Polyester feedstock cost eases opening Q2 2018
As global markets enter the second quarter of 2018, polyester feedstock – ethylene and paraxylene cost showed signs of easing which may trickle down in form of lower prices of polyester.
Ethylene climbs down from multi months high
In the first week of April 2018, ethylene prices plunged in Asian markets on falling downstream polymer margins prompting them to reduce operating rates which in turn cut demand for ethylene. This situation may continue denting demand for some time. However, the fall was limited by the upcoming heavy steam cracker turnarounds in the region. Asian ethylene spot fell marker CFR NE fell US$40 a ton on the week while SE CFR moderated US$25 a ton.
In Europe, ethylene market was long despite some cracker constraints and concentration derivative output issues in ARA region. While there were some spring cracker turnarounds planned but their impact will be lighter than expected. Spot prices just managed to inch up Euro 2 a ton FOB FD and US$3 a ton down in terms of CIF. US spot ethylene prices were volatile, firming early in the week on increasing demand, and later sobering amid concerns about proposed Chinese tariffs.
Asian paraxylene guides global pricing
Paraxylene market was generally thin in Asia during the first week of April while sources pointed towards the likelihood of April CP negotiations failing to settle, with bids and offers ranging wide apart. March contract were also pending. New cargoes from Rabigh Refining and Petrochemical, are expected to land in China at end-April or early-May which will weigh on prices in coming weeks. As higher seasonal demand approaches from polyester markets which is expected to be strong during May and June. Spot paraxylene prices inched up US$3 a ton CFR Taiwan/China.
In Europe, paraxylene market tracked Asian numbers where sentiment appear slowly improving. Spot gained US$4 a ton on the week. In US, paraxylene spot export prices rose slightly, tracking strengthened buying sentiment in Asia while domestic demand remained somewhat muted amid reduced PET capacity. The US Gulf spot paraxylene prices were up US$5 a ton on the week, based on bids and offers heard in the market.
