Argus DeWitt Propylene

Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Market snapshot
Highlights
Global prices
Americas
▪▪The February contract price settled down 1¢/lb.
▪▪Near-term propylene demand appears weak.
▪▪Domestic sales of PP in January fell 4.6pc compared to
Timing
January 2013.
Europe
▪▪Propylene remains tight, but spot prices are capped by the MCP.
▪▪The market is quiet with most producers maintaining a balance.
▪▪PP demand is good with producers focused on margin
improvement.
▪▪Global ACN prices increase with better demand and Asian
outages.
Asia-Pacific
▪▪Naphtha cracker margins rose on weaker feedstock prices.
▪▪PDH margins improved as propane prices fell.
▪▪Propylene prices were stable amid expectations of tighter
supplies.
▪▪Polypropylene margins remained negative on weak demand.
$/t
Global PG propylene prices
$/t
2,000
US
Poly grade USGC contract
Poly grade USGC contract
Poly grade USGC contract
Chemical grade USGC contract
Chemical grade USGC contract
Chemical grade USGC contract
Poly grade USGC pipeline spot
Refinery grade Mt Belvieu spot
C3 alkylation USGC calc value
PP Homo GP IM del EOR 31 Jan
Western Europe
Poly grade NWE contract
Poly grade NWE cif spot
Chem grade NWE cif spot
PP Homo GP IM NWE del 31 Jan*
Asia-Pacific
Poly grade Taiwan contract
Poly grade Taiwan contract
Poly grade Taiwan contract
Poly grade SE Asia cfr spot
Poly grade NE Asia cfr spot
Poly grade NE Asia fob spot
Raffia cfr China 12 Feb
*freely negotiated monthly prices
Low
High
Mid
1,538
1,323
1,587
2,657
1,565
1,337
1,676
2,679
1,620
1,642
1,554
1,587
1,609
1,521
1,551
1,330
1,631
2,668
1,523
1,482
1,917
1,536
1,516
1,957
1,536
1,530
1,499
1,937
1,380
1,460
1,400
1,490
1,390
1,480
1,420
1,520
1,370
1,350
1,326
1,385
1,470
1,410
1,505
Low
High
Mid
82
2,570
2,549
2,515
1,850
88
2,617
2,590
2,563
1,980
85
2,594
2,570
2,539
1,915
Feb
Jan
Dec
Feb
Jan
Dec
Jan
Feb
Jan
Dec
Nov
Oct
Acrylonitrile
$/t
Timing
1,750
US DeWitt marker ¢/lb
Europe T2 contract
Europe T2 contract
Europe T2 contract
Northeast Asia cfr marker
1,500
1,250
Feb
Jan
Dec
Nov
Jan
1,000
Jan 13
Apr 13
Jun 13
Sep 13
Nov 13
USGC spot
NWE spot
SEA spot
NEA spot
US contract
NWE contract
Feb 14
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Argus DeWitt is a leading independent source of pricing data
and market intelligence for the aromatics, olefins and related
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Copyright © 2014 Argus Media Group
Related feedstocks
Delivery
Ethane Mt Belvieu non-LST ¢USG
Propane Mt Belvieu non-LST ¢USG
Propane ARA large cargo $/t
Propane Argus Far East Index $/t
Propane S China refrig cfr $/t
Butane Mt Belvieu non-LST ¢USG
Naphtha full-range cif USGC ¢USG
Naphtha 65 para NWE cif $/t
Naphtha Japan c+f $/t
Low
High
Mid
Feb
Feb
42.00
150.00
792.00
46.00
167.50
802.00
1H Mar
Feb
887.00
143.75
255.76
908.00
926.00
891.00
151.00
258.76
910.00
930.00
44.00
158.75
797.00
889.00
889.00
147.38
257.26
909.00
928.00
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Americas
US/Canada
US prices
The February contract prices for PGP and CGP settled down
1¢/lb at 73.5¢/lb and 72¢/lb, respectively. Negotiations this
month were a bit of a rollercoaster. Nominations opened 1¢/
lb higher at 75.5¢/lb. However, spot trading for PGP ended
January around 70-71¢/lb, and in February, spot PGP fell to
69¢/lb. RGP traded below 60¢/lb, and it appeared physical
supply and demand did not account for contract premiums
to spot of 5.5¢ for PGP and 15.5¢ for RGP. Seeing these
premiums, some buyers sought contract price declines in
excess of 4¢/lb. The consensus finally settled for a small
decrease in the contract price.
