Polyester input: MEG
Mono ethylene glycol prices slumped by nearly 7% this week in Asian markets after three consecutive weeks of gains, as downstream polyester sales slowed down, amid the US-China trade spat. Buying appetite was tapered as H1 September obligations were largely completed. Inventories in east China decreased 13% to 480 kilo ton from the previous week due to fewer import cargo arrivals. MEG spot prices declined US$6 on the week to US$911-916 a ton CFR China and to US$900-902 a ton CFR South East Asia. MEGlobal announced its October Asian contract at US$1,120 a ton CFR Asia, up US$10 from September, while SABIC raised its October nomination similarly to US$1,120 a ton CFR.
In Europe, the September MEG contract was yet to be fully confirmed, while spot truck prices narrowed slightly this week amid slightly muted activity. Demand from the antifreeze sector was healthy ahead of the peak winter season. Spot bulk activity was thin on the ground but deemed fairly quiet among players. Truck prices were between Euro 885 and 910 a ton FCA NEW, while those for fibre grade were in the range of Euro 910-915 a ton FCA NWE. Spot bulk offers were heard at Euro 880-890 a ton CIF NWE.
In the US, MEG supply and demand fundamentals were balanced and spot prices were holding steady from August in the low-to-mid US cents 40 per pound. Meanwhile, Shell sought a price increase effective from 1 October. In the US, Shell was seeking a price increase of US cent 1 per pound from October, while August contracts were at US cents 41.5-47.5 per pound FOB.
Polyester input: PTA
Purified terephthalic acid spot moderated in Asian market, while Futures saw a steep decline amid bearish sentiment. PTA futures for November 2018 contract and January 2019 contract was down as market sentiment turned bearish following recent slowdown in polyester markets. Asian PTA markers moderated US$12 on the week with CFR China at US$1,053-1,055 a ton and offer from Taiwan/Korea at US$1,063-1,065 a ton. In India, prices were at US$990 a ton CIF. In China, the offer for bonded goods fell to US$1,148-1,168 a ton.
In Europe, the PTA market was bullish amid tight supply and spike in paraxylene prices has led to talk of significant price jumps in conversion fee, which is based on cost plus the fee. The August PTA contract price was stable at Euro 763-797 a ton FD NWE.
In the US, PTA makers were preparing for Hurricane Florence as operation were likely to be affected. PTA supply in North America was extremely tight due to the BP allocation as well as an unplanned outage at Alpek's PTA facility in Altamira due to a fire and is expected to be back up by end of September. The paraxylene price increases prompted talk of increases in the September PTA contract of as much as US cents 6.50-7 per pound.
Nylon input: Caprolactam
Caprolactam markets were stable to up in Asian although feedstock prices were on a weak note and downstream demand passable. Sustained tight supply has been supporting caprolactam prices in the region. In China, mainstream prices for liquid goods were hiked on the week, with high-end values for small parcels and low-end ones for large parcels. Prices for solid goods were also higher. Asian markers remained flat, with SE and FE Asia at US$2,130-2,160 a ton. In China, spot prices for liquid goods were jumped to 17,850-18,050 Yuan a ton (US$2,610-2,640 a ton, up US$30). Japan's Ube Industries settled its September contract price at US$2,170 a ton CFR NE Asia, US$15 higher than August.
In Europe, negotiations for September contracts were yet to begin with mixed expectations for the month as feedstock benzene contract fell for September. Sellers, however, opined combination of strong demand and increasing tightness would be the point but also under consideration was the decline in upstream cyclohexane contract for the month. August contracts settled at Euro2,272-2,433 a ton FD NWE down Euro10. In the US, September cyclohexane contract settled at US cents 306 per gallon FOB US Gulf.
Acrylic input: Acrylonitrile
Acrylonitrile prices in Asian markets remained unchanged across regions as supply tightness continued to support firmer pricing. For the same reason prices have been on an uptrend globally. Asian marker rolled over this week with Far East CFR at US$2,229-2,231 a ton, while CFR China at US$2,200-2,230 a ton. In China, self-lifting values at Lianyungang port eased US$20 to US$2,765-2,810 a ton. Sinopec Anqing hiked its spot and contract price by US$29 to 19,000 yuan a ton (US$2,780 a ton) ex-works, effective from 10 September.
In Europe, the contract price has steadily increased due to limited imports and planned turnaround at a plant in September. These also were the factors contributing to a tight market. Spot prices rolled over at US$2,048-2,052 a ton CIF Mediterranean.
In the US, spot acrylonitrile narrowed on the lower end. Reports indicated that there was absolutely no product available, with little to no material being traded in the spot export market as producers sought to cover contract customers first. Supply remained tight and inventories low, maintaining upward pressure on the market. Spot export prices were unchanged at US$2,110-2,130 a ton FOB USG, while domestic contracts were at US cents 81.07-85.07 per pound (US$1,787-1,875 a ton) DEL USG.
