SOLVENTSWIRE

Volume 41 / Issue 31 / July 31, 2018

Platts Global Hydrocarbon Solvents Price Assessments Platts Global Oxygenated Solvents Price Assessments
Northwest Europe Northwest Europe
FOB Rdam ($/mt) FD NWE (€/mt) FOB Rdam ($/mt) FD NWE (€/mt)
Solvent Naphtha (C9) 778–782 843–847 IPA 1168–1172 1098–1102
White Spirit (145-195) 743–747 808–812 Phenol* 1213–1217 1136–1140
Hexane (Special Grade) 793–797 853–857 Acetone T2 583–587 598–602
Solvent Toluene 753.00–757.00 MEK 1461–1465 1348–1352
Solvent Xylenes 763.00–767.00 E Acetate 1484–1488 1368–1372
CIF ARA ($/mt) B Acetate 1285–1289 1198–1202
Toluene 819.00–823.00
Mixed Xylene 820.00–822.00 (€/mt)
United States Methanol 344.00–345.00
FOB US Gulf (¢/lb) FOB Chicago (¢/lb)
Toluene 40.50–41.50 41.50–42.50
United States
Xylenes 39.50–40.50 40.50–41.50
FOB US Gulf (¢/lb) DER (¢/lb) FOB US Gulf ($/mt) DER ($/mt)
Hexane 48.75–49.25 49.75–50.25 IPA 1532–1554 1686–1708
Phenol* 1124–1146 1159–1181
(¢/gal)
Acetone T1 970–992 –
Hexane – 268.65–271.35
Acetone T2 – 1135–1157
Asia E Acetate 1610–1632 1653–1677
FOB Korea ($/mt) CFR China^ ($/mt) B Acetate 1444–1466 1488–1510
Solvent MX* 748.00–750.00 774.00–776.00
*Asian Solvent Mixed Xylene assessments reflect the close of Friday the previous week, as published in the Asian
Petrochemicalscan and PCA 416. ^basis L/C 90 days. DER = Delivered East of Rockies. (¢/gal)
Methanol M1 Aug 112.15–112.65
Methanol M2 Sep 111.85–112.35
Platts Global Chlor-Alkali Price Assessments
Northwest Europe
FOB DSP (190) (¢/gal) FOB DSP (200) (¢/gal)
FOB Rdam ($/mt) FD NWE CP* (€/mt) Industrial Ethanol 272.00–282.00 297.00–307.00
Caustic Soda 488.00–492.00 648–652
Chlorine – 187–191
United States Asia
FOB US Gulf ($/mt) FOB Plant* ($/DST) CFR China ($/mt) CFR SEA ($/mt) CFR India ($/mt)
Chlorine – 280–290** Phenol 1209–1211 1209–1211 1314–1316
Caustic Soda 590–600 630–640** Acetone 599–601 689–691 659–661
US Contract ($/mt) Methanol 389.20–391.20
Chlorine 345–355 *Phenol is basis FOB Ex-Tank. FD NWE prices in table based on spot lots of 20 mt in the German mkt. FOB based on larger
Caustic soda 560–570 spot parcels for import/export. Asian phenol, acetone assessments are basis L/C 90 days. US acetone T2 price is a US
Asia domestic truck/rail contract price, for MMA use. DER = Delivered East of Rockies. DSP = Distilled Spirit Plant. Europe
FOB NE Asia ($/mt) CFR SE Asia ($/mt) Domestic East China (Yuan/mt) methanol price is in Euro/mt and reflects weekly average at close of Friday the previous week, as published in the Europe
Caustic Soda 369–371 399–401 959–961 & Americas Petrochemicalscan and PCA 346. US methanol price is in cents/gallon and reflects weekly average at close of
*Europe chlor-alkali contract prices, and US chlor-alkali FOB plant and US contract price assessments are made once a Friday the previous week, as published in the Europe & Americas Petrochemicalscan and PCA 347. Asia methanol price
month on the first Tuesday of the month. **$/dst. DER = Delivered East of Rockies. reflects weekly average at close of Friday the previous week, as published in the Asian Petrochemicalscan and PCA 653.

