Moving into May, European spot monomer markets either followed a stable trend or declined over the week despite the recent recovery observed in energy markets as many players were on the sidelines amidst extended holidays from end April to early May as per the pricing service of ChemOrbis. Spot ethylene prices managed to hold steady amidst several cracker outages in the region, while propylene costs lost further ground driven by persistently cautious demand from the derivative markets.
In upstream markets, crude oil futures on NYMEX erased some part of the losses they posted during April and climbed more than $2.5/barrel for June delivery cargos week over week. They also indicated a gain of around $1/barrel when compared to early April. ICE Brent crude futures soared more than $1.5/barrel last week although they still remained almost $2/barrel below a month ago level.Spot naphtha costs on CIF NWE basis also edged up in Europe on a weekly basis buoyed by the rebound in the energy complex although they continued to represent nearly a $40/ton drop with respect to one month ago.
In the ethylene market, spot offers were flat on FD NWE basis week over week after posting relentless drops in the previous weeks. The main trigger behind this trend was deemed as the outages at a couple of cracker operators including Shell and Total in Europe. Shell’s force majeure on the output from its cracker in the Netherlands, which was declared in late April, remained in place. In addition, Total Petrochemical took its cracker in France offline at the end of last week, according to market sources. Both crackers, with respective capacities of 940,000 tons/year and 525,000 tons/year are reportedly expected to resume operations this week. Although these unexpected outages helped ethylene costs to stabilize, they still indicated a large decrease of €150/ton when compared to the levels of a month ago.
In the propylene market, the production issues failed to create a firmer trend since the market was dominated by cautious buying interest from the derivatives markets which were weighed down by calm end users’ demand according to ChemOrbis. Moreover, some cracker operators were said to have lifted their operating rates considering the current supply constraints, market sources in the region said. Spot propylene prices recorded a noticeable drop of €70/ton on FD NWE basis from the previous week whereas they stood only €10/ton below early April levels.