The Urethane Blog

Propylene Turmoil in Europe

European propylene spot price rises to meet contract on supply cuts: market sources

 

London (Platts)--9 Jun 2016 849 am EDT/1249 GMT

 

 

The European spot price of polymer grade propylene has risen to be assessed at parity with the contract price for June at Eur652.50/mt ($740/mt) FD NWE, Wednesday, compared with a discount of 1-3% last week, market sources said.

The rise was attributed to planned and unplanned outages which were restricting supply of propylene from steam crackers, refineries and propane dehydrogenation units.

Polymer producer LyondellBasell had declared force majeure on polypropylene production from Tarragona, Spain on Wednesday following an unplanned shutdown at its propylene supplier.

LyondellBasell is primarily supplied by neighboring BASF Sonatrach PropanChem's PDH plant, which has a propylene production capacity of 350,000 mt/year.

Meanwhile, production issues had been heard at Dow Chemical's cracker in Bohlen, Germany, a customer said Wednesday. The cracker has an ethylene capacity of 565,000 mt/year.

BASF's cracker Ludwigshafen, Germany is in planned maintenance this month. Maintenance at the 660,000 mt/year ethylene cracker is expected to last until July, market sources told S&P Global Platts.

Naphtachimie's cracker in Lavera, France, remains in force majeure in response to strike action in the country. A buyer of ethylene from Naphtachimie said at the beginning of this month he did not expect the cracker, which has been under force majeure since the end of May, to restart production until this week.

The Naphtachimie cracker, a joint venture between Ineos and Total, has the capacity to produce 775,000 mt/year of ethylene.

BASF, Dow and Ineos were not immediately available to comment on their crackers.

Strike action in France called by the CGT labor union against changes to labor legislation continues to disrupt refinery and port operations, impacting propylene supply.

Total's refineries at Gonfreville, Donges, Grandpuits and Feyzin had been at a complete standstill since the end of May. Total confirmed Monday that Grandpuits had now restarted and a spokesman for the company said that some units at Gonfreville and Feyzin were also now in a preliminary restart mode.

However, Belgium's labor unions are calling for a nationwide strike June 24 against changes in labor legislation, which could impact refinery production again in NWE.

--Amar Carmody, [email protected]
--Edited by Maurice Geller, [email protected]

 

http://www.platts.com/latest-news/petrochemicals/london/european-propylene-spot-price-rises-to-meet-contract-26463633

Butanediol Price Hike Announcement

BASF seeks to raise North American BDO in July

01 June 2016 22:31 Source:ICIS News

HOUSTON (ICIS)--BASF’s proposal to raise North American butanediol (BDO) prices by 4 cents/lb in July drew the usual responses on Wednesday.

A seller – not BASF – welcomed the move, considering the four-year downturn in BDO prices. “It’s more than about time,” the seller said.

There has been no meaningful US BDO contract price increase since late 2012, with flat demand and oversupply weakened by falling oil prices, as with other petrochemicals.

US BDO prices rose slightly in each of the first two quarters of 2014, but since then, BDO contracts have dropped for seven straight quarters.

US and European BDO prices continue to rank as the highest in the world, with Asian prices at least 20 cents lower.

Buyers say there is too much BDO capacity, not just in the US but in China, though there is not much of a market in imported material.

A buyer called the increase out of line. “It should be a roll or coming down,” the buyer said of the BASF proposal.

BASF did not explain its price increase in the statement issued on Wednesday, 1 June.

BDO and its derivatives are used for producing plastics, solvents, electronic chemicals and elastic fibres.

BASF tried to raise prices in January by 5 cents/lb but the market ignored it and first quarter contracts dropped 6 cents/lb.

BDO second quarter contracts settled down 3 cents/lb on continued oversupply in the market.

In May, market sources began talking about a possible rollover for third quarter contracts, largely because of the recent rise in oil prices.

Major US BDO producers besides BASF include Ashland, Invista and LyondellBasell.

