The European ethylene market is seen as increasingly balanced, following the length in previous months. With the contract price expected to settle in the coming week, attention is focused on discussions.
OLEFINS
The propylene market however is expected to remain tight as producers crack more of lighter feedstocks and with good demand from downstream polymers manufacturers.
POLYMERS
In the polystyrene market, buyers will try to minimize the price increase for June as they finalize their negotiations but PS sellers will have some leverage as imports have run dry this month.
Polypropylene-copolymer grades are seen tight in Europe and traders presently want to import material from Asia to meet demand. European SBR is expected to see a drop in supply in the coming weeks as several producers undergo maintenance and imports remain uncompetitive.
AROMATICS
Good production levels in the European styrene market, with additional imports from the US, are expected to keep the styrene market balanced this week. The July styrene contract price is expected to fall as spot prices edged lower during the month.
The benzene market saw an unexpected rally in the prompt end of the market on Thursday, based on tight availability.
However, July and August benzene pricing remained relatively stable and while higher pricing is expected at the front end of the market, the overall backwardation is expected to undo the jump as the market moves through July.
INTERMEDIATES AND OTHERS
The European methanol market is focused on settling the third quarter contract price ahead of July.
Despite softening spot prices in recent days, the rally seen in mid-June has led some in the market to expect an increase in contract prices for the third quarter. Others, however, have questioned whether the contract price will rise, as the tightness that led to spot prices climbing is expected by many in the market to ease in the third quarter.
The ethers market is expected to remain muted on balanced demand and supply fundamentals. That said, it is likely to take direction from the recent weakness in feedstock methanol.