US BD producer nominates up 2 cts for Sep, others see flat
JANGAN SIA-SIAKAN KESULITANMU
16 years ago
Showing posts with label Market and Supply Review. Show all posts
Showing posts with label Market and Supply Review. Show all posts
Saturday, August 21, 2010
20 August 2010 21:16 [Source: ICIS news]
US BD contracts in August settled at 94.00 cents/lb, unchanged from July.
“We are expecting a drop in BD prices since Asian prices are very low at this point in comparison to the US price. Worst case scenario will be to have a rollover,” astyrene butadiene rubber (SBR) producer said.
BD prices in Asia, a key supplier of BD to the US, have dropped by around 10% in the past four weeks, pressured by weak buying interest and ample supply.
BD in northeast Asia was assessed this week at $1,600-1,620/tonne CFR NE Asia (cost and freight Northeast Asia), down from an average of $1,800/tonne around mid-July.
One market participant also pointed to a softening in Europe, where BD prices have dropped by 7% in recent weeks amid weaker export demand and improved supply.
“Not a lot of factors supporting an increase so rollover may be best case,” the source said, referring to the US contract.
Spot prices in Europe were assessed this week at $1,870-1,940/tonne FOB Rdam (free on board Rotterdam), down from $2,000-2,100/tonne in the week ended 23 July.
Market participants have also pointed to spot prices in the US, saying a parity between spot and contract material was indicative of steady pricing moving forward.
BD spot prices in the US were assessed this week at 92-96 cents/lb, unchanged from a week earlier, but down from 95.00-97.00 cents/lb four weeks ago.
The outcome of the September BD settlement in the US will depend on nominations from three other suppliers, which are expected to step out with their initiatives in the coming days.
US BD usually settles at the lowest price nominated by the four main US producers.
Two of those producers are on allocation at 85% but buyers said supply from other sources, mostly imports, was filling the gap in the market.
BD contracts in the US rose by 49% in the first half of 2010 until a flat settlement in July capped the uptrend. The increase was due to tight supply and firm demand for the product.
US BD producers include ExxonMobil, INEOS, LyondellBasell, Shell and TPC Group. Buyers include Invista, International Specialty Products (ISP), Lanxess, Michelin and Negromex.
Tuesday, July 27, 2010
Less product, higher prices for Europe plasticiser buyers
26 July 2010 14:39 [Source: ICIS news]
By Libby George
LONDON (ICIS news)--European plasticiser buyers hoping for a summer respite to high prices and prevailing market tightness are now bracing for the opposite, market sources said on Monday. After last week’s force majeure declaration from BASF, market supply is set to contract even further, and all varieties of plasticiser are likely to get more expensive.
“The market is so short that if one supplier is out, the other suppliers cannot replace them,” one plasticiser buyer said. “Some companies will be very much in trouble.”
Dioctyl phthalate (DOP), di-isononyl phthalate (DINP) and other plasticisers are primarily to make polyvinyl chloride (PVC) soft and flexible for end uses ranging from pipes and cables to flooring, medical devices and toys.
This year – marked by low stocks, consolidated DOP production and a series of unplanned production outages – had already been tough for buyers, nearly all of whom have been on allocation for several months.
But after the 21 July BASF force majeure, end-use PVC producers are even more concerned than they were before about getting the plasticisers they need to produce – and passing on enough of the rising costs to maintain a decent margin.
“Every month we are fighting to find material,” said another buyer. “I’ve never faced such a difficult situation in the plasticiser market.”
BASF made the declaration on DINP and three other varieties of plasticisers following an “unforeseeable technical defect” in its iso-nonanol (INA) plant in Ludwigshafen, Germany. The seller said it hoped to have the plant up and running in 14 days.
The outage could hardly come at a worse time for the market. For several months, demand has outstripped supply at such a fast clip that even sellers have expressed frustration with their inability to produce more. Meanwhile, a coming maintenance season – nearly every seller has a turnaround ranging from one to four weeks at some point in the August-October period – has forced them to hold back product from the market.
“A lot of customers could overflow us with inquiries, because in their need, they will take each and every kilo,” said one DOP seller. “I have not a single kilo for another customer.”
It has gotten so bad that some PVC compound sellers have not been able to meet their own commitments, and have sought to purchase either the end product, or feedstock plasticisers, from other sellers. Thus far, none contacted said they could spare either.
Imported material from Asia has served as a respite for some buyers, but it has come at a high price - €1,900-2,000/tonne ($2,451-2,580/tonne) for DINP, according to market sources. But traders said it is small amounts - not much more than 400 tonnes in total - and that a coming maintenance turnaround at a Taiwanese plant will further hinder imports.
Imported material “is definitely not disturbing the market and it is definitely not meeting demand”, one trader said.
While all market players had been hoping for the situation to balance out during the usually quiet summer period, the continual demands, and the BASF troubles, have dashed those hopes.
“It will be even worse than before…I’m afraid that prices will jump further,” one buyer said. “Just after the force majeure coming from BASF, [sellers] started talking about price increases.”
While prices were stable the week ended 23 July, it is likely the calm before the storm. Sellers are discussing hikes of €40-70/tonne for DOP, and potentially twice as much for DINP.
Meanwhile, prices for both products have already skyrocketed since the beginning of the year; both have climbed 66% above the average levels of January to €1,650-1,700/tonne FD (free delivered) NWE (northwest Europe) for DINP and to €1,525-1,575/tonne FD NWE for DOP, according to data from ICIS.
During the same period, PVC prices have risen roughly 15% for both spot and contract, to €810-840/tonne FD NWE for spot, with gross contract prices in the major German market at €1,040-1,070/tonne FD as of 23 July.
Plasticiser sellers, which in addition to BASF include Arkema, ExxonMobile, Oxeno, Oxea and Polynt, are quick to note that market tightness – and not speculation – has dictated increases. Additionally, every supplier has also examined postponing or rescheduling planned turnarounds, but in each case, they determined it was not possible.
“We have announced it since last year,” said one seller that said it found it “virtually impossible” to change its outage. “We cannot delay it or find another date.”
But such assurances are little comfort to buyers, who are bracing for what the prices will be – if they can even get material.
“Unfortunately for us, we are not as good at increasing prices as plasticiser producers,” one buyer said. “We lose margin every month. That’s really the problem.”
Quoted from www.ICIS.com
($1 = €0.77)
For more on DINP, DOP or PVC visit ICIS chemical intelligenceFor more on BASF, Arkema, Oxeno, Oxea and Polynt visit ICIS company intelligence
Please visit the complete ICIS plants and projects database To discuss issues facing the chemical industry go to ICIS connect
Sunday, July 25, 2010
Study questions long-only strategies in oil markets
As the chart above from Petromatrix shows, total US stocks of crude, gasoline, distillate and jet kero this year (red line) remain very over-supplied in the short term, by comparison with previous years. A major reason for this is the move by pension funds to adopt long-only positions in the commodity future markets, in the belief that crude markets are fundamentally tight.
However, this week the Financial Times summarises a timely new study of commodity markets, by Prof Joelle Miffre of Edhec Business School. This argues that investors need instead to understand the difference between:
o Backwardation, "when commodity producers are more prone to hedge than commodity consumers", and the future price is lower than today's
o Contango, "when commodity consumers outnumber commodity producers, leading to excess demand", and the future price is above the current value
They recommend that "to earn a positive risk premium, investors should take long positions in backwardated markets and short positions in contangoed markets".
The team's research suggests this strategy would have earned the investor a commodity risk premium of 12% a year between 1992-2008. Whereas the long-only strategies currently followed by pension funds earned only 2% a year. Edhec therefore concludes that "passive long-only strategies as advocated by traditional indexers perform less well".
Saturday, July 24, 2010
Mideast naphtha heads for US, helps alleviate Asia glut
23 July 2010 08:22 [Source: ICIS news]
(Adds details, traders comments)By Felicia Loo
SINGAPORE (ICIS news)--Around 300,000-500,000 tonnes of Middle East naphtha were booked to head to the United States next month, a move that would help alleviate the glut in Asia, traders said on Friday.Much of the fixtures were on provisional bookings, but they were likely to be confirmed in the next few days, they said.
“The arbitrage to the
Asian naphtha prices bounced higher on such arbitrage opportunities to offload excess supply, as demand in this region remained tepid, traders said.