$/lb
Propylene futures with open interest
¢/lb
Timing
Low
High
Mid
Poly grade USGC export spot
70.75
72.00
71.38
Poly grade USGC pipeline spot
69.75
71.00
70.38
Refinery grade USGC spot
60.00
60.63
60.32
C3 alkylation USGC calc value
72.00
76.00
74.00
C3 fuel USGC calc value
36.00
37.00
36.50
Propylene
Refinery grade USGC spot MTD
59.63
Polypropylene
PP Homo GP IM del EOR 31 Jan
120.50
121.50
121.00
Copolymer del EOR 31 Jan
122.50
123.50
123.00
82.00
88.00
85.00
Acrylonitrile
US DeWitt marker
Feb
US contract pricing
0.72
$/t
¢/lb
Feb
1,620
73.50
Jan
1,642
74.50
Dec
1,554
70.50
Feb
1,587
72.00
Jan
1,609
73.00
Dec
1,521
69.00
Poly grade
0.70
0.704
0.704
0.700
0.693
0.68
0.66
Feb 14
0.688
Mar 14
Apr 14
May 14
Jun 14
Chemical grade
Jul 14
— Nymex
Propylene demand in February and possibly March will
be softer than expected. PGP demand in PP will be lower
due to outages. It remains unclear how long many of these
maintenance activities will last. Propylene demand in
acrylonitrile will be lower, as Ineos maintains a 50pc operating
rate at its Green River, Texas plant. PO demand was down last
year, but demand for polyols increased 3.4pc and appears to
be holding that pace.
On the supply side, there is currently no maintenance
activity underway. Ethane is by far the preferred feedstock,
but butane is the next best option. With ethane currently at
44¢/USG, butane margins are only about a nickel lower. If
producers crack butane instead of very expensive propane,
propylene supplies from steam crackers will increase. With
RGP around 60¢/lb and alky values near 76¢/lb, refineries
typically hold back more propylene for alkylation. In fact,
there was a small draw on non-fuel use propylene of 6mn lbs
last week, according to EIA data.
In the near term, PP outages and slow market conditions
for ACN and PO will soften propylene demand. PP demand
could clear up quickly and recover in a matter of days. Weak
demand in ACN and PO markets will persist for a longer
period. Propylene supply will continue to be ample until
crackers and refineries move into turnarounds.
Copyright © 2014 Argus Media Group
¢/USG
US gasoline vs RPG
Gasoline
RGP
450
400
350
300
250
200
150
Feb 10
Jan 11
Jan 12
Dec 12
Nov 13
PP opened 2014 weaker. According to preliminary American
Chemistry Council data, total sales in January 2014 stood
2.6pc below January 2013. Domestic sales led off the year
4.6pc lower than last year. Recall that the first quarter of 2013
was a poor start to that year. Sales for the last three quarters
of 2013 struggled to end the year only 0.6pc behind 2012. This
year seems to be starting off in a deeper hole. The industry in
2013 managed to attain an 88pc operating rate.
Producers indicated their February PP books looked
healthy. More recently, amid two major outages, resin is
likely to be tight throughout the month. On 4 February,
Page 2 of 10
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Americas
PP production and operating rates
2013
2014
2012 OR
2013 OR
2014 OR
Domestic Production - '000lb
1,500,000
0.96
0.94
1,450,000
0.92
1,400,000
0.90
1,350,000
0.88
1,300,000
0.84
0.86
0.82
1,250,000
0.80
1,200,000
Operating Rate - %
2012
0.78
0.76
1,150,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
ExxonMobil declared force majeure on specific homopolymer
grades out of their Baton Rouge, Louisiana facility. At the time
of the announcement, allocation levels were not determined,
and the potential market impact cannot be assessed. In addition,
LyondellBasell declared force majeure on material produced on
Line C at their Bayport, Texas facility on the same day. Similarly,
allocations and timing on a return to full operation was not
yet available. Overall, contract minimums will probably not be
produced, anything on the spot market will be thin and expensive.
February ACC numbers are likely to appear worse than in 2013.
Acrylonitrile’s long slide in demand reversed abruptly in the
fourth quarter of 2013, according to AFPM data. Sales in the
fourth quarter of 2013 stood 10.7pc higher than the third quarter.
