Académique Documents
Professionnel Documents
Culture Documents
REPORT - AROMATICS
February 22nd, 2008
CONTENTS
Page
Current Prices
Price Forecasts-Benzene
Price Forecast- Xylenes
Gasoline/Naphtha
Toluene
Benzene
Cumene/Phenol
Cyclohexane
Styrene
Polystyrene
ESP
Mixed Xylene
Orthoxylene
Paraxylene
PTA/PET
2
3
4
5
6
8
10
12
13
15
16
17
18
19
22
MARKET SUMMARY
West Europe Benzene Derivatives Overview
Dollars per Ton
2000
Forecast
1600
1200
800
400
0
Jan-07
Jul-07
Benzene Spot
Jan-08
Styrene Spot
Jul-08
Jan-09
Jul-09
How things have changed in the last month. All aromatics prices are on
INTERNET ACCESS
www.cmaiglobal.com
email-EMRA@CMAIglobal.com
CONSULTANTS
Alex Lidback - Benzene/Toluene/
Cumene/Phenol
ALidback@cmaiglobal.com
Caroline Duggan- Benzene/
Toluene/Styrene
CDuggan@cmaiglobal.com
Matthew Thoelke - Styrene/
Polystyrene/EPS/ABS
MThoelke@cmaiglobal.com
Barry Davies- Cyclohexane
BDavies@cmaiglobal.com
600
400
200
0
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
MX Spot
Toluene Nitration Grade
This report is for the exclusive use of the client company. Distribution outside of the client company is strictly
prohibited without the prior wirtten consent of Chemical Market Associates, Inc. (CMAI).
The prices presented herein are strictly the opinion of CMAI and are based on
information collected within the public sector and on assessments by CMAI staff.
CMAI MAKES NO GUARANTEE OR WARRANTY AND ASSUMES NO LIABILITY AS TO THEIR USE.
Copyright CMAI 2008 All Rights Reserved
Current Prices
Assumptions
W Europe
Crude Oil
$/bbl
W Europe
Naphtha
$/t
6. Brent
6. CIF
07 Oct
Nov
Dec
08 Jan
Feb
82.4
92.4
91.3
92.2
92.6
746
825
838
829
817
07 Q1
Q2
Q3
Q4
58.2
68.7
68.7
88.7
555
670
670
803
Notes
$/
W Europe
Toluene
$/t
6. Regular
6. blend value
746
842
814
816
829
723
832
805
805
824
1.42
1.47
1.46
1.47
1.47
798
856
815
834
811
566
754
754
801
541
712
712
786
1.31
1.35
1.35
1.45
648
895
895
823
$/t
$/t
6. Premium CIF
Base Aromatics
Toluene
Benzene
W Europe
Contract
/t
Notes
07 Oct
Nov
Dec
08 Jan
Feb
Spot
$/t
Exchange Rate
W Europe
Gasoline
US
Contract
Spot
Cts/Gal
Cts/Gal
Mixed Xylenes
W Europe
Spot
$/t
US
Spot
Cts/Gal
W Europe
Spot
$/t
U.S.