The price spread between first half September and October contracts narrowed to a contango of $6.50/tonne from a contango of around $8 earlier in the week, while the naphtha crack spread against Brent crude futures ended at a 12-session high of $76.70/tonne on Thursday’s close, ICIS data showed.
“The Asian market has been greatly hit by
The company had temporarily refrained from making spot naphtha purchases, following a cracker outage in Mailiao in early July, and it had even requested defer the deliveries of some term naphtha supply from August to December.
The market welcomed the diversion of Middle East supply to the
On signs of a glut, onshore inventories of naphtha and gasoline in Singapore rose 591,000 barrels in the week ended 21 July to an eleventh-week high of 11.530 million barrels, according to Reuters quoting data from International Enterprise.
But, on the other hand, shrinking petrochemical margins weighed on the market, with ethylene prices tumbling to $830-850/tonne CFR NE Asia this week, from $900-940/tonne a month ago and this squeezed the profitability, traders said.
“Fundamentally, nothing’s changed. The market is long on supply and worst, petrochemical margins are falling,” said a trader.
At naphtha prices hobbling near $660/tonne, the margins were in theory no longer feasible, as cracker operators typically require an ethylene-naphtha spread of at least $250/tonne to ensure profitability, traders said.
“At the rate things are going, cracker operators may have to consider curbing runs,” said one trader.
To discuss issues facing the chemical industry go to ICIS connect
By: Felicia Loo
< previous article(Iran’s Arya Sasol shuts down LDPE plant on technical issues)
quoted from ICIS News
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US benzene exports to Europe could balance Gulf supply
23 July 2010 20:44 [Source: ICIS news]
By Ryan HickmanHOUSTON (ICIS news)--Up to 20,000 tonnes of US Gulf benzene is headed to the European market in response to production issues, sources said on Friday, potentially evening out the length in the US that has suppressed prices this month.
An outage at a major European production facility opened the arbitrage opportunity in the Atlantic basin and jolted prices upward in both regions on 21 July.
"That's an easy prey for the trade," a US source said, referring to traders looking to capitalise on volatility.
A source said that 15,000-20,000 tonnes of benzene fixtures were secured for the European market.
Other US market players generally agreed with the amount of exports, although sources in Europe had estimated up to 30,000 tonnes might be coming into the market.
Meanwhile, a US Gulf aromatics trader said that 15,000-20,000 tonnes seemed like a large amount and could include some styrene.
News that Dow Chemical's benzene output at Terneuzen in the Netherlands could be shut down prompted a 4-cent jump in July spot benzene prices in the US on Wednesday.
The Dow plant, which has a capacity of 915,000 tonnes/year of benzene and 500,000 tonnes of styrene, will have its aromatics unit down for three weeks, the company confirmed.
A source said export volumes out of the US Gulf could provide "a little bit of breathing room" amid full inventories, since Asian imports came into the region last month.
However, a source said that more benzene imports were scheduled to arrive in the US Gulf for late July and early August. Four vessels were fixed with only one without a buyer, the source said.
Material was heard to be coming not only from Asia but from the Middle East and South America, according to the source.
The benzene overhang had kept spot prices mired in a range in the high-$2.60s/gal for most of the month, which is more than 10 cents under the US July contract.
More material coming would suggest further downward pressure, but a source said with the exiting exports, supply in the market could come into balance next month.
"By pulling some stuff out to go to Europe, it might make some room for everything else where there might not have been room before," a US source said.
August spot prices in the Gulf remained at a 2-4 cent/gal contango to July values, which were up and straddling $2.70/gal on energy gains and worries about Tropical Storm Bonnie.
Spot levels were talked steady on Friday at $2.68-2.72/gal FOB (free on board) July, as players remained tentative in making moves with inventory, storm and pricing uncertainty abundant.
Major US benzene producers include BP, ExxonMobil, Flint Hills Resources, LyondellBasell, Shell, Sunoco and Total.
Additional reporting by Truong Mellor
For more on Dow's Terneuzen plant, visit ICIS plants and projects
For more on benzene visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connectPaul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
quoted from ICIS news.
Thursday, January 28, 2010
Toyota Announces US Sales Freeze
Japanese car giant Toyota has said it will suspend US sales of eight models of cars, including its top selling Camry, amid a massive safety recall.
The unprecedented move comes a week after the company announced a recall of 2.3 million cars to fix potentially faulty accelerator pedals.
The recall was Toyota's second major alert in four months in the US, its biggest market.
The halt in sales announced on Tuesday means the world's number one carmaker will also freeze production on some models at its plants in the US and Canada.
The company has said it is also considering whether it needs to announce a recall on cars sold in Europe, where the same parts are used in millions of models already sold.
The problem could lead to accelerator pedals sticking in the depressed position, causing acceleration without warning.
| Toyota recall: US models affected |
 Camry – model for years 2007 to present RAV4 - 2009-2010 model Corolla – 2009-2010 model Matrix - 2009-2010 model Sequoia - 2008-2010 model Tundra - 2007-2010 model Avalon - 2005-2010 model Highlander – 2010 model |
It could also undermine its recovery from plunging automotive sales around the world caused by the financial crisis.
The automaker's shares fell 4.3 per cent in Tokyo trade Wednesday following the sales suspension announcement.
Toyota has already forecast a $3.9bn operating loss for the year to March, with a return to profit not expected until well into 2011 at the earliest.
Annual combined North American sales of the eight cars involved in the sales suspension and recall amount to more than one million units.
Bob Carter, Toyota's US vice president, said the company was taking the measures needed to ensure safety and restore confidence among Toyota customers.
"This action is necessary until a remedy is finalised," he said in a statement.
"We're making every effort to address this situation for our customers as quickly as possible."
Wednesday, January 27, 2010
Oil Drops Towards $74 on China Banks; Eyes Inventories
| 26 January 2010 |
LONDON - Oil fell towards $74 a barrel on Tuesday after China implemented a clampdown on lending, rekindling concern that tightening moves by the world’s second-largest oil user may limit demand. Crude approached a one-month low after the Chinese move, which analysts said was a setback for the bullish view in oil markets that puts the prospect of rising Asian demand ahead of the market’s weak current fundamentals. “The fundamental link to current prices is weak — hence oil prices need at least some general optimism that boom times are around the corner,” said Olivier Jakob, analyst at Petromatrix. “That general optimism depends a lot on China’s consumption, saving the rest of the world and that will be somewhat challenged by the Chinese government trying to regulate the formation of bubbles.” U.S. oil was down 76 cents at $74.50 by 1206 GMT, having traded as low as $74.14. On Friday, it touched a one-month intraday low of $74.01. Brent crude fell 65 cents to $73.04. Crude oil futures have fallen by more than 6 percent in January, set for their first monthly decline since July 2009. China implemented its planned increase in required reserves for some banks on Tuesday, sources told Reuters. Asian stocks fell, copper slipped and the dollar gained. European shares lost ground. “The Chinese tightening is making people concerned that it is going to damp down demand, but it won’t damp demand by very much,” said Christopher Bellew, a broker at Bache Commodities. “The market may be forming a base around these numbers, I think.” Recovery jittersHighlighting fears that a global recovery may be sputtering, South Korea reported weaker-than-expected growth in the fourth quarter. Britain came out of recession in the fourth quarter, but with a lower growth rate than expected. Standard & Poor’s cut its rating outlook on Japan. Economic reports this week have also raised doubts over the strength of the U.S. recovery. The Federal Reserve is not expected to indicate that it will raise its benchmark rate any time soon when it meets this week. The Federal Open Market Committee (FOMC), the Fed’s policy-setting group, begins a two-day policy meeting on Tuesday. Oil inventories in the United States, the top oil consumer, are expected to rise further in reports due this week. Crude stocks probably rose by 1.7 million barrels, a Reuters poll of analysts showed on Monday. The survey also forecasts gasoline stockpiles probably climbed 1.4 million barrels and distillates, which include heating oil and diesel, were predicted to have fallen 1.4 million barrels. Industry group American Petroleum Institute issues its weekly inventory report on Tuesday at 2130 GMT. The government’s Energy Information Administration (EIA) follows on Wednesday. Quoted from: Khaleejtimes.com |
Monday, December 14, 2009
Oil Rises Above $71 on Brighter Demand Outlook
(Reuters)11 December 2009
LONDON - Oil rose on Friday as forecasts for higher demand growth next year and strong Chinese industrial output boosted sentiment, ending a seven-day losing streak which saw prices dip below $70 a barrel for the first time in two months.