ACN was the only major propylene derivative to show sequential
growth from the third to fourth quarter. Much of the increased
ACN may have been contained in ABS. ABS saw modest growth
in the domestic market and a 5pc increase in exports in 2013
compared to 2012.
However, the US domestic market was not part of the ACN
recovery. ACN production increased by 63mn lbs from the third
to fourth quarter, but exports 113mn lbs. Consequently, the US
domestic market lost another 50mn lb in the fourth quarter.
Recall that in mid-December, Ineos, the largest ACN producer,
announced it would cut operations at its Green River facility
to 50pc, and nominated an export price of $1,955/t cif Asia.
Thereafter, even amid scant participation following the lunar new
year, an ACN deal over $2,000/t was done. Despite the strength in
that market, demand is such that Ineos will continue to operate
its plant at 50pc through February and March.
Overall, 2013 was a poor year for propylene oxide. Based on
data from one of the largest PO producers, while they increased
propylene production increased by 0.6pc, their PO production
fell sharply by 6.8pc. POSM-based production saw most of the
decline in PO production, while TBA production remained flat.
January continued to be a challenging month due to the poor SM
economics that disadvantaged POSM production.
While the domestic market for Oxo-alcohols, especially 2-EH,
Copyright © 2014 Argus Media Group
may be shrinking due to the pressure on DOP, supply and demand
is still well balanced. Two of the largest producers announced
price increases of 8¢/lb to be fully implemented by 15 January.
The higher prices were in response to a run of increases in PGP
and CGP. If propylene begins a long, slow decline, plasticizers
might not follow propylene downward, as higher seasonal demand
in the spring will tighten the market enough to maintain recent
price increases.
Latin America
The Brazilian polymer-grade propylene market is tight, as demand
remains strong amid lower output from crackers and refineries
limited by feedstock and operational issues. For chemical-grade
propylene, the market remains long due to poor demand from
Oxo-alcohols and acrylonitrile.
February is seeing continued strong domestic demand for
Brazilian PP. Following international prices, Brazilian PP prices
are increasing in February after a BRL 200/t increase in January.
Imports are expected to diminish after Resolution 02/2014 of
CAMEX, the Board of Brazilian Foreign Trade on 16 January,
imposed a provisional anti-dumping duty for the next six months
on PP imports from South Africa, India and South Korea. The duty
will be collected in a special fixed rate in USD per ton, according
to their origin (country/company). A depreciated BRL is also
discouraging imports, favoring local producers.
Consumption of Brazilian acrylonitrile is being restricted
by imports of finished products, and production is constantly
interrupted to manage the inventories. Operational problems
caused by storm that hit the Mexican plant weeks ago are not fully
resolved, and it is not running at full capacity.
The Brazilian Oxo-alcohols producer at the Camaçari – BA site
is consuming only minimum contractual volumes of CGP, suffering
from competition from n-butanol imports.
The domestic polyurethane market benefits from the Brazilian
government’s decision to extend lower taxes for the furniture
segment through August 2014. With operational problems,
the local refinery is not delivering CGP to the propylene oxide
producer, and its demand is being met by the Camaçari – BA
cracker.
A Brazilian cumene producer continues to run at 70pc of its
capacity, below the 80pc seen weeks ago.
New acrylic acid project is postponed
The startup of the BASF acrylic acid complex in Camaçari – BA
was postponed from late 2014 to the first quarter of 2015. The
project was delayed by rains, two strikes totaling 31 days, and
delays in material deliveries.
Brazilian propylene exports
In January 2014, 23,800t of propylene was exported from Brazil,
twice the volume exported in January 2013. Of those, 5,600t went
to Colombia at $1,446/t and 18,200t went to Mexico at $1,502/t.
▪▪
▪▪
Page 3 of 10
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Western Europe
Copyright © 2014 Argus Media Group
Western Europe prices
€/t
Timing
Low
High
Mid
Poly grade NWE cif spot
1,120
1,130
1,125
Chem grade NWE cif spot
1,090
1,115
1,103
1,340
Propylene
Polypropylene
Raffia del spot 31 Jan*
Jan
1,325
1,355
PP Homo GP IM del spot 31 Jan*
Jan
1,420
1,450
1,435
Copolymer del 31 Jan*
Jan
1,460
1,485
1,473
T2 contract
Jan
1,890
1,925
1,908
T2 contract
Dec
1,875
1,905
1,890
T2 contract
Nov
1,850
1,885
1,868
Acrylonitrile
*freely negotiated monthly prices
Western Europe contract pricing (MCP)
$/t
€/t
Feb
1,536
1,130
Jan
1,536
1,130
Dec
1,509
1,110
Poly grade
additional propylene, benzene and butadiene have until now
outweighed the cost advantage of propane. But if the cost
benefit of propane continues or improves from the current
levels, producers that have the flexibility will switch from
naphtha putting further pressure on the naphtha crack values.
