Polyester input: MEG
Mono ethylene glycol prices eased early this week and rebounded slightly later but posted fall week on week. Transactions were moderate driven by crude oil and commodity futures and extended the downtrend since December 2018 amid an economic slowdown in key market China. Downstream polyester sales were slow, dampening prices further. Meanwhile, inventories in China fell 4% to 675 kilo ton due to delayed cargo arrival. In Europe, market players are expecting a stable market in Q1 2019, and were ready to brace more pressure from imports coming around February-March. Wider concerns surrounding weaker crude oil levels, the US-China trade tensions and an overall gloomy global economic conditions remain the backdrop to most chemicals markets. Contract discussions were paused at end December and a dual settlement alongside January talks were on the cards. No reports were available from US MEG market at the moment.
Asian spot benchmark edged down US$8 on the week, with CFR China at US$620-625 a ton and also CFR South East Asia. In China, offers for nearby-month shipments were at US$625 a ton and counter offers were at US$625 a ton with discussions at US$625 a ton or slightly higher. In Europe, bulk spot prices were assessed at Euro680-700 a ton CIF NWE while truck spot prices were in the range of Euro720-770 a ton FCA NWE. In US, November contracts were assessed at US cents 36.5-42.5 per pound FOB.
Polyester input: PTA
Purified terephthalic acid markets in Asia were moderate as downstream polyester sales remained seasonally weak. In China, PTA futures dominant contract were down moving in line with crude oil market, and was under strong fluctuation. Upstream paraxylene values also weakened earlier but rebounded later to post weekly rise. Going ahead, prices are likely to rise easily while have difficulty to go down in a short term at least in the coming week). However, with Spring Festival drawing closer and demand weakening, margins of polyester sector will be bled soon in line with a rise in prices of raw materials. No reports were available from European markets at the time of finalising this report. In the US, December contracts were revised down tracking lower settlement of paraxylene contract prices. Supply improved in the spot market, on the back of the seasonal downturn in downstream markets.
Asian PTA markers, the CFR China fell US$20 on the week to US$785-787 a ton, while offers from Taiwan/Korea were down US$40 at US$800-820 a ton. In China, offers for bonded goods were in the range of US$800-820 a ton. Yisheng Petrochemical’s daily prices were unchanged at US$820 a ton, while that of Hengli Petrochemical’s at US$800 a ton. In Europe, the December contract price was at Euro770-804 a ton FD NWE. In the US, December contracts were revised to US cents 51.05 per pound DEL USG (US$1,125 a ton), down US cents 3.35 from the previous month.
Caprolactam
Caprolactam prices in Asia were pressured by rising supply amid high runs and upcoming plant expansions in China. Feedstock benzene market also softened amid poor demand. Thus, spot caprolactam values moved sideways on weak note. In China, both Sinopec and Fibrant nominated their January contract price lower from December, implying weak demand ahead. Demand this week was stable as run rates at polymerization units rose slightly while yarn makers were running at stable rate. Going ahead, as the benzene market took a mild rally late in the week, and demand picked up a bit, the caprolactam market is likely to go stable in the coming week. In Europe, December caprolactam contract talks finished at triple-digit decreases due to the sharp fall in benzene price. January talks have not begun, following another price decrease in benzene market. In the US, cyclohexane January contract price fell following the reduction in benzene settlement.
Asian caprolactam prices eased by US$10-20 on the week, with SE and FE Asia markers at US$1,540-1,580 a ton. In China, spot prices for liquid goods rolled over at 12,300-12,500 Yuan a ton (US$1,795-1,820 a ton) while flake goods were at 12,700-13,200 Yuan a ton (US$1,850-1,925 a ton). Sinopec lowered its January contract nominations for liquid goods to 12,800 Yuan a ton (US$1,870 a ton), while Fibrant nominated January at 13,000 Yuan a ton (US$1,895 a ton). In Europe, December contracts were assessed at a decrease of Euro100 at the lower end of the range and Euro110 at the higher, bringing prices to Euro2,156-2,292 a ton FD NWE. In US, December cyclohexane settled at US cents 212 per gallon FOB US Gulf, down US cents 44 compared to the previous month.
Acrylic input: Acrylonitrile
Acrylonitrile prices did not move across regions this week as weak global demand and growing Asian supply continued to weigh down markets. In China, domestic prices moved stable to higher and offers at Lianyungang port rolled over. With the Spring Festival approaching, prices mainly stood firm, and sellers arranged delivery of goods. Markets are expected to remain stable in the near term. Demand was stable as acrylamide and ABS market. Acrylic yarn makers ran at 62% capacity as they continued to trim production. In Europe, no report was available from acrylonitrile markets due to ongoing holidays and absence of players. In the US, spot export acrylonitrile continued to face downward pressure amid lower feedstock costs and weak global demand. Despite lower prices, domestic demand was healthy and inventories remained constrained amid expectations that global demand will rise. Meanwhile, formula-based December domestic and export acrylonitrile contracts fell from November on lower feedstock and average spot export prices.
Asian acrylonitrile Far East CFR marker declined US$50 to US$1,549-1,551 a ton while CFR China was steady at US$1,550-1,650 a ton. In China, self-lifting values at Lianyungang port gained US$10 at US$1,700-1,715 a ton. In China, Jiangsu Sailboat posted offers at 11,800 Yuan a ton (US$1,715 a ton, up US$25) for the week. Prices in India were stable at US$1,565-1,600 a ton CFR. In Europe, spot prices rolled over at US$1,268-1,272 a ton CIF Mediterranean. In US, spot export prices declined US$50 to US$1,470-1,480 a ton FOB USG. Formula-based December domestic and export acrylonitrile contracts decreased to US cents 60.42-64.42 per pound.