U.S. crude for January delivery edged up 52 cents to $71.06 a barrel by 1107 GMT, after touching a session low of $69.81 a barrel on Thursday. Over the past seven trading days, front month crude has sunk almost $7 or 10 percent.
Brent crude futures rose 55 cents to $72.41 a barrel.
World oil demand will rise by almost 1.5 million barrels per day (bpd) in 2010 to 86.3 million bpd and the rate of demand growth will also accelerate, the International Energy Agency (IEA), which advises 28 industrialised nations, said on Friday.
“Oil demand looks a bit stronger,” said David Fyfe, head of the oil industry and markets division of the IEA. “Looking at 2010, it is an adjustment in a bullish direction.”
The report came after the U.S. Energy Information Administration revised its own world oil demand for 2009 lower on Tuesday
Strong industrial growth figures out of China also helped to reverse this week’s price slump.
China’s November industrial output surged to its strongest since June 2007, underscoring the economy’s robust recovery from the global downturn, and analysts expected the trend to continue in coming months.
Refining rates in the world’s second largest oil user also posted a record high in November, up 21 percent from a year earlier to 8.12 million bpd, signalling recovering demand.
“The IEA shows demand is slightly up and the Chinese data has been positive. Prices are likely to stabilise around these levels,” said Olivier Jakob of Petromatrix, adding $70 a barrel was set to be a key technical support level moving forward.
Oversupply
Analysts however cautioned the supply concerns that drove prices lower this week were likely to hold sway over the market and could temper any future rallies.
Earlier this week, the EIA reported stocks at the U.S. delivery hub of Cushing in Oklahoma rose 2.5 million barrels to 33.4 million barrels.
This inventory overhang has depressed front month U.S. crude prices relative to oil futures, resulting this week in the widest WTI crude market contango since August of more than $2 a barrel.
“There is a strong message in the oil market and that is weakness. The contango is widening significantly and this points to physical oversupply,” said analyst David Wech at JBC Energy, referring to both inventories on land and in floating storage.
The volume of refined oil products stored on ships floating in the sea increased to 98 million barrels at the end of November, the IEA said on Friday.
Data out of the United States later is likely to provide further direction as traders look for clues about the pace of demand recovery in the world’s largest oil consumer.
U.S. retail sales for November are due at 1330 GMT and preliminary December consumer confidence figures at 1455 GMT.
These data will also be important drivers for the U.S. dollar and this could in turn steer oil, analysts said.
Weakness in the U.S. dollar has been a factor behind this year’s oil price rally from below $40 a barrel last December.
A cheap dollar tends to drive oil higher as it makes it more attractive for buyers using other currencies.
quoted from: Khaleej Times
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Solvay Launces Tender Offer on Shares Vinythai
Offer will allow Solvay to support development of Vinythai’s businesses
Solvay today announces that in line with its strategy of growing in emerging markets, its Dutch subsidiary Solvay Chemicals and Plastics Holding B.V. is launching a tender offer on the shares of Vinythai, the Thai Vinyl and Chlor-alkali producer. Solvay’s participation in Vinythai recently has crossed the threshold of 50% of the shares of its Thai subsidiary. The tender offer price is 6.15 Thai Baht per share, and the offer period will run from December 16th 2009 to January 21st 2010. Solvay has no intention to increase the price or to extend the term of the Tender Offer.
The offer will allow Solvay to support the development of Vinythai’s businesses, including the Epicerol (R) project recently transferred to Vinythai. Epicerol is an innovative and environment friendly production process for epichlorohydrin, protected by 38 patent applications, some of them already granted in different parts of the World. It is based on the transformation of natural glycerine mainly obtained as by-product from the production of biofuels.
Epichlorohydrin is an essential feedstock for the production of epoxy resins, increasingly used in applications such as corrosion protection coatings as well in the electronics, automotive or aerospace industry. Demand for epichlorohydrin to produce wind turbine blades of windmills is also soaring.
VINYTHAI is a Vinyl and Chlor-alkali producer listed on the Stock Exchange of Thailand. Its major shareholders are the Solvay Group (50%), PTT Chemical Public Company (24.98%), and the Charoen Pokphand Group (11.87%).
In 2008 Vinythai recorded total revenues of 13,312 MTHB (EUR 275 million) and booked a net profit of 1,035 MTHB (EUR 21 million). Vinythai employs 390 people.
A year ago Vinythai increased its PVC capacity at Map Ta Phut in Thailand by 70,000 tonnes to 280,000 tonnes, and has a plan to raise capacity in stages to 400,000 tonnes.
The site is also home to the 100,000 tonnes glycerine-to-epichlorohydrin Epicerol process plant being built by Solvay, and due to be operational about now. The Epicerol process makes epichlorohydrin from the glycerine by-product of biodiesel production. Epichlorohydrin is a feedstock for the production of epoxy resins and Solvay says demand for it has significantly outpaced the growth of the world economy in recent years.
Solvay today announces that in line with its strategy of growing in emerging markets, its Dutch subsidiary Solvay Chemicals and Plastics Holding B.V. is launching a tender offer on the shares of Vinythai, the Thai Vinyl and Chlor-alkali producer. Solvay’s participation in Vinythai recently has crossed the threshold of 50% of the shares of its Thai subsidiary. The tender offer price is 6.15 Thai Baht per share, and the offer period will run from December 16th 2009 to January 21st 2010. Solvay has no intention to increase the price or to extend the term of the Tender Offer.
The offer will allow Solvay to support the development of Vinythai’s businesses, including the Epicerol (R) project recently transferred to Vinythai. Epicerol is an innovative and environment friendly production process for epichlorohydrin, protected by 38 patent applications, some of them already granted in different parts of the World. It is based on the transformation of natural glycerine mainly obtained as by-product from the production of biofuels.
Epichlorohydrin is an essential feedstock for the production of epoxy resins, increasingly used in applications such as corrosion protection coatings as well in the electronics, automotive or aerospace industry. Demand for epichlorohydrin to produce wind turbine blades of windmills is also soaring.
VINYTHAI is a Vinyl and Chlor-alkali producer listed on the Stock Exchange of Thailand. Its major shareholders are the Solvay Group (50%), PTT Chemical Public Company (24.98%), and the Charoen Pokphand Group (11.87%).
In 2008 Vinythai recorded total revenues of 13,312 MTHB (EUR 275 million) and booked a net profit of 1,035 MTHB (EUR 21 million). Vinythai employs 390 people.
A year ago Vinythai increased its PVC capacity at Map Ta Phut in Thailand by 70,000 tonnes to 280,000 tonnes, and has a plan to raise capacity in stages to 400,000 tonnes.
The site is also home to the 100,000 tonnes glycerine-to-epichlorohydrin Epicerol process plant being built by Solvay, and due to be operational about now. The Epicerol process makes epichlorohydrin from the glycerine by-product of biodiesel production. Epichlorohydrin is a feedstock for the production of epoxy resins and Solvay says demand for it has significantly outpaced the growth of the world economy in recent years.
quoted from: New Kaznak
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Thursday, December 03, 2009
LAS Prices Resilient Despite Low Demand
Gordon Graff -- Purchasing, 12/2/2009 1:58:26 PM
Despite a decline in demand, prices for surfactant linear alkylbenzene sulfonate have remained stubbornly higher than other chemicals, steadily increasing off a cyclical bottom in April. Prices did dip in November, however.
Overall business conditions in the surfactants market were "chronically depressed" during the first half of 2009, says Neil Burns, managing partner at Neil A. Burns a private equity firm that invests in specialty chemical companies. While activity began to recover in the second half of the year, he notes, total demand for surfactants in 2009 will be "significantly below that of 2008 in volumes, revenues and profitability."
Considering how much demand retreated, prices of surfactants have been fairly resilient. For example, according to Purchasingdata.com, tags for LAS hit a high point of $1.03/lb. in July 2008, slid to a low of 89¢/lb in April, and had bounced back to 97¢/lb by September.
quoted from: Purchasing.com
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Copper Prices Continue to Rise
Paul Teague -- Purchasing, 12/2/2009 2:01:33 PM
Buyers tell Purchasing that they paid more than twice as much for copper cathode in November as they paid in December 2008. The average transaction price last month, they said, was $3.06/lb versus $1.49 last December.
The transaction price has climbed steadily all year. Strong demand in China is among the reasons for the price increases. But another factor, especially lately, has been fears of supply shortages due to labor strife at two South American mines.
