The weakness in US monomer pricing has stalled this week, and buyers and sellers may be exploring marginal export or derivative export opportunities at these levels. Further weakness will come if attempts to export only serve to undermine pricing in the markets they are targeting. Underlying demand remains very strong and this is a supply-driven issue as US ethylene plants run back towards full rates and incremental refinery supply impacts the benzene and propylene markets. See today's report which includes detailed commentary on methanol in addition to the products in the chart.
Source: Bloomberg, C-MACC Analysis, May 2021
The Lotte Chemical MEG issue shows that we still have weather-related issues in the US – this was not a hurricane but just persistent heavy rain that was at its worst east of Houston along the US Gulf. So, with demand high but also supply rising, will the next move be up or down, and does it all come down to weather again?