North Sea Dated vs naphtha
Naphtha CIF
120
960
114
920
108
880
102
840
96
800
1 Nov
23 Nov
15 Dec
6 Jan
$/bl Brent
NS Dated
1,000
$/t naphtha
The propylene market is tight, but quiet with most suppliers
maintaining a stable position. Little spot volume is being
traded with most of the market either balanced or preferring
to keep any slight excess as a safety net. Additional production
is limited as cracker run rates and operating conditions are
being managed to keep ethylene stocks under control. At
the same time refineries are limited by profitability issues
and although imports have been widely explored neither the
timing nor pricing makes sense to most European buyers.
The length in ethylene is a consequence of increased
supply rather than reduced demand. Demand is on par with
2013, but availability is considerably greater since we now
have all the producing assets running and a light first-half
turnaround programme. For propylene there has been better
demand at the start of the year and we are not seeing imports
of either propylene or significant volumes of derivatives. In
fact European propylene is competitive with other regions,
unlike ethylene, allowing access to export markets for
propylene derivatives. There were also a significant number
of unplanned outages in the fourth quarter of last year so the
propylene market came into the new year with low stocks.
Finally, the only current operational outage is on a propylene
asset in Belgium. Overall the market is balanced to tight and
likely to remain so through the first quarter.
The propylene balance will be further tested by the
announcement by Versalis that cracker and aromatics
production in Porto Marghera will be shut from the end of
February for six months. The nameplate capacity for the
cracker is 200,000 t/yr of propylene. The plan is to maintain
supply to down-stream assets from other crackers allowing
them to run at higher rates. This is a further step by Versalis in
its long-term restructuring plan.
Following the settlement of the February MCP at a rollover
of €1,130/t, the naphtha price dropped in the first few days
of the month, but has since edged higher. On the day of the
contract settlement naphtha was at $923/t. It dropped to
$896/t in the first days of the month and is currently at a
prompt value of $909/t. North Sea Dated crude prices are
being supported by better than expected crude imports to
China and in Europe by an extension to the maintenance
outage at the Buzzard field, the largest in the North Sea.
Forward trading in crude oil for March is trading at similar
levels to the prompt price of $109.16/bl. Naphtha, relative
to crude, has weakened slightly since the beginning of the
year from levels of below -$3/bl at the start of January to an
average for February of -$6.61/bl.
The naphtha crack is being supported to some degree
by its continued use on flexible crackers despite propane
discounts of more than $100/t. Cracker operators have been
choosing to continue to run on naphtha as the benefits of the
90
28 Jan
Modelled cracker margins recovered in January as a result
of increased contract prices across all the main derivatives
and lower feedstock costs. So far in February, the fall in the
ethylene contract price is being balanced by the rollover on
propylene and increases for both butadiene and benzene. At
the same time feedstock costs are also slightly lower leaving
operator margins stable.
The refinery sector remains under pressure with the
increasing length in naphtha supplies and low margins for
Page 4 of 10
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Western Europe
€/t
Net cracker cash margins (NWE naphtha)
Diff
Complex
Simple
500
400
300
200
100
0
-100
Feb 13
Apr 13
Jun 13
Aug 13
Oct 13
Dec 13
Feb 14
gasoline. The problems were bought into focus by a report
from French oil lobby group UFIP, which said that French
refinery margins halved during 2013. The decrease in European
demand and competition in traditional markets owing to
the increase in exports from the US has squeezed European
refinery margins. French refineries ran at an average of only
70pc of capacity last year and the largest European refiner
reported that it expected to lose €500mn at just its French
refineries in 2013. The consequence for the propylene market
has been reduced supplies from refineries as they run at lower
levels, with a further rationalisation of capacity likely to take
place.