Another factor could be production slowdowns at Kazakhsatn-based copper miner Kazakhmys PLC, one of the world's ten largest producers. Reuters reported that the miner produced 13.5% less copper cathode from its own concentrate in the third quarter. The cutback, Reuters said, was part of the miner's efforts to cut its overall costs.
But a new source of copper is coming on line. The Chinese company Golden Dragon has opened a mine in northern Mexico expected to have a capacity of 120,000 tons, according to the Chinese news agency Xinhua.
Meanwhile, copper on the COMEX exchange was priced at $3.22 earlier today. The price on the London Metal Exchange was $3.17 yesterday.
quoted from: Purchasing.com
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quoted from: Purchasing.com
Saturday, October 03, 2009
Crude Oil Price is Stuck Around $67/barrel
Crude oil market pricing is adopting a bearish tone from high inventories and still-weak demand. Spot prices of West Texas Intermediate (WTI) are around $67/barrel this week and futures are trading on the New York Mercantile Exchange at that level through January. But, there is a chance they could deteriorate in coming weeks.
"Energy's fundamentals still are uninspiring with a fundamental market backdrop typified by sluggish end-user demand, rising stocks, and poor OPEC compliance," writes analyst Ed Meir at MF Global in New York, noting that the Organization of Petroleum Exporting Countries cartel continues to pump oil above its own quotas. "So, prices should remain confined to the $65-$75 trading range for some time to come. Saudi Arabian Oil Minister Ali al-Naimi tells Reuters that $75 a barrel was "a fair price for oil" and he sees no need for OPEC to change production ahead of the group's next meeting in December. "We believe that around $75 (a barrel) is a fair price for both producer and consumer," Naimi says.
So far this year, WTI is averaging $56/barrel and the Energy Information Administration (EIA) has forecast $60 for this year-and $72 in 2010. However, a Reuters poll of 36 analysts is bearish and sees WTI averaging $59 next year. Goldman Sachs Group disagrees, suggesting crude oil prices are likely to be higher in the future due to a recovery in demand and a decline in production.
Global demand is still very weak so that, when inventories reach record levels, oil prices will be pressured downward, says economist John Mothersole at the IHS Global Insights office in Washington.
Near-term prices also could slide since the American Petroleum Institute's report shows that crude oil stocks shot up 2.8 million barrels in the week ended Sept. 25 to 340 million barrels, substantially more than forecast. Distillate supplies, which include heating oil and diesel fuel, jumped 2.3 million barrels, also ahead of estimates, to 170.7 million barrels. Gasoline stocks fell 1.7 million barrels to 212.5 million barrels.
quoted from: Purchasing.com
Read more...Wednesday, September 09, 2009
Christmas Season Brings Little Cheer for Asian Petchems
SINGAPORE (ICIS news)--Economic numbers tell of a global recovery story, but rising unemployment and shrinking purchasing power have kept consumers on the sidelines, making it difficult for petrochemicals demand to significantly pick up ahead of the Christmas season, analysts said on Tuesday.
The degree of uncertainty on the pace of economic turnaround remains high about a year after the unprecedented collapse in demand in late 2008, analysts said.
“We’re not seeing that spending power return yet in terms of day to day. That for me will determine whether this recession has come to an end,” said Paul Hulme, president of the global textile effects division at US producer Huntsman.
While petrochemical prices managed to scale back up this year, they are still a long way off from hitting pre-crisis levels given soft demand.
“I think it is very hard to say how strong demand will be in the fourth quarter. It is unlikely to be as bad as last year. But the market surprises,” said Andrew Wong, a petrochemical industry analyst at global credit ratings firm Standard and Poor’s.
Thanks to huge government spending, most countries in Asia have exhibited signs of recovery.
Japan, Asia’s biggest and the world’s second biggest economy, emerged from a deep recession in the three months to June to mirror the positive developments in its western counterparts. It was the third economy in the G7 list to post positive quarter-on-quarter GDP numbers.
China muddled through the crisis and managed to keep its head above waters because of the sheer size of its domestic economy, even though the major pillar of its rapid expansion - exports - gave way.
Manufacturing activities peak in the months of July to September in China every year in preparation for the deluge of export orders in the fourth quarter, when the global Christmas shopping spree phenomenon occurs.
The current weak state of the global economy suggested that strong rebound in demand for exports was unlikely this year as consumers continued to tighten their belts, economists said.
It may be that it is in the fourth quarter than in any time of this year that exports weakness would hurt Asia the most.
Demand for polystyrene (PS), acrylonitrile- butadiene-styrene (ABS) and expanded polystyrene (EPS) remained slow this month despite September being the tail-end of the peak of China’s production.
Traders said that Chinese exports to the US and Europe remained in doldrums, especially for toys. Consumer electronics fared better but business was still below the levels achieved in the previous years.
Some factories reported orders at 50-70% of previous years while smaller ones saw business shrink more than 50%, said a trader in Hong Kong.
“Why are the orders not coming in at the moment? I would think that buyers are still holding on to their money, waiting for a further fall in prices,” said Im Jee Soo, a Seoul-based analyst at Good Morning Shinshan Securities.
China’s demand, boosted by its massive fiscal stimulus, drove up product prices since the start of the year, but this was mostly due to restocking, analysts said.
In some sectors like polyester that used to be buoyant, weakness recently set in and pulled down prices of fibre intermediates such as purified terephthalic acid (PTA), paraxylene (PX) and monoethylene glycol (MEG).
Huntsman’s Hulme and S&P’s Wong warned against another sharp decline in global economic output once the effects of the global stimulus packages wear off if consumer confidence failed to return.
“Demand for these [petrochemical] products is closely linked to GDP growth. A return of GDP growth in the region and the pace of that is still quite uncertain,” Wong said.
Petrochemical trading activities in China were muted when the central bank started to rein in on lending in the second half of the year, affording companies and traders only limited spending power, said Im from Good Morning Shinshan.
A clearer picture on demand would emerge in the middle of the month, she said.
It did not help that more capacities would come on stream towards the end of the year when demand was very soft, hence the expectations of further price depression, analysts said.
“Certainly volumes will take a while to come back. There is an acknowledgement that this year is going to be a tough year,” said S&P’s Wong.
“Next year will be soft and perhaps in 2011, it will be more of a stronger operating environment,” he added.
The degree of uncertainty on the pace of economic turnaround remains high about a year after the unprecedented collapse in demand in late 2008, analysts said.
“We’re not seeing that spending power return yet in terms of day to day. That for me will determine whether this recession has come to an end,” said Paul Hulme, president of the global textile effects division at US producer Huntsman.
While petrochemical prices managed to scale back up this year, they are still a long way off from hitting pre-crisis levels given soft demand.
“I think it is very hard to say how strong demand will be in the fourth quarter. It is unlikely to be as bad as last year. But the market surprises,” said Andrew Wong, a petrochemical industry analyst at global credit ratings firm Standard and Poor’s.
Thanks to huge government spending, most countries in Asia have exhibited signs of recovery.
Japan, Asia’s biggest and the world’s second biggest economy, emerged from a deep recession in the three months to June to mirror the positive developments in its western counterparts. It was the third economy in the G7 list to post positive quarter-on-quarter GDP numbers.
China muddled through the crisis and managed to keep its head above waters because of the sheer size of its domestic economy, even though the major pillar of its rapid expansion - exports - gave way.
Manufacturing activities peak in the months of July to September in China every year in preparation for the deluge of export orders in the fourth quarter, when the global Christmas shopping spree phenomenon occurs.
The current weak state of the global economy suggested that strong rebound in demand for exports was unlikely this year as consumers continued to tighten their belts, economists said.
It may be that it is in the fourth quarter than in any time of this year that exports weakness would hurt Asia the most.
Demand for polystyrene (PS), acrylonitrile- butadiene-styrene (ABS) and expanded polystyrene (EPS) remained slow this month despite September being the tail-end of the peak of China’s production.
Traders said that Chinese exports to the US and Europe remained in doldrums, especially for toys. Consumer electronics fared better but business was still below the levels achieved in the previous years.
Some factories reported orders at 50-70% of previous years while smaller ones saw business shrink more than 50%, said a trader in Hong Kong.
“Why are the orders not coming in at the moment? I would think that buyers are still holding on to their money, waiting for a further fall in prices,” said Im Jee Soo, a Seoul-based analyst at Good Morning Shinshan Securities.
