Although energy prices fluctuated over the past week, when September delivery crude oil contracts expired last Tuesday, they continued to stand noticeably above the levels in early August, as per ChemOrbis. Nymex October crude oil futures settled at US$96.15/barrel on Friday while the level indicated a slight increase of around 0.15 cents/barrel on the week. Nonetheless, the settlement still represented an increase of over US$7/barrel since August started.
Apart from the firmer energy complex, ongoing production issues exerted an upwards pressure on spot monomer offers in the country. Flint Hills Resources continued to keep its Port Arthur, Texas cracker down since the middle of August after a power outage stemming from a lightning strike and following a small fire which broke out at a furnace, market sources reported. The cracker has a capacity of 617,000 tpa. Restricted supply combined with active buying interest pushed spot ethylene costs up by 4 cents/lb (US$88/ton) on FD USG basis last week. This level was reportedly the highest in three and a half months. Spot ethylene prices surged as much as 9.25 cents/lb (US$204/ton) when compared with the start of August. Tracking stronger ethylene markets, spot styrene offers rose by 0.5 cents/lb (US$11/ton) on FOB USG basis on the week, as per ChemOrbis. The recent figures stood 0.85 cents/lb (US$19/ton) above early August levels. Another driver behind the bullish trend for styrene was tight availability. Styrolution’s production problems remain in place. The company declared a force majeure on its North American output on August 1 after shutting its Sarnia, Ontario plant, citing a crack in a heat exchanger on July 24. The 500,000 tpa plant will remain offline until the end of October due to a scheduled maintenance. Plus, Westlake Chemicals already delayed the restart of its 570,000 tpa styrene unit in Lake Charles from the original date of July 14 to an unknown time in August after shutting it in late June.
EDC and VCM markets also added to their gains owing to restricted supplies combined with rising ethylene costs. Export offers posted weekly increases of US$15/ton for EDC and US$10/ton for VCM both on a FOB USG basis. Currently, EDC and VCM costs stand US$20/ton above early August levels. Higher EDC prices were supported by limited supply and higher ethylene costs, market sources commented, while lower ethylene availability and healthy demand from PVC makers supported firmer VCM offers. Similarly, spot polymer grade propylene costs gained 1.25 cents/lb (US$28/ton) on DLVD USG basis week over week supported by soaring energy prices, says ChemOrbis. The latest figures represented a 1.5 cents/lb (US$33/ton) increase with respect to early August.