We are seeing some stability in ethylene and propylene pricing in the US to start the week, and with the steady rise in crude prices and the Monday jump in natural gas prices, this is not surprising. As we noted in yesterday’s Weekly Catalyst, there is enough incentive to export ethylene from the US to Asia – most likely Southeast Asia rather than North Asia, and this could offer support for those with surplus ethylene in the US today.
Source: Bloomberg, C-MACC Analysis, October 2021
Separately, China appears to be pricing its higher power costs through caustic soda rather than chlorine, as shown in the exhibit below, but the lack of movement in chlorine pricing could be because it is a limited market, and the higher costs and lower availability are certainly being reflected in local PVC prices which are now higher than US PVC prices. Otherwise, we see multiple price increase announcements for intermediates – driven by both demand and rising costs. Year-end inventory reduction goals will likely be ignored by most chemical companies and their customers this year as in many cases inventories are already too low, and fear of both shortages and higher prices should keep chemical and polymer users buying.
Source: Sunsirs, October 2021