China’s demand, boosted by its massive fiscal stimulus, drove up product prices since the start of the year, but this was mostly due to restocking, analysts said.
In some sectors like polyester that used to be buoyant, weakness recently set in and pulled down prices of fibre intermediates such as purified terephthalic acid (PTA), paraxylene (PX) and monoethylene glycol (MEG).
Huntsman’s Hulme and S&P’s Wong warned against another sharp decline in global economic output once the effects of the global stimulus packages wear off if consumer confidence failed to return.
“Demand for these [petrochemical] products is closely linked to GDP growth. A return of GDP growth in the region and the pace of that is still quite uncertain,” Wong said.
Petrochemical trading activities in China were muted when the central bank started to rein in on lending in the second half of the year, affording companies and traders only limited spending power, said Im from Good Morning Shinshan.
A clearer picture on demand would emerge in the middle of the month, she said.
It did not help that more capacities would come on stream towards the end of the year when demand was very soft, hence the expectations of further price depression, analysts said.
“Certainly volumes will take a while to come back. There is an acknowledgement that this year is going to be a tough year,” said S&P’s Wong.
“Next year will be soft and perhaps in 2011, it will be more of a stronger operating environment,” he added.
Given all that transpired since the fourth quarter of last year and the very gradual upturn, it looks like this is not going to be a very merry Christmas for all.
quoted from: ICIS.com
Read more...Monday, August 31, 2009
Sharq MEG Plant at Optimum Level, but Cracker yet to Start
SINGAPORE (ICIS news)--Eastern Petrochemical (Sharq)’s new 700,000 tonne/year monoethylene glycol (MEG) plant in Saudi Arabia is running at optimal levels, after starting up about two weeks ago, sources close to the company said on Thursday.
"The feedstocks were put in earlier this month, and gradually the operating rates were raised," said one of the sources familiar with the operations of the Al Jubail-based producer.
Another source said the greenfield 1.3m tonne/year cracker and other downstream facilities adjoining the so-called No 4 MEG facility had yet to start up.
"We are now using ethylene inventories from previous months to run the new MEG plant, but hopefully we would have the cracker up and running by September," the second source said.
Both sources refused to discuss what could happen to the MEG operations if the new cracker failed to start up by the end of September. The whole complex had previously faced several delays in starting up in the past year.
Sharq, a joint venture between petrochemical giant SABIC and a Japanese consortium of companies led by Mitsubishi Chemical, operates three existing MEG lines with a total nameplate capacity of 1.4m tonnes/year at Al Jubail.
A third source said operations at the three units had not been at full capacity since earlier this month but gave no other details. There was no immediate official comment on the operating rates.
Besides the new MEG plant, other new capacities downstream of the greenfield cracker include a 400,000 tonne/year high-density polyethylene (HDPE) line and a linear low-density polyethylene (LLDPE) unit of similar capacity, due to start up by the end of this year.
"The feedstocks were put in earlier this month, and gradually the operating rates were raised," said one of the sources familiar with the operations of the Al Jubail-based producer.
Another source said the greenfield 1.3m tonne/year cracker and other downstream facilities adjoining the so-called No 4 MEG facility had yet to start up.
"We are now using ethylene inventories from previous months to run the new MEG plant, but hopefully we would have the cracker up and running by September," the second source said.
Both sources refused to discuss what could happen to the MEG operations if the new cracker failed to start up by the end of September. The whole complex had previously faced several delays in starting up in the past year.
Sharq, a joint venture between petrochemical giant SABIC and a Japanese consortium of companies led by Mitsubishi Chemical, operates three existing MEG lines with a total nameplate capacity of 1.4m tonnes/year at Al Jubail.
A third source said operations at the three units had not been at full capacity since earlier this month but gave no other details. There was no immediate official comment on the operating rates.
Besides the new MEG plant, other new capacities downstream of the greenfield cracker include a 400,000 tonne/year high-density polyethylene (HDPE) line and a linear low-density polyethylene (LLDPE) unit of similar capacity, due to start up by the end of this year.
quoted from: ICIS.com
Read more...Wednesday, August 26, 2009
NE Asia Ethylene Heads Southeast on Weak China Demand
SINGAPORE (ICIS news)--China’s weak demand for ethylene has paralysed trading activity in northeast (NE) Asia and cargoes have started heading towards the southeastern part of the region, where the material currently commands better prices, market sources said on Wednesday.
“The cargoes have all gone to southeast Asia,” said a Taiwanese buyer in Mandarin.
Talks with traders had lapsed due to a wide buy-sell gap, he added.
Selling ideas were pegged at up to $1,020-1,030/tonne (€714-721/tonne) CFR (cost and freight) NE Asia for cargoes arriving in September while buying ideas in the region hovered in the low to mid $900s/tonne CFR NE Asia, market sources said.
The lack of demand from China – Asia’s largest importer of ethylene – had left the northeast Asian market without direction over the past three weeks, they said.
End-users in the country were sufficiently covered as domestic crackers were running at high operating rates averaging 90-100%, industry sources said.
Shanghai Secco Petrochemical was running its newly expanded 1.2 m tonne/year cracker in Caojing at close to full rates, market sources said.
Impending cracker start-ups had also contributed to expectations of ample domestic supplies and Chinese buyers had no incentive to seek spot cargoes, they added.
Fujian Refining and Petrochemical Co (FREP) is expected to start up its new naphtha cracker – an 800,000 tonne/year facility in Quanzhou, southern China by the end of the month.
Spot ethylene prices slipped $10/tonne at the top-end of the range to $950-970/tonne CFR NE Asia last week due to limited buying interest, according to data from global chemical market intelligence service ICIS pricing.
Prices in southeast Asia, on the other hand, rose $20-40/tonne to $1,030-1,060/tonne CFR over the same period, based on the same data.
Demand was comparatively healthier in southeast Asia partly due to the continued delays in the delivery of term cargoes from Iran due to cracker shutdowns early this month.
Iran is the largest Middle-eastern supplier of ethylene to the region. It exported 680,000-700,000 tonnes of ethylene in 2008 but sales volumes are expected to fall to 450,000-500,000 tonnes this year due to planned and unplanned cracker outages.
Gas feedstock shortage at Assaluyeh in southern Iran had also capped plant operating rates at 50-60% for the most part of 2009, traders said.
During the week, a 3,500-tonne ethylene cargo was heard sold on formula to a buyer in Indonesia for loading in the first half of September from Japan or Korea.
Spot supply from Korea was limited with bulk of its ethylene output being fed into derivative polymer plants that were running hard on the back of healthy export demand but Japan has cargoes available due to turnarounds at downstream plants in September and October, market sources said.
Discussions between producers and traders were heard in the low $900s/tonne on FOB (free on board) basis although some market participants said there had been deals done below these levels.
“September is (the end of) the first half accounting period in Japan so inventories should be reduced,” said a domestic producer currently in talks to sell some spot ethylene cargoes.
“The cargoes have all gone to southeast Asia,” said a Taiwanese buyer in Mandarin.
Talks with traders had lapsed due to a wide buy-sell gap, he added.
Selling ideas were pegged at up to $1,020-1,030/tonne (€714-721/tonne) CFR (cost and freight) NE Asia for cargoes arriving in September while buying ideas in the region hovered in the low to mid $900s/tonne CFR NE Asia, market sources said.
The lack of demand from China – Asia’s largest importer of ethylene – had left the northeast Asian market without direction over the past three weeks, they said.
End-users in the country were sufficiently covered as domestic crackers were running at high operating rates averaging 90-100%, industry sources said.
Shanghai Secco Petrochemical was running its newly expanded 1.2 m tonne/year cracker in Caojing at close to full rates, market sources said.
Impending cracker start-ups had also contributed to expectations of ample domestic supplies and Chinese buyers had no incentive to seek spot cargoes, they added.
Fujian Refining and Petrochemical Co (FREP) is expected to start up its new naphtha cracker – an 800,000 tonne/year facility in Quanzhou, southern China by the end of the month.
Spot ethylene prices slipped $10/tonne at the top-end of the range to $950-970/tonne CFR NE Asia last week due to limited buying interest, according to data from global chemical market intelligence service ICIS pricing.
Prices in southeast Asia, on the other hand, rose $20-40/tonne to $1,030-1,060/tonne CFR over the same period, based on the same data.
Demand was comparatively healthier in southeast Asia partly due to the continued delays in the delivery of term cargoes from Iran due to cracker shutdowns early this month.
