China raises PP exports on tight supplies overseas
Chinese producers and trading firms increased exports of polypropylene (PP) homopolymer products after the 11-17 February lunar new year holiday because of a severe shortage of supplies in the western hemisphere.
Some market participants expect China's PP exports of February-March loading cargoes to rise to 150,000-200,000t from around 30,000 t/month usually. The cargoes are mainly heading towards Turkey, Europe, south Asia and South America.
PP raffia export offers have surged to $1,350-1,360/t fob China, compared with $1,000-1,050/t fob China in late January.
Around 6.9mn t/yr of PP capacity in the US has been reduced or completely shut down because of a winter storm in Texas. This includes units at LyondellBasell, Ineos Olefins and Polymers, ExxonMobil, Formosa Plastics, Flint Hills Resources and Total Petrochemicals.
Major crackers in Saudi Arabia — the production hub for polymers in the Middle East — are going through their major February-April turnaround season, reducing PP supplies to Turkey, Europe and India.
The tightness in overseas markets has opened up the arbitrage window for shipments from China. Some Chinese producers and trading firms have been actively working on exporting cargoes. A major Chinese state-owned producer has secured a deal to export more than 10,000t of PP raffia. The buyer and destination are unclear.
PP raffia is trading at 9,300-9,400 yuan/t ex-China in east China, or $1,185-1,198/t on an import parity basis, today. Margins for export deals are currently higher than for domestic trades.
Related news posts
Brightmark to build Georgia pyrolysis plant
Brightmark to build Georgia pyrolysis plant
Houston, 24 April (Argus) — Chemical recycler Brightmark plans to build a 400,00t/yr pyrolysis plant in Thomaston, Georgia, two years after the company terminated its plan to build a similar plant in a nearby Georgia community. Pyrolysis is a form of chemical recycling that breaks down used plastic into pyrolysis oil, which can then be reprocessed into new plastics at virgin polymers facilities. The 2.5mn ft² plant will cost $950mn, including infrastructure such as roads and rail access, Brightmark said. A previous plan to build a chemical recycling facility in Macon, Georgia, ended in 2022 after Mayor Lester Miller withdrew his support, citing "long-term safety concerns" from Brightmark's "unproven process". The company finished construction of its first chemical recycling plant in Ashley, Indiana, in 2022. Brightmark said it has recycled 2,000t of plastic waste so far at its Indiana plant, well behind its anticipated volume of 100,000 t/yr. By Zach Kluver Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
TUI Cruises receives methanol-ready ship
TUI Cruises receives methanol-ready ship
New York, 18 April (Argus) — Cruise ship company TUI Cruises took delivery of a methanol-ready cruise ship which will start operations at the end of June. Methanol-ready vessels allow ship owners to easily retrofit their vessels to burning methanol in the future. The 7,900t deadweight Mein Schiff 7 will operate in the North Sea, the Baltic Sea, along the European Atlantic coast and in the Mediterranean and run on marine gasoil (MGO). It was built by Finland's Meyer Turku shipyard. In January, TUI Cruises signed a memorandum of understanding with trading company Mabanaft for future supply of green methanol. Mabanaft would cover TUI's methanol needs in northern Germany, and gradually add other European locations. Grey methanol was pegged at $717/t MGO equivalent and biomethanol at $2,279/t MGOe average from 1-18 April in Amsterdam-Rotterdam-Antwerp. About 0.9 times and 2.9 times, respectively, the price of MGO, Argus assessments showed. TUI Cruises is a joint venture between the German tourism company TUI AG and US-based cruise ship company Royal Caribbean. By Stefka Wechsler Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Nova Chemicals preps for potential Canadian rail strike
Nova Chemicals preps for potential Canadian rail strike
Houston, 18 April (Argus) — Nova Chemicals is taking certain precautions such as making early shipments and forward placement of inventory at US storage locations to mitigate against potential polyethylene (PE) supply disruptions caused by a possible Canadian rail strike that could take place as early as 22 May, the company said in a letter to customers. The Canadian National (CN) and Canadian Pacific Kansas City (CPKC) railroads are (currently negotiating contracts)[https://direct.argusmedia.com/newsandanalysis/article/2553764] with the Teamsters Canada Rail Conference, which represents 9,300 employees across both railroads. The earliest a strike could begin is 12:01am ET on 22 May, but any work stoppage at either railroad could cause widespread disruption to rail traffic across Canada. "NOVA Chemicals utilizes CN and CPKC to serve our manufacturing facilities and delivery polyethylene products and co-products to our customers," the company said in a 15 April letter to customers. "A labor strike within the Canadian railroad industry will result in disruptions and delays, impacting the timely delivery of these products." Where practical, the company said it will ship product early prior to any strike, it said in the letter. It will also attempt to place some inventory at US off-site storage locations before the strike takes place, which will allow it to continue to serve US customers during a strike. Additionally, Nova said it is maintaining a direct line of communication with rail officials, and creating contingency plans for raw materials supply. "Despite our best efforts to mitigate these challenges, there may be instances where shipments are delayed or rerouted due to the strike action," the letter says. If a strike takes place, market participants said it would likely last around 3-4 days, but could cause delays to shipments for up to two weeks. However, the overall US/Canada market is well-supplied, so any shipment delays should not create significant tightness in the market, sources said. Union employees at each railroad will vote electronically from 8 April to 1 May on whether to approve a strike. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
US spot PGP falls to lowest since November
US spot PGP falls to lowest since November
Houston, 17 April (Argus) — US prompt-month spot polymer-grade propylene (PGP) fell this week to the lowest in nearly five months on weak domestic demand for some smaller volume propylene derivatives, especially acrylonitrile (ACN) and propylene oxide (PO). US PGP traded on Tuesday at 41.5¢/lb, down by 30pc since 5 March and the lowest price since late November. US PGP's pricing in recent years has mostly been driven by supply changes, but market participants believe that some of the price drop since early March stems from weakness in PGP's smaller demand sources like ACN and PO. ACN consumes about 7pc of US propylene, declining from 10pc over the last six years, and PO accounts for around 11pc of US demand for propylene. US demand remains weak for polypropylene (PP), which accounts for about half of domestic PGP demand, but has increased over the last few weeks, with operating rates improving. Rising PGP demand has been offset by falling production of smaller volume derivatives like ACN and PO, largely driven by elevated PGP spot prices in the first quarter that narrowed margins. Cornerstone's 257,000 metric tonne (t)/yr ACN unit in Waggaman, Louisiana, has been down on an extended turnaround, according to market sources. That unit comprises 16pc of the US ACN capacity, according to Argus data. Another producer told Argus that ACN is being produced "to order," as demand has not been steady, saying "these are tough times" for ACN. A PO producer in Texas began a planned turnaround this month that is expected to last until mid-May, reducing demand for US propylene. The turnaround has shut 20pc of US PO capacity, according to Argus data. By Michael Camarda Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Business intelligence reports
Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.
Learn more