Polymer feedstock summary analysis-20th March, 2017

SEATTLE (polymers.in):  Oil prices ended the week little changed with Brent and WTI remaining below $52/bbl and $49/bbl levels respectively as glut fears persisted despite a small US oil inventory drop, the first in 2017.

PE

PE contracts were stable. Ethane value dropped by $5/mt or about 0.5 cents/lb. Ethylene price increased by $35/mt or about 1.6 cents/lb. PE inventories declined after restocking at the beginning of the year that helped to increase February contract prices by 5 cents/lb. However, March domestic PE demand is weaker than in February, making it harder to implement another 6 cents/lb hike. Supply was sufficient and new capacities were expected to come online later this year. In March, PE contracts will likely stay stable or rise modestly.

PP

PP contracts were stable. Propane value declined by $59/mt. Propylene dropped by $24/mt. Supply of propylene increased as refineries return from turnarounds. PGP contract prices are expected to rise by 3-5 cents/lb in March, less than earlier anticipated. Domestic PP demand was a bit weaker in March, comparing to February. It softened on the back of higher PP prices. In March, PP contracts will likely increase, following propylene price movement.

PET

PET contracts were stable. Ethylene price increased by $35/mt or about 1.6 cents/lb. Domestic PET demand was stable. In the months ahead, it may strengthen as summer peak bottling season is approaching. However, recent PET price hikes were driven by firmer feedstocks. As oil weakened, upward pressure on PET prices eased. In March, PET contracts will likely stay stable or rise by 1-2 cents/lb.

PVC

PVC contracts were stable. Ethylene price increased by $35/mt or about 1.6 cents/lb. Domestic demand for PVC from the construction sector remained good while supply was not ample. Domestic production will likely remain limited in April due to turnarounds. Announced 3 cents/lb increase for March contracts may pass through. Moreover, some producers are planning to raise prices by another 3 cents/lb in April.

OIL

US crude stockpiles declined by 237,000 barrels, the EIA said. However, oil inventories at Cushing, the biggest U.S. delivery point for WTI futures, rose by 2.13 million barrels. Oil production in the US increased for a fourth week in a row to 9.11 million b/d. Shale producers continued to pump at higher rates, limiting oil price growth. Saudi Arabian Energy Minister Khalid Al-Falih expressed concern about high global crude stockpiles, adding that OPEC may extend an agreement to cut production if supplies remain above average levels.

DEMAND

Car sales in India lost momentum in February after a spike in the previous month, as consumer sentiment in Asia's third-largest economy remained subdued following a government cash recall that dented demand for automobiles, Nikkei Asian Review reported. According to data from industry group Society of Indian Automobile Manufacturers, or SIAM, sales of passenger vehicles, including cars, sport-utility vehicles and vans, rose more than 9.01% to 255,359 units last month from a year earlier. Sales jumped 14% in January after most carmakers replenished inventories at dealerships.

Courtesy: www.polymers.io