By Lane Kelley

 

http://www.icis.com/resources/news/2016/06/01/10004049/basf-seeks-to-raise-north-american-bdo-in-july/

Crude Surges

Crude oil surges to highest price in 7 months on U.S. supply surprise

 

Published: May 25, 2016 6:42 a.m. ET

 

 

 

 

 

 

EIA report ahead; API data showed 5.1-million-barrel drop

Getty Images

U.S. oil supply set to drop?

By

GeorgiKantchev

 

JennyW. Hsu

 

U.S. oil prices traded at their highest level in seven months on Wednesday after an industry group reported a larger-than-expected decline in U.S. crude inventories last week.

The American Petroleum Institute said late Tuesday that its data for last week showed a 5.1-million-barrel decrease in crude supplies. The U.S. Energy Information Administration will release its official data later on Wednesday and analysts polled by The Wall Street Journal expect U.S. crude stockpiles to have decreased by 2.5 million barrels.

“The unexpected API crude draw supports oil prices,” said Tamas Varga, oil analyst at PVM brokerage. “Short-term bullish developments dominate traders’ minds.”

Brent crude LCON6, +1.30%  , the global oil benchmark, rose 1.2% to $49.19 a barrel on London’s ICE Futures exchange. On the New York Mercantile Exchange, West Texas Intermediate CLN6, +1.13%  futures were trading up 1.2% at $49.18 a barrel.

The Energy Information Administration will also release its weekly estimate of production. U.S. output has fallen from a peak of 9.7 million barrels a day last year to below 9 million barrels in recent weeks.

Recent supply disruptions in Canada, Nigeria, and Libya are also helping to support the upward price momentum. However, some analysts say that the outages are likely to be temporary and many of those barrels will come back online soon.

“Recent supply outages are being gradually brought under control and this might make any oil price strength short-lived,” Varga said.

U.S. oil prices have surged more than 85% from their mid-February lows on expectations that the global crude glut that sent prices plunging in mid-2014 is set to shrink. Production has started to fall in some regions including the U.S. because of spending cuts, and unexpected outages in other countries are keeping additional barrels off the market.

Still, many see the glut continuing amid increased production from members of the Organization of the Petroleum Exporting Countries including Iran. The country is ramping up its crude output after international sanctions against Tehran were lifted in January.

“The oversupply in the oil markets is very solid. The imbalance has started to shift but still nowhere near a real tightening to the point of a shortage,” said Aaron Lynch, a market analyst at optionsXpress.

Nymex reformulated gasoline blendstock RBM6, -0.85%  — the benchmark gasoline contract — fell 0.9% to $1.64 a gallon. ICE gas oil changed hands at $450.25 a metric ton, up $3 from the previous settlement.

 

http://www.marketwatch.com/story/crude-oil-rockets-to-near-50-a-barrel-as-data-hints-at-us-supply-drop-2016-05-25?link=sfmw_tw

Wanhua TDI Hike

May 15, 2016

Dear Valued Customer,

Due to changing global market conditions Wanhua will increase the prices of its WANNATE®

TDI products by $0.05/lb (US$110/MT) in the North American and Caribbean regions effective

June 15, 2016, or as existing contracts permit. This increase is in addition to any previous

announcements.

Your Wanhua Sales Director will contact you shortly to discuss the details of this price

change.

Wanhua Chemical remains committed to the highest levels of safety, quality, supply, service,

and sustainable value for our customers and we thank you for your business and loyalty.

Initial Calls for Propylene Rollover

 

Initial May US propylene CP settlements call for rollovers: sources

 

Houston (Platts)--16 May 2016 929 am EDT/1329 GMT

 

 

The initial settlement for US May contract prices for chemical-grade propylene and for polymer-grade propylene called for rollovers at 31 cents/lb and 32.5 cents/lb, respectively, sources said Friday.

The settlements, if accepted marketwide, would be below the latest nomination of a 0.5-cent/lb increase and would snap a streak of three back-to-back increases.

In market activity Friday, May was offered at 30.75 cents/lb Mont Belvieu-pipeline basis.

US polymer-grade propylene was assessed Friday at 30-30.5 cents/lb FD USG, steady day on day for both May and June deliveries.

The contract price is generally 2-3 cents above spot PGP prices at the end of the prior month and the beginning of the new month.