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SOLVENTSWIRE July 31, 2018

Hydrocarbon Solvents GLOBAL HYDROCARBON SOLVENTS ASSESSMENTS

United States ($/mt)
1000
XYLENE: US solvent xylene prices were stable for the second
Northwest Europe
consecutive week, following a week in which the barge spot
900
SOLVENT NAPHTHA C9: The European truck price of market experienced significant gains. Truck and rail xylene
solvent naphtha was assessed stable at Eur845/mt FD prices were assessed at 40 cents/lb FOB USG ($882/mt) on
NWE this week, in line with indications from the market. Tuesday. The FOB Chicago assessment maintained a 1-cent 800

Anticipation was for prices to come under pressure premium to the US Gulf assessment. Suppliers have
during August due to shutdowns at producer DHC narrowed their ranges for truck and rail prices this week, as 700
Chemical that will last for the duration of September and most sources indicated MX solvent prices to be around 40 Solvent Xylene FOB US Gulf
Solvent MX FOB Korea
October. One distributor was still uncertain on how the cents/lb. One supplier was still showing its xylene price at 41 600
13-Mar 10-Apr 08-May 05-Jun 03-Jul 31-Jul
tightness would impact the market as demand was cents/lb, though. Although the barge spot market rose
limited. SOLVENT TOLUENE/MX: The European truck significantly last week, one distributor said this has not yet Source: S&P Global Platts
prices of solvent toluene and solvent MX diverged this translated into another price change for truck and rail
week as market indications pointed to separate markets as truck and rail do not immediately react to spot prices were assessed at 269 cents/gal. HEXANE: US
fundamentals. Spot MX FD NWE increased to Eur765/mt, changes in the barge spot market. US spot barge mixed spot prices were higher on the week amid a stronger RBOB
up by Eur10/mt on the week and below indications heard xylene prices were down slightly to start the week, as spot and crude values. Hexane pricing closed Tuesday at 48.75-
from distributors in a Eur770-780/mt range. Pricing was MX was assessed at 270 cents/gal on Tuesday, down 2 49.25 cents/lb FOB USG and 49.75-50.25 cents/lb DER, both
moving upwards, one said, due to a force majeure cents/gal from Friday’s assessment of 272 cents/gal. The up 0.50 cent on the week. Spot prices typically trend with
resulting in downstream pressure from PX and OX on the barge price for MX rose most of last week before falling on energy markets, according to market feedback. NYMEX
barge market. Another source said that this week’s Monday and Tuesday. Spot barge prices hit a weekly high of August RBOB gasoline gained 3.35 cents week on week to
movements in crude had also supported a small increase. 272 cents/gal last Friday, gaining 19 cents/gal from the $2.1291/gal, while NYMEX September crude was up 35 cents
Solvent toluene remained stable at Eur755/mt, following previous Friday. TOLUENE: US solvent toluene truck and rail over the same period to close at $68.76/b.
pressure on the market as stocks in the market were prices were flat this week, as suppliers kept watch on the
heard to be healthy. Demand was weak as many buyers barge spot markets. Toluene solvent prices were assessed
Asia
were on holiday. WHITE SPIRIT: The European truck price at 41 cents/lb FOB USG ($882/mt) on Tuesday, no change
of white spirit was assessed stable at Eur810/mt FD NWE. from the previous week. Major suppliers have said they were East China’s mixed xylenes inventory rises 2.78%
„„
Distributors talked in a range up to Eur820/mt, with a showing solvent toluene prices at 41 cents/lb this week. The Chinese domestic prices firmer
„„
distributor saying one producer was offering limited trade FOB Chicago assessment maintained a 1-cent premium to
opportunity at levels as low as Eur780/mt, depending on the US Gulf assessment. The stable solvent toluene market Solvent mixed xylenes rose by $10/mt on the week to be
availability. Meanwhile, the white spirit premium over jet was in line with the solvent xylene, which was flat from last assessed at $749/mt FOB Korea Friday, tracking the rise in
fuel was assessed stable at Eur40/mt FOB Rotterdam. week as well. Although stronger toluene barge spot prices isomer-MX and naphtha. Isomer-MX rose $17.50/mt week on
HEXANE: The European truck price of hexane was down have pressured solvent toluene truck and rail prices lower in week to $859.50/mt FOB Korea Friday. “Solvent-MX market
Eur5/mt at Eur855/mt FD NWE this week. A sell level of recent weeks, suppliers have said limited availability for seems firmer as both upstream and downstream [related
Eur860/mt was heard from a distributor this week, while transportation using truck and rail limits the ability for products] are up,” a Southeast Asian end-user said. Selling
demand and supply fundamentals remained unchanged. solvent pricing to immediately react to changes in the barge indications were heard at $750/mt FOB Korea, $5-$10/mt
The distributor added that a Eur5/mt could be possible on market. Toluene barge spot prices on Tuesday were at 270 higher than last week, versus no bids. In Southeast Asia,
negotiation. The hexane premium over feedstock cents/gal, no change from Monday. This follows a week in selling interest was heard at $820/mt against no bids.
naphtha was assessed stable at Eur140/mt FOB which toluene spot pricing saw a 13-cent rebound from the Tradable value for solvent-MX cargoes arriving in August
Rotterdam amid no disproving indications. 6 month low experienced the week before. On Friday, barge were heard between $760/mt and $785/mt this week, while

