Market Insights – Week of June 22, 2015

June 22, 2015 • Posted in Market Insights

 Market Insights – Week of June 22, 2015

Energy / Economy Overview

  • Oil prices remain relatively unchanged despite high global production rates
  • Rig counts continue to fall in the USA
  • Impact of lifting sanctions on Iran is uncertain due to lack of intelligence on Iranian production capacity
  • IHS NA energy price outlook remains bearish
  • North American petrochemical producers continue to focus on gas-based feedstocks resulting in few investment plans based on heavy feedstocks
  • This will result in huge growth in PE production with little relief for materials in tight domestic supply such as PP and ABS


IHS Intel – Ethylene / Polyethylene

  • June ethylene NT contract price has not been settled

May ethylene NT contract marker price settled at 34.5 cpp

June NT price is now forecasted to drop 0.5 cpp to 34 cpp

Williams Geismar is finally operating at full expanded capacity and the Evangeline pipeline is operating at full capacity

Return to normal supply in LA will drop TX ethylene prices as LA prices return to a 1-2 cpp premium over TX

NT contract prices are expected to range from 34 to 37 cpp over the balance of 2015 as there will be little change in cash costs

  • May PE contract prices settled up 5 cpp
  • Major producers have announced a 5 cpp increase eff. July 1
  • LLD & HD export prices are reportedly off 2 cpp last week on improved supply
  • PE prices in China moved up by 0.5 to 1 cpp as buyers restocked to take advantage of recent lower prices
  • Prospects for the announced July 1 North American PE increase could be impacted by developments in export markets through the month of June

IHS Intel – Propylene / Polypropylene

  • June PGP settled down 2 cpp from 42 to 40 cpp
  • July and August PGP contract prices are now forecast at 39.0 cpp, down 1.0 cpp from June contract prices
  • Some converters are not able to take advantage of their contract prices due to lack of product availability and are having to pay higher prices on the spot market to keep their plants running
  • The PP forecast in the coming months will also be affected by slight downward revisions to the monomer forecast

IHS Intel – Styrene / Polystyrene

  • Benzene spot prices moved up to $2.79 – $2.80/USG last week
  • Styrene monomer producers in Louisiana will see relief in the next few weeks as Williams Geismar is reportedly finally running at full expanded capacity and the Evangeline pipeline has resumed operations
  • The increased supply of ethylene following these restarts will allow styrene producers to return to full production rates
  • LBI’s propylene oxide / styrene monomer unit in Channelview, TX remains offline for planned maintenance
  • Cosmar’s Carville, LA styrene unit also remains off line
  • Both of these unite should resume operations in the next few weeks
  • With the styrene monomer industry running at full capacity, PS prices will see downward pressure
  • Current IHS forecast calls for HIPS to drop by 8.74 cpp between now and December 2015

US High-Impact PS Pricing Trend Chart

IHS Intel – ABS

  • NA ABS demand remains healthy with automotive and extrusion markets doing well but Electronics and Appliance slowing
  • Styrolution is up 4 cpp eff. June 1 driven by 6 cpp increase in feedstock costs since February
  • Sabic and Trinseo are up 5 cpp
  • Acrylonitrile prices dropped 2 cpp last week as PGP settled down
  • Butadiene increased 5 cpp on US tightness and higher Asian prices
  • US benzene spot prices moved up to $2.79 – $2.80/USG last week but the impact on styrene pricing is likely to be offset by improved supply

North America 2014 ABS Supply and Demand Chart
Global ETPs Update

  • PC – June prices for large-volume buyers are flat as production costs fell. In Asia prices softened slightly on seasonally slow demand.
  • PA – Nylon 6 price increase to large buyers has lost momentum as soft June benzene prices dropped costs. Nylon 6,6 prices were essentially flat in North America and Europe but saw a decline in Asia.
  • POM – Acetal continues to see reasonable growth in demand. Pricing is flat. Celanese announced a global price increase on specialty grades of Hostaform® and Celcon®. In Asia, price remains flat for all grades and demand remains weak from all downstream sectors

Stay informed with industry trends and insights.

Stay informed with industry trends and insights.
This field is for validation purposes and should be left unchanged.