Spot
Cts/Gal
Monthly
6. Nitration
6. Nitration
713
722
694
702
737
1031
1035
970
1035
1135
349
348
335
345
354
349
342
324
348
388
775
877
853
886
890
280
294
278
294
307
851
914
884
942
940
273
296
294
307
302
1013
1135
1135
1012
353
395
395
344
350
391
391
338
765
860
860
835
259
298
298
284
853
959
959
883
281
321
321
288
Averaged
776
851
851
710
07 Q1
Q2
Q3
Q4
W Europe
Contract
Delta
/t
/t
Notes
07 Oct
Nov
Dec
08 Jan
Feb
07 Q1
Q2
Q3
Q4
Benzene Derivatives
Styrene
Phenol
Cyclohexane
W Europe
Monthly
Ave. Acquisition
/t
/t
W Europe
to Benzene Distribution
848
857
829
847
882
Averaged
916
989
989
845
135
135
135
145
145
1075
1085
1053
1070
1105
970
979
950
977
1012
140
138
138
135
1130
1213
1213
1071
1030
1108
1108
966
Paraxylene
W Europe
Contract
Spot
/t
$/t
Notes
PTA
US
Spot
Cts/lb
W Europe
Contract
/t
Polystyrene
EPS
W Europe
Contract
/t
Contract
/t
Spot
$/t
W Europe
Contract
/t
Monthly
6. FOB
GP Crystal
1033
1008
982
1021
1058
Averaged
1067
1150
1150
1007
1284
1282
1266
1348
1436
1280
1260
1255
1280
1300
1310
1275
1270
1285
1335
1215
1409
1409
1277
1280
1355
1355
1265
1607
1583
1583
1285
Xylenes Derivatives
DMT
PET
Orthoxylene
W Europe
W Europe
Contract Contract
Spot
/t
/t
$/t
W Europe
Contract
Spot
/t
$/t
PAN
W Europe
Contract
Spot
/t
/t
Monthly
07 Oct
Nov
Dec
08 Jan
Feb
760
760
772
793
785
1005
1058
1035
1061
1060
45.4
49.2
48.2
48.7
47.5
904
902
910
915
902
823
823
831
890
884
1147
1146
1171
1161
1102
975
975
998
988
935
735
720
720
760
750
990
1014
960
0
0
1030
1030
1030
1060
1050
1185
1100
1080
1050
707
07 Q1
Q2
Q3
Q4
827
893
893
764
1059
1178
1178
1033
48.2
53.5
53.5
47.6
912
991
991
905
884
861
861
826
1114
1165
1165
1155
949
975
975
983
1027
1139
1139
988
1027
1167
1167
1030
1223
1358
1358
1122
5. Averaged
General Notes:
1.
2.
3.
4.
5.
6.
Page 2
777
880
880
725
PRICE FORECAST
Gasoline
Naphtha
$/t
$/t
$/t
Notes
Brent
Dubai
CIF
Premium
Regular
08 Q1
Q2
Q3
Q4
09 Q1
Q2
2005
2006
2007
2008
2009
2010
2011
2012
92.5
91.2
84.9
82.2
79.1
78.2
54.7
65.7
72.6
87.7
77.5
67.7
63.2
62.3
87.8
86.2
80.6
77.8
74.0
74.2
49.3
61.5
68.4
83.1
73.4
64.2
59.6
58.6
825
826
776
755
721
707
476
565
676
796
703
608
563
555
836
901
805
742
718
779
536
632
710
821
728
639
596
586
822
853
776
722
693
738
498
588
678
793
700
618
576
567
859
1053
885
788
795
944
666
784
809
896
823
698
649
636
HDA
Benzene
Contract
/t
Notes
08 Feb
Mar
Apr
May
Jun
Jul
2005
2006
2007
2008
2009
2010
2011
2012
Spot
$/t
Margin
/t
1135
1178
1163
1136
1076
1028
848
955
1047
1070
971
836
777
760
Margin
$/t
958
1025
905
926
882
928
698
882
896
954
873
792
755
769
41
-85
-31
90
37
-68
-5
55
44
4
0
46
60
88
Notes
08 Q1
Q2
Q3
Q4
09 Q1
Q2
2005
2006
2007
2008
2009
2010
2011
2012
1.
2.
3.
4.
Cyclohexane
Phenol
Spot
$/t
Contract
/t
Hydrogen
/t
Spot
/t
Nitration
Monthly
3. On-purpose
Distribution
123
53
-19
-105
-132
-63
22
0
53
6
-9
3
2
2
-17
19
46
80
92
48
116
130
79
31
69
27
21
18
890
936
957
954
942
819
636
775
812
879
822
776
725
712
882
946
939
921
880
837
781
885
911
872
847
777
742
759
1562
1631
1666
1648
1593
1524
1100
1239
1312
1548
1423
1419
1421
1472
1105
1170
1150
1130
1080
1040
973
1018
1134
1078
988
1011
987
1023
Mixed Xylenes
Spot
$/t
1.470
1.470
1.461
1.433
1.405
1.376
1.248
1.256
1.370
1.459
1.362
1.300
1.250
1.200
Margin
/t
Monthly
737
801
791
773
732
699
671
741
774
730
713
643
622
633
Pygas Toluene
Exchange Rates
$/
Styrene
Contract
/t
Polystyrene
Margin
/t
Monthly
5,6
1063
1122
1044
1016
1021
1047
950
1051
1078
1061
1021
934
931
982
-43
-6
-6
-6
3
3
46
39
-5
-15
3
2
21
43
Monthly
/t
Margin
/t
1303
1333
1257
1230
1223
1247
1143
1188
1307
1281
1227
1130
1130
1180
140
117
114
113
103
101
69
6
130
121
103
77
72
73
Page 3
Margin
/t
1012
1077
1063
1044
1000
965
933
980
1030
998
952
980
950
960
202
208
197
199
190
188
255
178
238
189
125
204
214
233
EPS
Contract
/t
Margin
/t
1333
1427
1393
1360
1340
1380
1223
1435
1475
1378
1363
1240
1310
1350
83
125
163
153
127
143
42
161
206
131
145
85
146
134
Ave. Acq.