Resent data from Russia show that in 2013 propylene
production increased by 14.6pc compared with 2012. Over
the same period, ethylene production increased by 20.5pc,
demonstrating the increasing importance of non-naphtha
cracking in Russia. The ratio of propylene to ethylene
production fell to 53.9pc from 55.7pc in 2012, having peaked
in 2011 at 59.2pc. The volume produced from refineries has
returned to a more normal level of 30pc after the fire that
reduced output from a major refinery to 22.6pc in 2012.
‘000t
Russian propylene production
Refinery
Ex Cracker
500
400
300
200
100
0
Q1 10
Q3 10
Q1 11
Q3 11
Q1 12
Q3 12
Q1 13
Q3 13
PP demand was good in January and for some the best
month since summer 2012. The majority of sectors contributed
Copyright © 2014 Argus Media Group
to the volumes with only cast film PP for stationary showing
continued weakness as the market is increasingly dominated by
tablets and computers. Auto, textiles, packaging and BOPP were
all described as strong. February has continued the improved
performance with good order intake. Consumers remain cautious
about the market—they expect to be operating at steady rates
for the month going forward, but there is no expectation of
an upturn in the near future. Converters appear to be relaxed
about the availability and anticipate a continuation of the recent
strategic buying patterns, which have allowed them to take
advantage of anticipated lower prices by deferring orders until
the end of the month. With the possibility that market conditions
are beginning to change and propylene supply constrained, it
could be that buyers need to rethink their tactics.
Buyers have started the month saying they will not accept
any increase in February’s PP price, as they do not feel that the
market is tight enough to allow producers to push for increased
margins. Spot prices are mirroring the net contract price in the
range of €1,250-1,275/t delivered for homo-polymer grades and
€1,270-1,300/t for copolymer. Producers are clear that margins
need to improve and with the market balanced and the support
of an FM declaration in the UK and an outage in Belgium they
are looking for a small price increase. The level of increase is
customer specific subject to what rise was accepted in January,
but a range of €0/t up to €15/t is being discussed. There has
been a step change in the market price as the increase in import
duty is forcing structural importers to either absorb the cost or
pass it on. Absorbing the cost is not an option for most as PP
costs in the ME are not as advantaged some European consumers
believe. The differential of homo-polymer to co-polymer is
unchanged.
Other derivatives are also seeing steady demand so far in
February. ACN is having a strong start to the year with buyers
restocking, but also an improvement in sentiment. The change
has been triggered by the spate of shutdowns in China and the
US, but is also the result of a small improvement in underlying
demand. Even ABS, a laggard for most of last year, is showing
signs of improvement. ACN spot prices in Asia are moving above
$2,000/t and in some cases well above this level. In Europe, spot
prices are lagging at $1,920-1,960/t cif Med, but also moving up.
PO demand is being subdued by the lack of PG demand,
but overall levels are still reasonable, with some derivative
units running full. Producers using the POSM route are also
constrained by poor styrene demand and negative margins. Oxoalcohol units are all running, but the withdrawal from exports by
some producers because of negative margins in the second half
of last year has pushed more volume into Europe and is stifling
attempts to increase margins. Cumene has seen some marginal
improvement and run rates have improved from the lows of 6065pc seen last year.
Page 5 of 10
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Asia-pacific
Brent crude traded unchanged at $106-108/bl, while naphtha
traded lower at $919-934/t from a $935-952/t range. The price
of propane fell and is now trading at $30/t below naphtha.
While naphtha is currently the feedstock of choice for olefin
producers in Asia, propane is close to being a contender.
Producers are closely watching prices as the northern
hemisphere emerges from winter.
Naphtha cracker margins rose to $215/t from $150/t previously.
Lower naphtha prices are providing a relief to producers.
Propylene prices are drifting lower as demand is yet to recover
from the two-week lunar new year holiday in China. Derivatives
are struggling to pass on the cost increase, although there are
some positive signs on acrylonitrile (AN). Capacity losses will peak
at 9.3pc in April. Margins for propane dehydrogenation (PDH) have
risen to $244/t as propane prices eased.