Iran is the largest Middle-eastern supplier of ethylene to the region. It exported 680,000-700,000 tonnes of ethylene in 2008 but sales volumes are expected to fall to 450,000-500,000 tonnes this year due to planned and unplanned cracker outages.
Gas feedstock shortage at Assaluyeh in southern Iran had also capped plant operating rates at 50-60% for the most part of 2009, traders said.
During the week, a 3,500-tonne ethylene cargo was heard sold on formula to a buyer in Indonesia for loading in the first half of September from Japan or Korea.
Spot supply from Korea was limited with bulk of its ethylene output being fed into derivative polymer plants that were running hard on the back of healthy export demand but Japan has cargoes available due to turnarounds at downstream plants in September and October, market sources said.
Discussions between producers and traders were heard in the low $900s/tonne on FOB (free on board) basis although some market participants said there had been deals done below these levels.
“September is (the end of) the first half accounting period in Japan so inventories should be reduced,” said a domestic producer currently in talks to sell some spot ethylene cargoes.
quoted from: ICIS.com
Read more...Friday, July 31, 2009
Soda Ash Prices Trend Down on Lower Demand
Soda ash prices slipped down again in July to $195/net ton from their May peak of $202, but buyers say the ongoing battle between U.S. and Asian suppliers makes it extremely difficult to forecast true soda ash supply and demand trends.
As reported earlier this year on Purchasing.com, soda ash prices spiked in January and continued up until recently, when they began to tick down. But the reason for the plateau and slight decline in prices is hard to put a finger on, while the future outlook for soda ash prices is even more complicated, involving import/export trends and soda ash's inter-relation with other materials.
For buyers looking to source soda ash domestically and avoid costly transportation costs, the market is not in their favor.
"The soda ash suppliers in the U.S. would rather export soda ash than sell it domestically because they can get more money by exporting the material," one soda ash buyer in the Midwest tells Purchasing.com. As a result, this buyer says it is difficult to get competitive soda ash pricing from U.S. suppliers because in many instances, the suppliers really don't want the U.S. business.
"The U.S. suppliers seem to keep with their current customers and not try to add any additional business. It is kind of a ‘take it or leave it' kind of relationship."
It's not just that buyer's imagination. On its second quarter earnings call, officials from FMC Corp. confirmed those sentiments saying "we intend to take full advantage of the low cost position of U.S. production to focus on gaining global market share at attractive margins. We intend to do so primarily by acquiring new customers export markets such as Asia."
And while U.S. producers are targeting Asia, Asian soda ash producers are targeting U.S. buyers. According to a recent Associated Press report, Chinese soda ash exports grew 40% in the first three months of 2009 vs. the same period last year. "They're exporting quite a bit more, and what they're doing in the process is lowering the sales price on the export market, which then makes it very difficult for the United States to compete," said Dennis Kostick, a senior minerals commodities specialist with the USGS, in the Associated Press report.
But while domestic demand for soda ash from some of its major end-market industries including glass and detergents is down, producers are also scaling back soda ash production in the U.S. drastically. According to the latest data from the US Geological Service, for example, "global economic problems have reduced world soda ash consumption, which in turn has reduced U.S. soda ash exports. To avoid an oversupply of soda ash inventories, domestic soda ash production has been cut back intentionally."
FMC in the first quarter temporarily curtailed production at its Granger facility, capacity which was brought on over the last few years to supply growing export demand. And Georgia-based OCI Chemical Corp. said this week it is laying off 38 of its 400 employees at a soda ash plant near Green River, Wyo. Company officials say the layoffs are a result of weakening global demand for soda ash.
Another factor that may push soda ash prices down is its relationship to caustic soda, which has dropped off in price recently. Earlier this year, FMC officials said that when caustic soda prices are over $400, the demand for soda ash as a lower-cost substitute increases and, thus, prices for soda ash increase. But as reported by Purchasing.com recently, caustic soda prices have plunged, lessening the need for a lower-cost substitute such as soda ash.
As reported earlier this year on Purchasing.com, soda ash prices spiked in January and continued up until recently, when they began to tick down. But the reason for the plateau and slight decline in prices is hard to put a finger on, while the future outlook for soda ash prices is even more complicated, involving import/export trends and soda ash's inter-relation with other materials.
For buyers looking to source soda ash domestically and avoid costly transportation costs, the market is not in their favor.
"The soda ash suppliers in the U.S. would rather export soda ash than sell it domestically because they can get more money by exporting the material," one soda ash buyer in the Midwest tells Purchasing.com. As a result, this buyer says it is difficult to get competitive soda ash pricing from U.S. suppliers because in many instances, the suppliers really don't want the U.S. business.
"The U.S. suppliers seem to keep with their current customers and not try to add any additional business. It is kind of a ‘take it or leave it' kind of relationship."
It's not just that buyer's imagination. On its second quarter earnings call, officials from FMC Corp. confirmed those sentiments saying "we intend to take full advantage of the low cost position of U.S. production to focus on gaining global market share at attractive margins. We intend to do so primarily by acquiring new customers export markets such as Asia."
And while U.S. producers are targeting Asia, Asian soda ash producers are targeting U.S. buyers. According to a recent Associated Press report, Chinese soda ash exports grew 40% in the first three months of 2009 vs. the same period last year. "They're exporting quite a bit more, and what they're doing in the process is lowering the sales price on the export market, which then makes it very difficult for the United States to compete," said Dennis Kostick, a senior minerals commodities specialist with the USGS, in the Associated Press report.
But while domestic demand for soda ash from some of its major end-market industries including glass and detergents is down, producers are also scaling back soda ash production in the U.S. drastically. According to the latest data from the US Geological Service, for example, "global economic problems have reduced world soda ash consumption, which in turn has reduced U.S. soda ash exports. To avoid an oversupply of soda ash inventories, domestic soda ash production has been cut back intentionally."
FMC in the first quarter temporarily curtailed production at its Granger facility, capacity which was brought on over the last few years to supply growing export demand. And Georgia-based OCI Chemical Corp. said this week it is laying off 38 of its 400 employees at a soda ash plant near Green River, Wyo. Company officials say the layoffs are a result of weakening global demand for soda ash.
Another factor that may push soda ash prices down is its relationship to caustic soda, which has dropped off in price recently. Earlier this year, FMC officials said that when caustic soda prices are over $400, the demand for soda ash as a lower-cost substitute increases and, thus, prices for soda ash increase. But as reported by Purchasing.com recently, caustic soda prices have plunged, lessening the need for a lower-cost substitute such as soda ash.
quoted froml: Purchasing.com
Read more...Polyester Boom in China Pushing up PTA, PX Prices
SINGAPORE (ICIS news)--The current boom in the Chinese polyester industry is supporting gains in feedstock purified terephthalic acid (PTA) pricing in the past two months, which in turn has pushed up paraxylene (PX) values.
But market participants said they believed the price uptrend was not merely demand-induced but also supply-led.
PTA spot prices hit as high as $950/tonne (€675/tonne) CFR China this week, a steep $70-80/tonne up from last Friday’s close of $870-880/tonne CFR China, according to ICIS pricing.
Just a month ago, PTA values were no more than $830/tonne CFR China, and in early June were still struggling to break above $800/tonne CFR China.
As for PX prices, the gains were almost equally robust. Between mid-June and this week, prices had spiked $170-200/tonne. And between mid-June and early July, PX prices were hovering around $1,000-1,030/tonne CFR China.
“The gains had come well beyond most people’s imagination, frankly we didn’t expect it ourselves either,” said a source from BP, a major producer of PTA in Asia and a leading PX supplier globally.
In fact, PTA producers had been enjoying profits for the most of this year, a departure from the loss-making days between late 2006 and most of 2007-2008.
“It’s obvious that downstream demand is pushing up prices [of PTA], but at the same time, we’re also not producing enough to meet this strong demand,” said a source from Yisheng Petrochemical, a leading Chinese PTA producer.
PTA makers had been cautious with pushing their operating rates to 100% of nameplate capacity, after the losses seen in the past 2-3 years, traders said.
“Yes, we did not produce full this year, as we were so concerned [earlier in the year] that the more you produce, the more losses you’d make,” said a source from a major PTA producer in Taiwan.
Such cautiousness among PTA makers had also compelled them to commit to less feedstock paraxylene (PX) contract volumes.