Refinery-grade propylene pricing is also considered in the formula, because it is a large source of PGP. Refinery-grade product was steady Friday at 19.25-19.75 cents/lb delivered.

US propylene contracts are settled on a monthly basis between major producers and buyers.

The process includes price nominations by producers and subsequent negotiations with customers.

--Pavel Pavlov, [email protected]
--Edited by Lisa Miller, [email protected]

 

http://www.platts.com/latest-news/petrochemicals/houston/initial-may-us-propylene-cp-settlements-call-26443989

Dow TDI Increase

May 16, 2016

TDI Price Action

Dear Valued Customer:

Effective May 17, 2016, or as contracts allow, The Dow Chemical Company (“Dow”) will

increase its price $0.08/pound for all market segments in the United States for the

following products:

• VORANATE

Your Dow sales representative will be contacting you in order to answer any questions

you might have and to review your sales plan volumes.

Dow appreciates your business, and we look forward to our continued relationship.

BASF TDI Increase

May 13, 2016

Dear Valued Customer,

Due to current market conditions and a very tight supply and demand situation in the global

market, BASF Corporation is raising the price for all Lupranate® TDI products $0.08 per pound

effective May 15, 2016 or as contracts allow.

Your BASF Account Manager will provide details of this announced increase. We appreciate

your continued support of BASF Urethane Chemicals.

Benzene Falls

US EPS market quiet after recent price rollover

10 May 2016 22:21 Source:ICIS News

HOUSTON (ICIS)--The US expandable polystyrene (EPS) market was largely quiet this week after prices rolled over from April to May last week, market participants said on Tuesday.

One major reason for the rollover was the direction of feedstock benzene spot prices in April, market sources said.

Benzene contract prices jumped by 41 cents/gal at the end of March, but spot benzene traded below the contract price during the entire month of April. As a result, May benzene contracts settled down by 9-11 cents/gal at $2.08/gal.

Additionally, it became apparent in April that EPS demand was lower than expected. Some of that was the result of pre-buying in March, as buyers knew that prices would likely be going up in April.

US and Canada total sales and captive use jumped by 27.6% in March year on year, according to the American Chemistry Council (ACC).

Producers were successful in pushing through a price increase of 5 cents/lb in April. Producers separately announced the 5 cents/lb price increase for April around mid-March.

Market participants say that May volumes are increasing from where they were in April.

North American EPS producers include Dart Polymers, Flint Hills Resources, Grupo Idesa, Nexkemia Petrochimie, Nova Chemicals, Plasti-Fab, StyroChem International and Styropek.

By David Love

 

http://www.icis.com/resources/news/2016/05/10/9996616/us-eps-market-quiet-after-recent-price-rollover/

Oil Prices Reach $45

Oil prices hit six-month high

Nathan Bomey, USA TODAY 7:43 a.m. EDT April 27, 2016

(Photo: Jennifer Reynolds, AP)

 

Oil prices edged higher Wednesday, touching highs not seen in about six months, as the commodity maintained momentum amid signs that a global surplus is easing.

West Texas Intermediate crude oil, the U.S. benchmark, rose 1.8% to $44.82 at 7:28 a.m., while Brent crude, the global benchmark, rose 1.8% to $46.57.

The commodity has gotten a boost in recent weeks from market confidence that the Organization of the Petroleum Exporting Countries and Russia will freeze production at current levels, while U.S. production levels off.

On Wednesday, several reports that the American Petroleum Institute had said U.S. oil inventories fell by 1.1 million barrels last week gave the commodity another jolt.

Any sign that inventories are being used up is viewed as a positive sign for energy producers that have been ailing during oil's slide.

Still, even the most financially resilient oil companies can't escape the crisis without sustaining some damage. Oil giant Exxon Mobil on Tuesday lost its pristine AAA credit rating from Standard & Poor's in a reflection of the market's sharp downturn.

 

http://www.usatoday.com/story/money/2016/04/27/west-texas-intermediate-crude-oil/83584300/

Propylene Up 1c/lb for April

Now at $0.31/lb for chemical grade . . .