Polymerupdate resin pricing: Asia, Europe see some price decreases as oil falls

Prices plunged in Asia across a broad swath of resins and monomers, according to Polymerupdate (http://www.polymerupdate.com), with drops in polypropylene (PP), polyethylene (PE), acrylonitrile butadiene styrene (ABS), SAN, and polystyrene (PS), on the polymer side and decreases in terephthalic acid (PTA), monoethylene glycol (MEG), benzene, toluene, and styrene monomer (SM), on the monomer front. A Japanese trader contacted by Polymerupdate reported that buyers have withdrawn from the market while many traders work to liquidate current inventories, anticipating further price drops.

Continued drops in crude prices are forcing revisions to prices for all grades of PP and PE at one producer reached by Polymerupdate. In addition to the drops in oil and naphtha, propylene and ethylene have also fallen, prompting price reductions ranging from between $30t o $50/tonne. Supplies remain somewhat constricted due to the shuttering of some crackers, which are now coming back online. A source told Polymerupdate that a Korean resin producer was putting forward PP with a $50/tonne price reduction, with HDPE injection prices lowered by $40/tonne.

Benzene prices in Asia firmed over concerns of Tropical Storm Dolly’s threats to oil installations in the Gulf of Mexico, with prices higher by almost $25/tonne to $1300/tonne FOB Korea. Downstream, SM rose as well to $1315/tonne FOB Korea mark. Benzene producer Daqing Petrochemical is scheduled to shut its complex for a maintenance turnaround on August 18, taking 90 kt/yr of benzene production offline for two weeks.

Propylene prices in Asia dropped by about $40/tonne due to a steady fall in global crude prices coupled with weaker naphtha rates. FOB Korea prices ended the week at $1730/tonne, while CFR China prices were assessed at $1780/tonne. This in turn has impacted PP, with China already adjusting PP prices downward and the rest of Asia awaiting a correction, according to Polymerupdate. The Chinese correction is also due in part to production and transportation restrictions in advance of the Olympic Games. Propylene offers to China at $1780 to $1800/tonne CFR have been countered with notional bids below $1750/tonne CFR.

Block copolymer PP has dropped to $2020/tonne CFR Far East and CFR South East Asia, with prices in South Asia assessed at $2080/tonne CFR. PP raffia and injection prices are seen at $2030/tonne CFR Far East and South East Asia.

In PS, Polymerupdate says softer upstream energy and falling SM feedstock prices, have pushed PS buyers across other parts of Asia to the sidelines, with inquiries for spot GPPS and HIPS having dried up and producers finding themselves in a very difficult position.

Despite the fall in crude and naphtha prices, LDPE has held its ground in most parts of Asia. Chinese LDPE producers have slashed local prices by more than RMB 800/tonne, but elsewhere in Asia sellers refuse to reduce their offer prices.

In Europe, contract PS prices were assessed up last week, with general-purpose contract prices at euro 1520/tonne FD North West Europe and high-impact grades at euro 1570/tonne FD North West Europe. Including the previous gains, contract prices for July are up more than euro 50/tonne from June levels. With SM above $1800/tonne FOB Rotterdam for August, PS sellers in Europe are determined to continue with the hikes although many buyers are resisting on the basis of a drop in upstream crude and naphtha. Polymerupdate says that buyers also point to the fact that as much as 60,000 tonnes of SM from the U.S. is expected to arrive in Europe next month and restarts are planned for Polimeri’s Mantova SM unit and BASF’s SM plant at Antwerp. In the spot market, general-purpose prices rose to euro 1245/tonne FD North West Europe, while HIPS was assessed at euro 1295/tonne FD North West Europe.

ABS contract prices in Europe also edged up, putting general purpose and natural grade ABS at euro 1840/tonne FD North West Europe, an increase of euro 10/tonne. Further pressuring prices, Polimeri’s Mantova plant expects to declare a force majeure.

Linear low-density polyethylene (LLDPE) prices also rose in Europe, where contract prices of butene-grade LLDPE rose to euro 1525/tonne FD North West Europe. In the spot market, prices surged along with demand, putting butene-grade LLDPE at euro 1430/tonne FD North West Europe. Europe''s LLDPE gains were supported by gains in U.S. prices due to robust export demand from Latin America and reports of firmer LLDPE prices in Asia. Additional news that Middle Eastern producer Equate slashed runs at its unit added to the momentum.

PP contract prices in Europe rose, with PP homopolymer injection grade at euro 1310/tonne FD north West Europe and PP copolymer at euro 1360/tonne FD north West Europe. Already in the month of July, PP contract settlements are up more than euro 100/tonne compared to June. Polymerupdate reports that despite the steep hike in July contract prices, PP producers insist that margins are still not acceptable and are targeting further hikes for August.