$/t
Asian cracker cash margin spot
Cash margin right
C2 fob S Korea left
300
1,500
200
1,360
100
1,220
0
1,080
-100
940
Jul 12
Jan 13
Aug 13
-200
Feb 14
$/t
PDH cash margin
PDH Cash Margin, $/t C3 (right scale)
Propane CFR Japan (left scale)
Propylene FOB NEA (left scale)
1,500
600
1,300
400
1,100
200
900
0
700
-200
500
Jan 12
Jan 13
Aug 13
Feb 14
The following deals were seen this week:
$1,500 cfr China non-main port, 2 lots, duty free, 1H March
loading (equivalent to $1,475 cfr China main port, dutiable)
$1,475 cfr China, 2 lots, 1H March arrival
$1,470 cfr China, 3 lots, March arrival
$1,465 cfr China, 1 lot, 1H March arrival
$1,460 cfr China, 1 lot, 1H March arrival
$1,400-1,410 fob South Korea, 2-3 lots, March loading
▪▪
▪▪
▪▪
▪▪
▪▪
▪▪
Copyright © 2014 Argus Media Group
Low
High
Mid
±
Propylene
Poly grade SE Asia cfr spot
1,380
1,390
1,385
0
Poly grade NE Asia cfr spot
1,460
1,480
1,470
0
Poly grade NE Asia fob spot
1,400
1,420
1,410
-5
Raffia cfr China 12 Feb
1,490
1,520
1,505
na
Copolymer cfr China 12 Feb
1,540
1,570
1,555
na
1,850
1,980
1,915
+130.00
Polypropylene
Acrylonitrile
Northeast Asia cfr marker
Jan
Asia-Pacific contract pricing
$/t
€/t
Dec
1,370
1,008
Nov
1,350
993
Oct
1,326
975
Poly grade Taiwan
Spot propylene prices in Asia were mostly stable after trading
resumed in the China market. The persistently weak demand
from the downstream PP sector, as well ample availability of
competitively-priced domestic material, continued to hurt buying
interest for imported cargoes.
The full impact of the heavy turnaround season starting in
February has yet to be felt. A Taiwanese producer has sold 20,00030,000t propylene for March loading into China, while discussions
are under way to bring a 10,000t Iranian cargo to China for midMarch arrival. It remains to be seen if the deal could work out as
the seller prefers to sell on a formula basis, while buyers generally
prefer a fixed price with buying ideas capped at $1,430/t cfr China.
Inventories at onshore tanks remain high because of the heavy
congestion at some east China ports. Downstream consumption
remains slow as production has yet to return to full force. Refiners
in Shandong were possibly running at 40pc capacity, while Tianjin
Bohai’s PDH unit remains in a prolonged shutdown. The PDH unit is
expected to resume production on 17-18 February.
%
Propylene capacity loss
-400
Jul 12
$/t
Timing
C3 fob S Korea left
1,640
800
Jan 12
Asia-Pacific prices
2013
2014
0.12
0.09
0.06
0.03
Page 6 of 10
0
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Asia-pacific
Domestic prices in the Shandong market inched up from
10,400-10,500 yuan/t ex-tank late last week to Yn10,45010,500/t by the middle of this week, with buying activity
gaining momentum after the holiday. This placed the import
parity at $1,460-1,470/t.
Indonesia’s Pertamina resumed production at its RFCC
unit following a week-long disruption, but the market remains
well supplied. Malaysia’s Petronas may have one to two 3,000t
refrigerated cargoes available for March loading, while a
separate supplier may also be offering some February/March
cargoes.
Spot freight rates from southeast Asia to northeast Asia
stood at $200-215/t, while intra-northeast Asia freight rates
were at more than $85/t. The vessel Bow Guardian was
chartered to load 5,000t of propylene from Singapore to China
for 3-5 February loading. The Happy Penguin was chartered to
load propylene from Singapore to Europe, but the deal failed
to go through as the Singapore supplier will be selling the
propylene to its domestic pipeline customer.
The PP market in China has slowly picked up as trading
firms returned to the market this week. Several consumers
are extending their holiday until after the lantern festival that
falls on 14 February this year. Trading activity is slow this week
with prices for homopolymer unchanged at $1,490-1,520/t,
while block copolymer traded at $1,540-1,570/t. Inventories at
one southeast Asia producer is high as demand has been weak
for two weeks.
$/t
Homo PP non-integrated cash margin
Homo PP cash margin right
Homopolymer left
1,600
Copolymer left
50
1,500
0
1,400
-50
1,300
-100
1,200
Jan 12
Jul 12
Jan 13
Aug 13
-150
Feb 14
Chinese domestic market PP prices are trading at Yn11,15011,500/t ($1,436-1,475/t) for the homopolymer grade and
Yn11,500-11,900/t ($1,502-1,554/t) for block co-polymer grade.