/t
PRICE FORECAST
Naphtha
$/t
$/t
$/t
Gasoline
Notes
Brent
Dubai
CIF
Premium
Regular
08 Q1
Q2
Q3
Q4
09 Q1
Q2
2005
2006
2007
2008
2009
2010
2011
2012
92.5
91.2
84.9
82.2
79.1
78.2
54.7
65.7
72.6
87.7
77.5
67.7
63.2
62.3
87.8
86.2
80.6
77.8
74.0
74.2
49.3
61.5
68.4
83.1
73.4
64.2
59.6
58.6
825
826
776
755
721
707
476
565
676
796
703
608
563
555
836
901
805
742
718
779
536
632
710
821
728
639
596
586
822
853
776
722
693
738
498
588
678
793
700
618
576
567
859
1053
885
788
795
944
666
784
809
896
823
698
649
636
Paraxylene
PTA
PET
Mixed Xylenes
Spot
$/t
Exchange Rates
$/
1.470
1.470
1.461
1.433
1.405
1.376
1.248
1.256
1.370
1.459
1.362
1.300
1.250
1.200
Orthoxylene
Notes
Contract
/t
MEG
Margin
/t
Contract
/t
Margin
/t
-58
-141
-59
14
-45
-147
-41
-17
18
-61
-92
-29
-23
30
1048
926
842
758
712
700
843
818
898
894
692
650
610
690
487
372
297
194
155
156
416
342
389
338
127
116
82
146
9. Averaged
08 Q1
Q2
Q3
Q4
09 Q1
Q2
2005
2006
2007
2008
2009
2010
2011
2012
958
1025
905
926
882
928
698
882
896
954
873
792
755
769
41
-85
-31
90
37
-68
-5
55
44
4
0
46
60
88
798
859
828
846
793
811
745
895
830
833
787
731
734
752
-122
-194
-86
-28
-84
-191
-64
-40
-55
-108
-134
-74
-64
-70
915
972
961
952
905
923
845
959
944
950
904
814
849
919
52
63
66
57
67
68
96
40
70
59
67
27
49
87
1122
1173
1147
1129
1095
1112
1132
1154
1137
1143
1114
1050
1075
1175
-58
-11
2
14
24
30
-7
-31
-17
-13
47
50
52
69
760
805
759
783
729
746
670
801
811
777
721
718
707
781
Page 4
GASOLINE / NAPHTHA
$ Per Ton
900
Forecast
Forecast
90
800
80
800
700
70
600
60
600
500
50
40
400
30
400
300
20
200
200
10
100
0
Jan-07
0
Jul-07
Jan-08
Jul-08
Jan-09
Gasoline Premium
Jul-09
0
Jan-07
Gasoline Regular
$ Per Ton
350
Forecast
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Naphtha cif
300
200
250
150
200
150
100
100
50
50
0
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
$ Per Ton
0
Jan-07
$ Per Ton
70
120
Forecast
100
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
60
80
50
60
40
40
30
20
20
10
-20
-40
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
0
Jan-07
Jul-09
Jul-07
Page 5
Jan-08
Jul-08
Jan-09
Jul-09
TOLUENE
TOLUENE
Toluene Prices
1100
1000
900
800
700
600
500
400
Jan-06
Jul-06
Toluene spot
Jan-07
Octane
HDA
Jul-07
TDP
Jan-08
STDP
Page 6
INDEX
190
180
170
160
150
140
130
120
110
100
90
80
Jan-06
Jul-06
Jan-07
$ Per Ton
1200
Jul-07
Jan-08
800
600
400
200
0
-200
Incremental calculated between 95 and 98 RON unleaded gasoline
Jul-05
Jan-06
Jul-06
Spot less BV
Inc. Blend Value
Jan-07
Spot
Jul-07
For some time now the profitability of the reformer for octane has been at either breakeven or
negative, for the last few months it has remained
negative as the graph shows.
