Initial US ethylene settlements for August down by 1.25 cents/lb

(ICIS) -- Initial US ethylene settlements for August were agreed at 55.50 cents/lb (USD 1,224/tonne, EUR 857/tonne), down by 1.25 cents/lb from July, market sources said on Thursday.
The 2.2% reduction resulted from a drop in production costs last month, which offset an increase in average ethylene spot prices.

July ethylene settled at 56.75 cents/lb, as assessed by ICIS.The initial drop for August surprised some market participants, who had expected a smaller decline for the month. A larger drop was needed to keep US ethylene derivatives competitive in the export market, a source said.

US ethylene contracts usually settle at the beginning of the month for the previous month.
Spot ethylene for September traded on Thursday at 63.50 cents/lb, flat with a deal on Wednesday.
Major US ethylene producers include Chevron Phillips Chemical, ExxonMobil, INEOS, LyondellBasell and Shell Chemicals.

MRC

(ICIS) -- European butadiene (BD) and crude C4 (CC4) spot prices have registered sharp decreases over the past week as availability in the market lengthens while demand slows further, players said on Friday.

Domestic inland BD spot prices slid by EUR 50-75/tonne (USD 71-107/tonne) to trade at EUR 2,350-2,400/tonne FD (free delivered) NWE (northwest Europe), while export values also lost a further USD 50/tonne, leaving prices at USD 3,500-3,550/tonne FOB (free on board) according to data from ICIS. The CC4 spot factor also slipped to 1.45-1.48 times naphtha from the 1.65 recorded just three weeks ago.

Many players said that the length in the market had initially appeared over the traditionally slower summer holiday season, as although demand had dwindled, cracker margins remained strong making producers reluctant to cut back operating rates.

MRC

(ICIS) -- Asia's benzene and toluene prices are expected to slide from October on the back of increased supply after a turnaround season and slower demand from downstream sectors, traders and producers said on Friday.

Prices of benzene were steady on Friday morning at USD 1,150-1,155/tonne (EUR 805.00-808.50/tonne) FOB (free on board) Korea, while toluene prices were unchanged from Thursday at $1,130-1,140/tonne FOB Korea, according to ICIS data.

Benzene prices in Asia could soften from October when demand from the styrene monomer (SM) sector is expected to decline as the seasonal peak production period comes to an end, said traders.
Benzene supply, which is tight at present, is expected to mount from October following the end of turnarounds at GS Caltex's No 1 aromatics and JX Nippon Oil's Mizushima-based facilities, traders said.

MRC

(MRC) -- Long-run declining LDPE prices began growing unexpectedly for many Russian market players. Volatility of PE supplies, which caused these changes, may lead to further price increase, according to ICIS-MRC Price report.

In June on the back of excess LDPE supplies to the Russian market, LDPE prices gradually went down. Demand for finished films this summer did not meet market players' expectations. Last year record hot summer provided a significantly high consumption of finished films in many sectors, such as shrink films.

Low demand for LDPE, as a result of low demand for finished films, as well as an excess PE supplies in the Russian market in mid-August resulted in decrease of 158 LDPE prices to RUB 54.500-57.500/t, including VAT, CPT Moscow.

Scheduled shutdowns of Tomskneftechem in July-August and Ufaorgsyntez in late August resulted in reduction of LDPE excess in Russia. However, the main driver in the current price rise was ethylene shortage at Kazanorgsyntez which affected reduction of LDPE supplies to the domestic market in late August.

MRC

(MRC) -- PET granulate prices for September remain unchanged in the Russian market due to a weak demand amid oversaturated market, according to ICIS-MRC Price report. Despite quotations growth in Asia, Russian producers do not raise PET prices in the domestic market. The main reason is weak demand from PET converters.

In August ongoing slumping sales forced regional producers to produce to stock. According to market players, there is no use to rise granulate prices. Today PET prices of Russian production make RUB 59.000-62.000/t, including VAT, CPT Moscow. Increased feedstock prices in Asia also make traders thin margins. Prices of Asian polyethylene terephthalate make RUB 59.000-61.000/t, including VAT, CPT, Moscow.

According to market players, at the moment PET demand is weak amid oversaturated market. Further cutting of prices will not boost demand, but will just lead to financial losses. That is why many market players say about necessity to raise granulate prices - to ensure the minimum required level of profitability. According to MRC analysts, in early September growing TFA prices in Asia and Europe will force some Russian producers to increase PET prices around by RUB 1.000/t.

MRC