Polymer and petrochemicals outlook in the Americas for the week of August 12, as reported by SP Global Platts.
Ethylene market participants will closely watch the status of the outages at the Chochaw hub and ExxonMobil's Baytown, Texas, olefins complex. The propylene market will focus on the restart timeline of the steam cracker that was shut down at the ExxonMobil complex, as it yields a high propylene output. Moreover, market participants will follow the propylene stocks that will be released at the US Energy Information Administration's weekly report Wednesday.
US polyethylene market sources said heading into the week that they were uncertain if activity would pick up again. Buyers and sellers were in a standoff last week following news US President Donald Trump was targeting 10% tariffs on all Chinese imports that do not yet face such taxes. Before Trump's tweet regarding the tariffs last week, US PE activity had been lackluster, with prices under pressure due to soft global demand. US polypropylene sources remain watchful of fluctuating polymer-grade propylene prices, which serve to influence spot PP pricing more than traditional market fundamentals. Recent unplanned maintenance at Baytown and Flint Hills Resources in Houston have yet to have an impact on PP pricing.
Latin America can expect stable to lower PE pricing this week amid weak market sentiment. Market participants continued watching the US PE market, where July domestic contract prices fell 3 cents. The 3-cent decline was also in line with market expectations of a lower CP for July. Others believe that larger volume size buyers likely received more than a 3-cent decline from June as well, sources said. Moving forward, the expectation is for another decline in August, according to market feedback. The Brazilian PE market is expected to start the week under continued pressure from international prices, which could push CFR prices to lower levels during the week. Currency exchange rates are starting the week less favorable for the Real at Real 4/$1, putting less pressure on domestic prices. In Argentina, the direction for domestic prices is still unclear. Generally, prices in Argentina change at the end of each month, however, the PE market is looking for direction after an explosion at ethylene cracker BB 2 at Dow Chemical's Bahia Blanca complex at the end of June. The company said the complex would be offline until the end of the third quarter, which could boost prices due to a lack of availability. Some sources reported Friday that both Dow and Braskem raised their domestic prices by around $50/mt for most of their PE grades.
Latin America will see stable to lower PP pricing this week amid weaker global economic sentiment. There is no incentive for imports amid political instability and most regional currencies are depreciating against the US dollar. Meanwhile, market participants continue waiting for fresh pricing indications from regional producers who continue to watch international pricing trends before providing offers to customers, sources said. Braskem raised its Brazilian PP homopolymer and co-polymer prices by Real200-300/mt, the company said late Friday.
US export PVC prices were expected to remain in a range of $765-$775/mt FAS Houston this week, the range in which US producers settled August pricing. The market was awaiting news of fresh September offers in Asia this week, which Asian sources expect to range from a rollover of August levels to a $20-$30/mt increase. While Asian price direction is often seen as a bellwether for US price direction, US market sources maintain that international demand remains lukewarm as buyers seek prices seen as unworkable when paired with freight and other costs. Upstream, ethylene dichloride prices could see some upward movement this week amid some destocking, although Braskem was expected to begin arranging for fourth-quarter imports of US EDC in the coming weeks.
US benzene prices were expected to be flat to lower in the coming week amid softer demand from the styrene segment as well as ample availability. Despite expectations of multiple turnarounds in Europe and Asia in September and into Q4, styrene prices in the US are expected to remain lower, with some sources putting notional pricing under $900/mt. Supply-side conditions along the chain were not expected to see significant change and domestic benzene output from toluene conversion units was expected to remain curtailed amid poor margins. STDP margins remained poor on continued softness in paraxylene pricing. This was not expected to change in the near term as the global paraxylene market is characterized as long amid recent capacity additions in Asia. TDP margins improved somewhat with a recent uptick in mixed xylene pricing late last week. Mixed xylene prices were expected to be flat amid continued PX softness.