BTX at blend values have increased significantly
this month. BTX values relative to both octane
and naphtha have declined. (Naphtha price levels
have been reaching record highs of late).
We do expect that seasonality will come into
place. As evident by the graph there is an upward
trend relative to blend values. What is also evident in the graph is the downward trend of BTX
extraction over the last year. If the reformers are
having such a difficult time it will be interesting
to see how companies react but we should expect
a rebound in the coming months.
The toluene market in Europe is fairly wellbalanced, despite some supply limitations. For the
next few months toluene demand will be strong
as gasoline blenders start to build stocks for the
U.S. driving season and therefore the market will
remain balanced. As a result we expect toluene
prices to continue rising in the coming months
hovering around record levels on the back of
crude entertaining itself around $100 per barrel.
We anticipate that toluene will flow to the U.S.
in Q1 and prices will remain lower than those
in the U.S.
1000
-400
Jan-05
TOLUENE
Jan-08
Of late, activity has been primarily from trade with little interest from both producers and consumers as arbitrage opportunities have resurfaced. Not that long ago we saw a flow of product leave Europe for Asia as well
as India and the Middle East, but now we are on the verge of seeing the arbitrage open up from Europe to the
USG. With the recent market movements tracking crude it almost looked as though this arbitrage opportunity
would be short-lived; however, U.S. values have only just recently surged sharply upwards.
The market at the moment appears to be fairly well balanced although on the supply side product availability has
been fairly limited partly due to reduced production and this is likely to remain so in the run up to forthcoming
turnarounds.
Page 7
BENZENE
BENZENE
February benzene contract prices settled at 737 per ton based on a U.S. dollar price of $1092 per ton, an increase
of 35/$59 per ton from the January benzene contract price of 702/$1033 per ton.
Over the last few months we maintained that benzene prices relative to energy and naphtha were fairly low.
Therefore, we were expecting for prices to increase but what has transpired over the past month has been faster
and higher than expected. Recently, spot benzene prices have been hovering around $1,200 per ton. To sum
things up, in one month spot benzene prices have increased by $170 per ton and the benzene to naphtha spread
rose by $100 per ton to $335 per ton.
The increase in naphtha spreads indicate that this increase has to do with energy. There are a number of reasons.
There was talk of pygas tightness due to some cracker operating issues as well as a shift to butane. However, we
believe this was not a major issue. We do believe some other production issues have been taking place. In the
end, there were many bullish factors and no one was bucking the trend as the old clich the trend is your friend
appears to have reared its headonce again. Hence, we are now near a record price which was set at $1225 per
ton in May 2007. Entering March contract price negotiations, we should expect a hefty increase.
Thousand Tons
120
% Lost Capacity
16%
Forecast
Page 8
BENZENE
The benzene to naphtha spread has increased considerably over the past month. Only two months
1400
Forecast
ago the spread was at around $100 per ton or
1200
lower, falling to levels not seen since early 2002.
We knew this was not sustainable and an increase
1000
was imminent. A month ago, the spread was $230
800
and is now at around $335 per ton.
CMAIs forecast in the near term is that there is
600
too much momentum in the market and the spread
400
will remain above $300 per ton until June. The
increase can also be attributed to a seasonal up200
swing from gasoline values. Benzene availability
0
will continue to improve as more benzene enters
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
the market. Demand growth is expected to be
~
Delta
Benzene Spot
Naphtha
capped by recent economic woes.
We do not believe spreads starting in June will recover to over $300 per ton throughout the forecast period, which
has now graphically been extended through 2009. The reason: more and more benzene availability.
West Europe Benzene and Naphtha Delta
The
difficulty for these units is that the gasoline
-200
season will give a boost to toluene prices and blend
-300
values which will keep pressure on these facilities.
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Therefore, we do not believe HDA margins will
Blend Value
Spot
T / X Stream
~
move into the black until the middle of the year.
