brazilian demand. In Mercosur, prices for the last week of June bookings are expected to be flat, but distributors reported available discounts for large volume purchases. Prices are expected to be lower for July. In Argentina, prices are expected to be flat on week, while expectations for July are mixed. While some distributors believe there is no possible room for increases and international prices are putting huge pressure for drops, others say the local players could try pushing prices up for July.
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