A rough estimate by traders suggested that most PTA producers had only locked in about 50-60% of their PX needs in contracts this year, setting the stage for the spectacular price gains of both PTA and PX.
“For whatever reasons, the downstream [polyester] market was so bullish, and we found ourselves regularly running out of PTA to sell this year,” said a source from Formosa Chemical & Fiber Corp (FCFC), major PTA maker in Taiwan.
“So we changed our minds and really wanted to have more PX after all, but with outages here and there, and limited PX to begin with, we cannot produce that much PTA,” added the FCFC source.
Those who managed to chase down the PX successfully maintained optimal PTA operating rates, and enjoyed profitability, said a source from Oriental Petrochemical (Taiwan), a PTA maker which was one of the most aggressive buyers of spot PX in the past two months.
“The strong downstream demand pushed up PX prices too naturally, and you know, the [cautiousness] seen among [PTA makers] was also seen among [PX producers],” said a PX broker from Korea.
Indeed, PX producers in Asia had the concept that the market would soon become oversupplied, with new Chinese and Middle Eastern PX capacities coming onstream in the second half of this year.
As such, they kept low operating rates of no more than 80% on average, and were very careful with their spot sales, said a Korean trader based in Singapore.
“As we all know now, the opposite happened, and PX suppliers were also caught off-guard, and they did not have enough PX to sell to a hungry downstream market,” said another PX broker, based in Japan.
Of course, poor returns for refineries since crude oil prices collapsed late last year also contributed to the relatively low PX output, market sources said.
“Refineries are seeing poor returns, so they would not run too high [operating rates], so naturally we see less aromatics in the market,” said a Singapore-based trader representing a Middle-Eastern owned company.
Besides poor refinery returns, lacklustre margins for chief aromatic benzene also hampered aromatics output, said a source from Japan Energy, a leading aromatics producer.
“Benzene margins were very bad earlier this year, so even if we want more PX, even if our customers want more PX, we cannot give them,” added the source.
Hence, to many market watchers, this year’s PTA-PX price trend so far seemed to be a case of misjudgement and wrong calculations.
“I think it’s fair to say most of us got it wrong; we thought prices would collapse but the opposite happened, and nobody is talking about the supposed oversupply [of PTA and PX] now,” said a source from Sam Nam Petrochemical, a leading producer of PTA in Korea.
But market participants said they believed the price uptrend was not merely demand-induced but also supply-led.
PTA spot prices hit as high as $950/tonne (€675/tonne) CFR China this week, a steep $70-80/tonne up from last Friday’s close of $870-880/tonne CFR China, according to ICIS pricing.
Just a month ago, PTA values were no more than $830/tonne CFR China, and in early June were still struggling to break above $800/tonne CFR China.
As for PX prices, the gains were almost equally robust. Between mid-June and this week, prices had spiked $170-200/tonne. And between mid-June and early July, PX prices were hovering around $1,000-1,030/tonne CFR China.
“The gains had come well beyond most people’s imagination, frankly we didn’t expect it ourselves either,” said a source from BP, a major producer of PTA in Asia and a leading PX supplier globally.
In fact, PTA producers had been enjoying profits for the most of this year, a departure from the loss-making days between late 2006 and most of 2007-2008.
“It’s obvious that downstream demand is pushing up prices [of PTA], but at the same time, we’re also not producing enough to meet this strong demand,” said a source from Yisheng Petrochemical, a leading Chinese PTA producer.
PTA makers had been cautious with pushing their operating rates to 100% of nameplate capacity, after the losses seen in the past 2-3 years, traders said.
“Yes, we did not produce full this year, as we were so concerned [earlier in the year] that the more you produce, the more losses you’d make,” said a source from a major PTA producer in Taiwan.
Such cautiousness among PTA makers had also compelled them to commit to less feedstock paraxylene (PX) contract volumes.
A rough estimate by traders suggested that most PTA producers had only locked in about 50-60% of their PX needs in contracts this year, setting the stage for the spectacular price gains of both PTA and PX.
“For whatever reasons, the downstream [polyester] market was so bullish, and we found ourselves regularly running out of PTA to sell this year,” said a source from Formosa Chemical & Fiber Corp (FCFC), major PTA maker in Taiwan.
“So we changed our minds and really wanted to have more PX after all, but with outages here and there, and limited PX to begin with, we cannot produce that much PTA,” added the FCFC source.
Those who managed to chase down the PX successfully maintained optimal PTA operating rates, and enjoyed profitability, said a source from Oriental Petrochemical (Taiwan), a PTA maker which was one of the most aggressive buyers of spot PX in the past two months.
“The strong downstream demand pushed up PX prices too naturally, and you know, the [cautiousness] seen among [PTA makers] was also seen among [PX producers],” said a PX broker from Korea.
Indeed, PX producers in Asia had the concept that the market would soon become oversupplied, with new Chinese and Middle Eastern PX capacities coming onstream in the second half of this year.
As such, they kept low operating rates of no more than 80% on average, and were very careful with their spot sales, said a Korean trader based in Singapore.
“As we all know now, the opposite happened, and PX suppliers were also caught off-guard, and they did not have enough PX to sell to a hungry downstream market,” said another PX broker, based in Japan.
Of course, poor returns for refineries since crude oil prices collapsed late last year also contributed to the relatively low PX output, market sources said.
“Refineries are seeing poor returns, so they would not run too high [operating rates], so naturally we see less aromatics in the market,” said a Singapore-based trader representing a Middle-Eastern owned company.
Besides poor refinery returns, lacklustre margins for chief aromatic benzene also hampered aromatics output, said a source from Japan Energy, a leading aromatics producer.
“Benzene margins were very bad earlier this year, so even if we want more PX, even if our customers want more PX, we cannot give them,” added the source.
Hence, to many market watchers, this year’s PTA-PX price trend so far seemed to be a case of misjudgement and wrong calculations.
“I think it’s fair to say most of us got it wrong; we thought prices would collapse but the opposite happened, and nobody is talking about the supposed oversupply [of PTA and PX] now,” said a source from Sam Nam Petrochemical, a leading producer of PTA in Korea.
quoted from: ICIS.com
Read more...Aluminum Prices Fall
Just as one aluminum company is trying to convince buyers that prices should rise due to tightening supply, another producer tells its workers that many are about to lose their jobs because of collapsed demand and a third says further cutback are possible.
Aluminum common alloy sheet, grade 3003, slipped back 10¢ to $1.38/lb this month because of weak demand, even though aluminum ingot increased 5¢ in the Midwest market. However, Novelis of Atlanta has announced a premium on prices for some sheet products offered through its Web sales program as a result of a spike in demand from its customers caused by low inventory levels within aluminum distribution industry. American Metals Market says service center destocking over the past six months has sparked a recent increase in demand for Web sales. "We've seen a spike in demand for products that we have available in stock because people haven't wanted to carry inventory," a company spokesman says.
On the other hand, Ormet is poised to further curtail operations at its 260,000 metric ton/year smelter in Hannibal, Ohio. Despite a lack of confirmation from the company, union and market sources say a shutdown to 20% of capacity is planned for Hannibal this summer. The smelter already is down to operating 77% of its potlines in an economicallydepressed region of southeastern Ohio.
The Aluminum Association reports that producer shipments during the first half of 2009 totaled an estimated 7.912 billion pounds, 26.7% below the 2008 six-month total of 10.790 million. And, while analysts suggest there has been a pickup in orders in North America in recent weeks, its 2% six-month rate of growth pales versus the 17% improvement in global bookings.
Meanwhile, Century Aluminum reported a third consecutive quarterly loss last week and slashed production to combat weak demand for aluminum amid a more than 65% drop in sales. "The demand outlook has improved somewhat in certain regions and sectors," CEO Logan Kruger says in a statement. "However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved."
Since the economic downturn late last year, metal demand and prices have plummeted and Century has cut production capacity at its Ravenswood, W.Va., and Hawesville, Ky., aluminum smelters. Kruger now says that "despite recently improving metal prices, we believe the balance of risk remains on the downside."
Aluminum common alloy sheet, grade 3003, slipped back 10¢ to $1.38/lb this month because of weak demand, even though aluminum ingot increased 5¢ in the Midwest market. However, Novelis of Atlanta has announced a premium on prices for some sheet products offered through its Web sales program as a result of a spike in demand from its customers caused by low inventory levels within aluminum distribution industry. American Metals Market says service center destocking over the past six months has sparked a recent increase in demand for Web sales. "We've seen a spike in demand for products that we have available in stock because people haven't wanted to carry inventory," a company spokesman says.