For 2008 and 2009, we do not expect HDA variable margins to be all that attractive considering the growing length
in the global benzene market although, yet not felt. HDA should continue to be a key price marginal indicator for
the foreseeable future as it will tend to be a key market balancing benzene route. These types of dynamics are not
surprising considering these types of facilities have alternatives for their feedstocks into a large gasoline pool.
West Europe HDA Variable Margins
Toluene at Spot, Blend Value and T/X Stream
Page 9
CUMENE / PHENOL
CUMENE / PHENOL
The supply side continues to show signs of improvement. Ineos Phenol at Antwerp as in restart mode
on its second unit. The supply side continues to
100
dominate. All local producers are selling everything
they make. Last year, imports, primarily from the
80
U.S., helped balance the system, which allowed the
market to barely keep its snorkel above the water
60
line. With a soft U.S. economy, partly due to a weak
40
construction market, there has been ample product
to ship to Europe. In the end, inventories remain
20
low and balances are tight
Thousand Tons
800
700
600
500
400
300
200
100
0
% Operating Rate
120
Forecast
Thousand Tons
700
600
500
400
300
200
100
0
-100
% Lost Capacity
25%
Forecast
50
20%
40
15%
30
10%
20
5%
10
0%
Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Lost Capacity
% Lost Capacity
Page 10
Forecast
900
800
700
600
500
400
300
200
100
0
Jan-07
Jul-07
BZ Contribution
Jan-08
Jul-08
C3 Contribution
Jan-09
Jul-09
CUMENE / PHENOL
The graph shows the effects of benzene and
propylene on cumene/phenol production
costs. The line in the graph shows phenol raw
material costs (not including variables and
fixed costs) including an acetone credit. The
acetone value is based on discounted prices.
The graph illustrates that raw materials are
going strong. Propylene saw a sharp increase
in the first quarter and benzene as of late is
once again on one of its impressive runs with
spot prices hovering around $1200 per ton.
Therefore, costs will only increase in the near
term before the expected relief in the second
half of the year.
As you may recall from last months report, we believed that benzene prices had to rise as prices were too low
relative to energy/naphtha. However, not this soon and this high. Please note that CMAIs production economics analysis does not include corporate overhead or depreciation suggesting margins are lower than shown.
One difficult issue is that producers continue to lag on the acetone versus propylene front. In the first quarter,
propylene prices rose by 57 per ton while acetone only achieved a 15 per ton increase.
Page 11
CYCLOHEXANE
CYCLOHEXANE
The West European cyclohexane market showed
some tightness in the middle of the month as
a result of some reported production difficulties at one supplier and some stock building in
anticipation of future production constraints for
two producers in March and later in Q2.
One supplier also suffered delivery problems as
a result of a defective bridge in Hamburg.
However, there were no reports of any shortages
in the market and at the end of the month spot
lots were being offered by traders and imports
were arriving from the U.S. and Argentina.
Forecast
1800
1600
1400
1200
1000
800
600
400
200
0
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
Ammonia
Margin over CHX + Amm
800
600
400
200
0
Jan-07
Jul-07
Jan-08
Delta
Jul-08
Benzene
Jan-09
Jul-09
Cyclohexane
Forecast
140
120
100
80
60
40
20
0
Jan-07
Jul-07
H2 Fuel Value
Jan-08
Jul-08
Jan-09
Jul-09
CHX Delta
Page 12
STYRENE
STYRENE
West European Styrene Supply/Demand
Thousand Tons
% Oper. Rate
95%
1800
1600
1400
90%
1200
1000
85%
800
600
80%
400
200
0
75%
07
Q2
Production
Q3
Q4
08
Demand
Q2
Q3
Capacity
Q4
09
Nameplate
Q2
Q3
Effective
Q4
% Lost Capacity
16%
Forecast
70
14%
60
12%
50
10%
40
8%
30
6%
20
4%
10
2%
0%
Jan-06 Apr-06 Jul-06 Oct-06 Jan-07 Apr-07 Jul-07 Oct-07 Jan-08 Apr-08 Jul-08 Oct-08
Lost Capacity
% Lost Capacity
Page 13
STYRENE
0
-200
Jan-07
Jul-07
Jan-08
R.M. Cost
Margin
Jul-08
Jan-09
Variable Cost
Average Acquisition
Jul-09
Fixed Cost
European Spot Price
250
200
150
100
50
0
-50
-100
06
Q2
Q3
Q4
07
Ethylene
Q2
Q3
Benzene
Q4
08
Styrene
Q2
Q3
Q4
09
Q2
Q3
Q4
Total Margin
Forecast
25%
20%
15%
10%
5%
0%
-5%
-10%
-15%
Jan-07
Jul-07
Jan-08
Styrene Conventional
Jul-08
PSE
Jan-09
EPS
Jul-09
ABS
Page 14
The CMAI average acquisition price for European styrene in February has increased from
Januarys level of 925 per ton to 972 per
ton. There has been a slight improvement on
industry profitability; however, conventional
styrene units have been losing money for the
last several months. The increase in spot
prices has supported a higher value against
feedstock.
