EMEA petrochemicals outlook

05:38' PM - Tuesday, 13/06/2017

Despite upside moves in previous trading sessions, uncertainty prevails in the European benzene market which remains backwardated albeit at a 4% discount to the June contract price.

It remains to be seen whether toluene prices can hold their ground in Europe with closed arbitrage and negative HDA conversion margins.

Meanwhile, styrene prices are set to remain supported as production problems persist in Europe.

On xylenes, the market has entered split settlement territory for the third consecutive month on the PX ECP.

OLEFINS

As a number of crackers return from maintenance, ethylene prices are set to remain stable with hesitation in releasing material to the market.

Sentiment was also largely similar on propylene, with price levels expected to move sideways on limited supplies.

POLYMERS

Polyethylene prices are set to remain flat as numerous buyers defer their purchases, with converters managing their stock levels.

Some PE producers were heard to close June order books in an effort to shore up softening prices.

Downside in the European polypropylene market is expected to reduce on global restocking demand.

Meanwhile, polystyrene producers will be keen to push up prices in line with higher feedstock styrene costs for June.

But sellers in the ABS market are hopeful of import volumes remaining limited in June, despite an open import arbitrage in March having potentially led buyers to secure product.

While sentiment had remained cautious in the European PET market ahead of the second settlement on feedstock PX June ECP, sellers were optimistic of summer demand keeping fundamentals supported.

METHANOL AND MTBE

Activity is expected to pick up this week as market participants return to their desks after a major industry event.

Prices are set to fluctuate ahead of Methanex setting its contract price for Q3.

MTBE markets remain balanced as the weakness in gasoline blending demand offsets shortfalls in European production.

Good import volumes from Russia are also matched against exports to the US Gulf and Latam countries.

INTERMEDIATES AND SOLVENTS

Tepid demand from both the PET and antifreeze industries is anticipated to keep MEG fundamentals stable this week.

But oxysolvents continue to face downward pressures with declining feedstock prices and improving supply.

Nonetheless, most prices continue to be at multi-month and multi-year highs.

ACN in Europe is set to remain tight until the end of June, especially as Ineos Nitriles is scheduled to start maintenance at its German plant in Cologne in coming weeks.

Price declines on VAM have been curbed by low inventories and the outage at Sipchem's plant in Saudi Arabia. -Platts-

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