On the other hand, Ormet is poised to further curtail operations at its 260,000 metric ton/year smelter in Hannibal, Ohio. Despite a lack of confirmation from the company, union and market sources say a shutdown to 20% of capacity is planned for Hannibal this summer. The smelter already is down to operating 77% of its potlines in an economicallydepressed region of southeastern Ohio.
The Aluminum Association reports that producer shipments during the first half of 2009 totaled an estimated 7.912 billion pounds, 26.7% below the 2008 six-month total of 10.790 million. And, while analysts suggest there has been a pickup in orders in North America in recent weeks, its 2% six-month rate of growth pales versus the 17% improvement in global bookings.
Meanwhile, Century Aluminum reported a third consecutive quarterly loss last week and slashed production to combat weak demand for aluminum amid a more than 65% drop in sales. "The demand outlook has improved somewhat in certain regions and sectors," CEO Logan Kruger says in a statement. "However, we remain convinced the industry must take additional supply side actions for a global balance to be achieved."
Since the economic downturn late last year, metal demand and prices have plummeted and Century has cut production capacity at its Ravenswood, W.Va., and Hawesville, Ky., aluminum smelters. Kruger now says that "despite recently improving metal prices, we believe the balance of risk remains on the downside."
quoted from: Purchasing.com
Read more...Wednesday, July 22, 2009
Ban on Raw Sugar Import Causes Rise in Price
ISLAMABAD: Retail price of sugar shot up to its highest ever level of over Rs48 per kg after the government rejected an advice from the ministry of industries to lift a ban on import of raw sugar in view of poor sugarcane crop.
Sources told Dawn that the continuing ban, despite repeated requests from the ministry and sugar mills, had benefited big farmers, some federal ministers among them, who sold sugarcane at prices higher than the official rate.
The official price was set at Rs80 per maund, but farmers sold sugarcane to millers at Rs100 to Rs120 because of the shortage.
For the next season, the provincial governments have increased the price to
Rs100. This is likely to cause a further increase in the price of sugar.
According to an official, the price is likely to go up in Ramazan because Utility Stores cater to the needs of only about 10 per cent of consumers.
The government had decided to keep the price of sugar at the stores at Rs38 per kg, the official added.
Sources in the industries ministry said the federal cabinet and the Economic Coordination Committee (ECC) had been informed in advance that a shortage of cane would lead to an increase in price.
‘We moved summaries to the highest forums, but these were turned down with the contention that import of raw sugar would lower the profit of farmers,’ the sources said.
Millers had also asked the government to import up to 400,000 tons of raw sugar, at least half of it during November last year when the crushing of the new crop began.
According to the sources, imported raw sugar costs $80 to $90 a ton less than refined sugar. ‘If we had imported raw sugar at that time the sugar price could have gone down by at least Rs5 per kg,’ the sources said.
An official said that the ministry was now proposing to allow the import to meet the shortage next year. ‘We are proposing to the government to allow the private sector to import raw sugar.’
For keeping the sugar price under control, the government will have to raise the subsidy for consumers and increase supply to utility stores from the current 30,000 tons to 100,000 tons.
The retail rate is hovering between Rs44 and Rs48 in major cities. However, some cities have witnessed a price of more than Rs50 per kg in the open market and consumers in some rural areas are paying up to Rs60.
Sources told Dawn that the continuing ban, despite repeated requests from the ministry and sugar mills, had benefited big farmers, some federal ministers among them, who sold sugarcane at prices higher than the official rate.
The official price was set at Rs80 per maund, but farmers sold sugarcane to millers at Rs100 to Rs120 because of the shortage.
For the next season, the provincial governments have increased the price to
Rs100. This is likely to cause a further increase in the price of sugar.
According to an official, the price is likely to go up in Ramazan because Utility Stores cater to the needs of only about 10 per cent of consumers.
The government had decided to keep the price of sugar at the stores at Rs38 per kg, the official added.
Sources in the industries ministry said the federal cabinet and the Economic Coordination Committee (ECC) had been informed in advance that a shortage of cane would lead to an increase in price.
‘We moved summaries to the highest forums, but these were turned down with the contention that import of raw sugar would lower the profit of farmers,’ the sources said.
Millers had also asked the government to import up to 400,000 tons of raw sugar, at least half of it during November last year when the crushing of the new crop began.
According to the sources, imported raw sugar costs $80 to $90 a ton less than refined sugar. ‘If we had imported raw sugar at that time the sugar price could have gone down by at least Rs5 per kg,’ the sources said.
An official said that the ministry was now proposing to allow the import to meet the shortage next year. ‘We are proposing to the government to allow the private sector to import raw sugar.’
For keeping the sugar price under control, the government will have to raise the subsidy for consumers and increase supply to utility stores from the current 30,000 tons to 100,000 tons.
The retail rate is hovering between Rs44 and Rs48 in major cities. However, some cities have witnessed a price of more than Rs50 per kg in the open market and consumers in some rural areas are paying up to Rs60.
quoted from: DAWN.com
Read more...Oil Rises as Earnings Boost Economic Outlook
NEW YORK - Oil touched a two-week high above $65 a barrel on Tuesday as a slew of rosy corporate earnings reports fed into hopes for an economic recovery that could revive global energy demand.
U.S. crude gained 74 cents to settle at $64.72 a barrel, after climbing to a two-week high of $65.53. London Brent rose 43 cents to $66.87.
The rise in the oil market came as a raft of major companies, including Caterpillar Inc and Merck & Co, reported stronger-than-expected results in the second quarter that many analysts took as a sign of economic improvement.
Weakness in the U.S. dollar also supported commodities markets, analysts said, in part by strengthening the purchasing power of buyers using other currencies.
“The (crude) market is trading more off the equities than the dollar, with the economic indicators and earnings lending support to sentiment,” said Andy Lebow, a broker at MF Global in New York.
News that a powerful storm hobbled two oil refineries in Alberta also played into gains, tightening up already thin gasoline stockpiles in the Canadian province. Petro-Canada said Tuesday it was making arrangements to have additional gasoline supplies shipped into the area.
The front-month August U.S. contract expires at the close of trade Tuesday and will be replaced by the September contract, which rose 32 cents to $65.61 a barrel.
The American Petroleum Institute release its weekly figures after oil settled Tuesday, showing U.S. crude stockpiles rose unexpectedly by 3.1 million barrels.
Oil stocks in industrialized countries equated to 62.5 days of demand cover at the end of May, according to the latest figures from the International Energy Agency — around 10 days more than the Organization of the Petroleum Exporting Countries considers comfortable.
Algerian Energy and Mines Minister Chakib Khelil on Monday predicted prices would stay in a $65-$70 range this year as long as the market remained oversupplied and said OPEC could cut output when it next meets in September.
U.S. crude gained 74 cents to settle at $64.72 a barrel, after climbing to a two-week high of $65.53. London Brent rose 43 cents to $66.87.
The rise in the oil market came as a raft of major companies, including Caterpillar Inc and Merck & Co, reported stronger-than-expected results in the second quarter that many analysts took as a sign of economic improvement.
Weakness in the U.S. dollar also supported commodities markets, analysts said, in part by strengthening the purchasing power of buyers using other currencies.
“The (crude) market is trading more off the equities than the dollar, with the economic indicators and earnings lending support to sentiment,” said Andy Lebow, a broker at MF Global in New York.
News that a powerful storm hobbled two oil refineries in Alberta also played into gains, tightening up already thin gasoline stockpiles in the Canadian province. Petro-Canada said Tuesday it was making arrangements to have additional gasoline supplies shipped into the area.
The front-month August U.S. contract expires at the close of trade Tuesday and will be replaced by the September contract, which rose 32 cents to $65.61 a barrel.
The American Petroleum Institute release its weekly figures after oil settled Tuesday, showing U.S. crude stockpiles rose unexpectedly by 3.1 million barrels.
Oil stocks in industrialized countries equated to 62.5 days of demand cover at the end of May, according to the latest figures from the International Energy Agency — around 10 days more than the Organization of the Petroleum Exporting Countries considers comfortable.
Algerian Energy and Mines Minister Chakib Khelil on Monday predicted prices would stay in a $65-$70 range this year as long as the market remained oversupplied and said OPEC could cut output when it next meets in September.
quoted from: Khaleej Times
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