Contractual prices for January settled in the
first couple of weeks of the month at 1038,
1070 and 1075 per ton on an FD basis. The
FCA price concluded at 1070 per ton, equivalent to 1077 per ton FD, giving a monthly
CMAI range of 1057.5-1082.5 per ton FD
(barge-railcar delivery), which constitutes an
increase of 36.5 per ton.
The uplift in benzene values versus naphtha
for February, which were even more noticeable in the spot markets, has resulted in an improved integrated margin picture for styrene
production. However, higher naphtha prices
are impacting steam cracker economics and
resulting in a reduced margin for ethylene
production compared to January.
Styrene margins are forecast to improve in
Q2 and for the remainder of 2008 versus Q1
levels; however, the loss of margin in benzene
production and steam cracker operations will
continue to leave integrated economics unattractive, although not negative
POLYSTYRENE
POLYSTYRENE
West Europe Polystyrene Supply/Demand
Thousand Tons
700
% Oper. Rate
100%
600
90%
500
80%
400
300
70%
200
60%
100
0
50%
07
Q2
Q3
Q4
Production
08
Q2
Demand
Q3
Capacity
Q4
09
Q2
Q3
% Operating Rate
Q4
1400
1200
1000
800
600
400
Jan-07
Jul-07
Jan-08
PS
Jul-08
PP
Jan-09
PET
Jul-09
Page 15
EPS
EPS
The uncertainty in the EPS markets during January, with some producers seeing an improved
demand picture whilst others were seeing ongoing struggles in their markets, has resolved
90%
itself with widespread improved demand for
European product.
80%
The traditional seasonality in demand, particularly in central and eastern European markets,
70%
continues to keep some customers away, although for most western European producers
60%
demand is picking up ahead of the spring building season.
50%
Strong demand in February can be part explained
07
Q2
Q3
Q4
08
Q2
Q3
Q4
09
Q2
Q3
Q4
by another mild winter; however, some inven~
Production
Demand
Capacity
% Operating Rate
tory build is likely.
Stocks downstream from producers will have been run down in the second half of 2007as prices declined they
will need to be partially replenished ahead of the spring and summer.
West Europe EPS Supply/Demand
Thousand Tons
400
350
300
250
200
150
100
50
0
% Oper. Rate
100%
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
South Korea
3.0
1.6
1.4
1.7
1.5
1.2
0.6
0.1
0.0
0.0
0.1
Taiwan
5.0
2.7
3.0
1.1
2.7
2.5
1.5
1.1
0.8
0.2
0.6
*
*
China
6.8
5.5
6.5
5.6
6.4
4.5
4.0
1.5
0.5
0.4
0.3
0.3
Rest of World
0.4
0.7
0.6
0.3
0.7
0.4
1.1
-0.7
2.3
0.8
0.4
0.3
Jan-07 Feb-07 Mar-07 Apr-07 May-07 Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07
South Korea
2.6
2.1
1.8
1.7
1.3
1.2
1.3
0.7
0.2
0.2
Taiwan
3.9
5.6
2.1
5.3
1.5
3.0
1.9
1.9
0.7
0.6
*
*
China
5.5
4.1
6.1
6.3
4.3
5.8
3.6
2.2
0.9
0.2
Rest of World
3.7
0.9
1.8
1.5
1.6
1.9
1.1
2.0
2.2
3.0
Total Imports
15.8
12.7
11.7
14.7
8.7
11.8
7.9
6.8
4.0
4.0
3.5
2.4
Typically Transit Time From Asia to the West Europe is 6-8 weeks.