Inventories at producers’ warehouses are high, while they
are low at converters. Operating rates in China have also
improved, resulting in additional supplies. February sees
Formosa Ningbo’s 170,000 t/yr unit down for maintenance and
Datang’s 230,000 t/yr production line running at low rates.
Most other PP producers are running well. Chinese domestic
Copyright © 2014 Argus Media Group
Outages
Shutdown
Plant
KTA
Duration
Taekwang
CPC no 6
PDH
250
11Feb-11 Mar
Cracker
360
10Feb-10Apr
CPC no 5
Cracker
250
10Apr-10Jun
Asahi Mizushima
Cracker
250
19Feb-15Apr
JX Nippon
RFCC
70
20Feb-30Mar
JX Nippon
Metathesis
140
25Mar-15May
Shanghai Secco
Cracker
600
1Mar-15Apr
Shanghai Secco
Metathesis
160
1Mar-15Apr
Formosa 1
RFCC
375
15Mar-15June
Tosoh
Cracker
270
15Mar-15Apr
Showa Denko
Cracker
350
15Mar-25Apr
Formosa
Metathesis
250
1Apr-15 May
JX Nippon
RFCC
90
GS Caltex
RFCC
250
1-31May
Indian Oil
Cracker
400
Apr
ZRCC
Cracker
600
Apr-15 May
Daqing Refinery
PP
300
Dec21-Jan21
Dalian Pc
PP
70
Formosa Ningbo
PP
170
Feb
Datang
PP
230
Feb
Shanghai Secco
PP
250
1Mar-15Apr
Indian Oil
PP
400
Apr
ZRCC
PP
600
Apr-15 May
PTT Phenol
Phenol
350
1-28 Feb
Formosa
Phenol
400
1Mar-15Apr
Mitsui Chiba
Phenol
250
Sept onwards
ZRCC
PO
280
Apr-15 May
Dianitrix
AN
120
1-28 Feb
Asahi Mizushima
AN
200
19Feb-15Apr
Asahi Mizushima
AN
100
Jan-now
Taekwang
AN
250
11Feb-11 Mar
Formosa
AN
280
15Feb-15 Mar
Shanghai Secco
AN
260
1Mar-15Apr
Tongsuh 2
AN
70
1-25 Apr
Tongsuh 3
AN
245
1-20 May
1Apr-1Jun
Nov5-Feb5
prices are trading at a $30-50/t discount to cfr China prices,
which may point to lower cfr China prices.
Non-integrated PP producers are suffering from negative
margins as the spread between propylene and polypropylene
remains narrow. Margins have been negative since April 2013.
Propylene supplies will be limited with PDH operational
problems in China and a peak turnaround season in northeast
Asia. Margins are expected to be weak for the foreseeable
future.
AN prices rose to $1,980-2,010/t, breaking the $2,000/t
mark. Low operational rates in the US and high propylene
prices in Europe have also prevented more cargoes from
coming to Asia. Producers are having their turnarounds this
month and supplies are expected to recover by second-half
Page 7 of 10
Argus DeWitt Propylene
Issue 14-7 | Wednesday 12 February 2014
Asia-pacific
Argus DeWitt Petrochemical Review
March. Feedstock prices for ammonia are also down on weaker
demand for industrial production. Demand remains weak in
China with its starting to return from the holiday. Demand
from the ABS sectors may improve as other co-feedstock costs,
styrene monomer and butadiene, are weak.
Phenol prices fell $1,370-1,400/t cfr China despite stagnant
benzene prices. Weaker propylene prices provided a small
relief to phenol producers. They are still mostly operating at
negative margins because of excess capacities. Japan’s Mitsui
will shut down its 250,000 t/yr phenol line permanently by
September to cope with the excess supplies.
Oxo alcohol domestic Chinese prices are lower to $1,3701,390/t, following propylene price movements. A number of
Chinese new units will be operational in the first half of 2014.
Tianjin Bohai’s 140,000 t/yr unit started up between late last
year and January of this year. Wison Energy’s 125,000 t/yr unit
is expected to start up later this month. PetroChina Sichuan’s
80,000 t/yr unit will be operational by March 2014, adding to
supplies.
Downtown Aquarium
Houston, Texas
March 25, 2014
In-depth analysis of the global petrochemical industry.
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Argus DeWitt Asian MTBE and
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4-5 March 2014
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Rapid changes in the gasoline market
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Conference Highlights
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Upcoming refining capacity and gasoline consumption growth in
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