Improved demand in Europe is stimulating some interest for Asia to export; however, the current price level
makes exports unattractive for Asian producers despite a considerably lower styrene price. It is likely that as
Europeans look to expand margins in Q2 Asian interest will increase, although there will need to be significant
incentive to cover the risk of a market and price downturn.
Price levels for February have moved up versus January and producers have managed to
secure an increase in margin, at least versus
contract styrene. The price level for February
is 1335-1375 per ton, an increase of 50 per
ton from January.
The improvement in demand, a little earlier
than we had forecast, should allow producers to
cover styrene increases expected in March and
then further margin expansion during the second
quarter. Price levels will remain at import parity
until the wave of new capacity comes on line at
the start of 2009.
1600
1400
1200
1000
800
600
400
200
0
Jan 07
Jul 07
Jan 08
Raw Materials
Contract Margin
Jul 08
Variable Costs
Contract Price
Jan 09
Fixed Costs
Jul 09
Page 16
MIXED XYLENES
MIXED XYLENES
Mixed Xylene Spot Prices West Europe Less U.S.
Dollars Per Ton
100
Forecast
80
60
40
20
0
-20
-40
-60
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
The chart shows that oil refiners had an improving price incentive in February to separate
xylenes from reformate.
While xylene prices remained remarkably
steady in February, blend values have generally
decreased. The premium for xylene over blend
value, therefore, increased from $102 per ton in
January to $122 so far in February.
For March, this premium is expected to shrink to
$35 per ton as higher xylene prices are outpaced
by big increases for blend value ahead of the
driving season.
Forecast
1000
800
600
400
200
-200
Jan-07
Jul-07
Spot Price
1000
800
600
400
200
Jul-08
Jan-09
Jul-09
Blend Value
Jan-08
Page 17
ORTHOXYLENE
ORTHOXYLENE
The European February contract price was settled at 750 per ton free-delivered, a reduction
1400
Forecast
of 10 per ton from January. In early February,
1200
any producer ambitions for an increase waned
as crude prices dipped while the OX supply1000
demand balance weakened partly due to an
800
outage at Arkema.
The chart shows European producers retained
600
a reasonable price incentive to produce incre400
mental OX during February. The OX-MX
spread for February is expected to average
200
$162 per ton.
0
We have increased our forecast for the March OX
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
contract price from a rollover to an increase of 20.
~
MX OX spread
MX Spot
OX Contract
The change reflects current record-high prices
for gasoline, which may provide upward price pressure in negotiations due next week.
West Europe MX/OX Price Movement
PX / OX Price Comparison
Dollars per Ton
1400
300
Forecast
250
1200
200
1000
150
800
100
600
50
0
400
-50
200
-100
0
Jan-07
-150
Jul-07
Jan-08
PX-OX (RHS)
Jul-08
WEP OX
Jan-09
WEP PX
Jul-09
Forecast
1200
1000
800
600
400
200
0
Q106
Q2
Q3
Q4
Q107
Q2
Q3
Q4
Q108
PAN Contract
Q2
Q3
Q4
Q109
PAN Margin
Q2
Q3
Q4
Page 18
The chart shows the PX-OX spread has remained at about $50 per ton, which is less than
the historical average price delta between the
two isomers.
Continuation of low spreads into January/
February suggests a possible return to the
market conditions of 2007 when the delta was
either very low or negative. Those conditions
meant that isomer producers with operational
and contractual flexibility had a considerable
price incentive to increase OX recovery at the
expense of PX.
For March, our forecasts call for the PX-OX
delta to increase to $65 per ton. This increase
would mean that PX has not actually regained
its historical status as the preferred isomer to
produce.
The chart shows phthalic anhydride margins
remained high for most of 2007. More than
anything, this was due to demand consistently
exceeding expectations.
Since December 2007, PA margins have fallen
back towards more normal levels, especially as
new annual contracts have been implemented.
In particular, many annual 100% OX-related
contracts have been replaced by 50% OXrelated and 50% market-related contracts.
For 2008, on balance we expect PA margins
to be somewhat lower than 2007 as growth
in demand is expected to ease. However, this
forecast is already under review as import levels
appear to be falling and more PA turnarounds
are being scheduled for Q2/Q3.
PARAXYLENE
PARAXYLENE
Asia vs WEP PX Contract Prices
Dollars Per Ton
1400
Forecast
1300
50
1200
40
1100
30
1000
20
900
10
800
700
-10
-20
600
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
WEP PX CP
Jul-09
ASIA PX CP
140
1200
120
1000
100
800
80
600
60
400
40
200
20
0
07-Feb 14-Mar 18-Apr 23-May 27-Jun 01-Aug 05-Sep 10-Oct 14-Nov 19-Dec 23-Jan
Asia Spot - WEP Spot (RHS)
CFR Taiwan
Spot USGC
90
1200
80
1000
70
60
800
50
600
40
30
400
20
200
10
0
Jan-07
0
Jul-07
Jan-08
Jul-08
Naphtha
PX Contract
Jan-09
Naphtha PX spread
Brent
Jul-09
Page 19
PARAXYLENE
600
Jul-07
Jan-08
MX
Jul-08
Jan-09
Jul-09
Blend Value
PX
Forecast
1500
1250
1000
750
500
250
0
-250
-500
Q106
Q2
Q3
Q4
Q107
Avg Feedstock
Avg Fixed
Spot Price
Q2
Q3
Q4
Q108
Avg Variable
PX Price
Q2
Q3
Q4
Q109
Avg Delivery
Margin
Q2
Q3
Q4
Page 20
PARAXYLENE
PX Reinvest Costs
2008
~
CHEMICAL MARKET ASSOCIATES, INC.
www.cmaiglobal.com
Excellence
& Experience
in Consulting
since 1979
Excellence
& Experience
in Petrochemical
Consulting
since 1979.
Chemicals - Plastics - Fibers
Page 21
PTA
PTA
PTA Comparison After Discounts
Dollars per Ton
1400
Forecast
1200
1000
800
600
400
200
0
Jan-07
Jul-07
Jan-08
Jul-08
Asia Contract
WEP Contract
WEP - Asia delta (RHS)
Jan-09
Jul-09
NAM Contract
Asia Spot delivered WEP
On operations a strike at a northwest European PTA producer delayed the restart of some plants following a
turnaround. The strike was quickly resolved and deliveries to customers were not affected. In Iran one line
of the PTA unit at Bandar Imam was taken down in early February because of mechanical problems. It is not
expected to return to production until the end of April.
January contract price discussions have only just started with producers wanting prices to increase by the rise
in paraxylene raw material costs of 14 per ton. Consumers on the other hand would like prices to be more
competitive with Asia and want the increase to be limited to 4 per ton.
Jan-07
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Jan-08
Page 22
PTA
er
d ov
sente
e
r
p
Data a period rs
yea
even
of el
12
2002
2008
- 20
~
CHEMICAL MARKET ASSOCIATES, INC.
Houston
ousto - New York - Dubai - Dsseldorf - London - Shanghai - Singapore
www.cmaiglobal.com
Excellence
& Experience
in Petrochemical
Consulting
since 1979.
Excellence
& Experience
in Consulting
since 1979
Chemicals - Plastics - Fibers
Page 23
PET
PET
The PET market in Europe has remained in the
doldrums in the last month. Demand which is
1,800
normally weak at this time of the year has been
below expectations. The reason for this is that the
1,600
glycol contract price in Europe was settled on a
1,400
net basis approximately $280 per ton higher than
1,200
the Asian contract price. The expectation is that
1,000
the glycol prices will fall significantly in March.
800
In order to come back to parity with Asia the price
600
will need to fall by 125 per ton. PET buyers
400
hope that this fall in glycol prices will translate
200
into lower PET prices and so demand was weaker
0
than expected.
Jan-07
Jul-07
Jan-08
Jul-08
Jan-09
Jul-09
~
In the last month prices have fallen from a range
Spot PET NEA
WEP PET
WEP PET - Spot PET NEA
of 1130-1180 per ton to the current levels of
1030-1100 per ton. The price fall has been driven by intense competition in the market and a Middle Eastern
producer placing material in Europe.
PET Prices
Jul-05
PX Component
MEG Component
Contract Price
Jan-06
Jul-06
Jan-07
Jul-07
PTA Component
Conv Costs and Other Raw
Margin
Jan-08
Delivered WEP /t
Page 24