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 2
SOLVENTSWIRE July 31, 2018

domestic cargoes were heard tradable at Yuan 6,550-6,700/ Novapex was reportedly undergoing maintenance works at contracts were flat to June at 59 cents/lb while
mt ex-tank in East China, up Yuan 100-200/mt week on the moment. Germany’s Domo was scheduled to conduct chemical-grade contracts were level at 57.50 cents/lb.
week. This translated to $784.72/mt on an import parity maintenance in Leuna for 30 days, starting September 1. pricing continued to be talked in the mid-40s cents/lb
basis. “It is gasoline consumption season, inventory levels This was expected to be followed by a shorter — between range for trucks. Additionally acetone pricing saw
are not high and demand is picking up,” a Chinese trader one and two weeks — outage at Cepsa’s one line in Huelva, support from refinery-grade propylene, which was last
said. East China inventory for mixed xylenes, comprising Spain. IPA/MEK: The European isopropanol market assessed at 44.50 cents/lb, according to S&P Global
both isomer-MX and solvent-MX, rose week on week by remained stable this week at Eur1,100/mt FD NWE. There Platts data. Sources continued to talk pricing this week
2.78% to 37,000 mt. continued to be less material shipped from the US amid the at 44-45 cents/lb ($970-$992/mt) FOB USG. Related to
ongoing strength there, with the US FOB prices hovering fundamentals, the market was heard well-supplied and
Rationale around $240/mt above Europe. On the other hand, a trader sources noted a strong phenol market added length to
Solvent-MX was assessed at $749/mt FOB Korea Friday, up mentioned imports from Korea and Azerbaijan coming in. the acetone market. MMA contracts were heard settled
$10/mt week on week, tracking gains in isomer-MX and MEK prices meanwhile were assessed Eur30/mt lower on at 53 cents/lb for July, though confirmation was not
below selling indications heard at $750/mt FOB Korea. CFR the week at Eur1,350/mt in line with a trader peg. The prices available at time of publication. PHENOL: Phenol prices
China solvent-MX was assessed at $775/mt Friday, between continued adjusting downwards from last year’s highs amid moved higher this week following gains in raw materials.
tradable values at $760/mt and $785/mt heard this week. resupply from China. On the domestic production side, Domestic ex-tank phenol pricing was assessed up $57 to
The CFR Southeast Asia marker was assessed at $802/mt, Novapex’s IPA production should also be down alongside its $1,170/mt FOB USEC following gains in the benzene
up $10/mt on the week, below selling interest heard at acetone. Furthermore, Ineos was expected to conduct contract. The August US benzene contract was heard
$820/mt. No buying interest was heard for FOB Korea and works at its Moers plant in autumn, taking down its IPA line settled at 288 cents/gal this week, up 4 cents from the
CFR Southeast Asia cargoes. in September and subsequently MEK line in October. ETAC/ July settlement of 284 cents/gal. Sources said
BUTAC: An ongoing shortage of product in Europe pushed fundamentals were relatively stable this week and
etac spot prices up Eur100/mt, or 7.8%, week on week to demand was healthy and run rates were strong. Sources
Oxygenated Solvents Eur1,370/mt FD NWE, refreshing a 16-year high. Sources continued to talk pricing with adders at a 12-15 cents/
said that the key European producer, Ineos, was to restart premium to benzene. Export values were unchanged at
its Hull plant in the UK by the end of the week, however this $1,135/mt FOB USG amid flat pricing in Asia. The S&P
Northwest Europe
would not necessarily alleviate the tightness immediately Global CFR China phenol assessment finished at $1,210/
ACETONE/PHENOL: European producers continued as it would take time to rebuild the inventories. Still the mt. Cumene prices were stronger on the week, finishing
struggling with poor margins this week, still unable to get sentiment was likely to change towards the end of August, Monday’s session at 329.15 cents/gal, up 9.15 cents on
strength in phenol to offset the impact of an oversupplied and hence fresh imports remained unlikely. Spot prices the week. IPA: The US IPA market remained stable
acetone market. Spot prices slipped back to Eur600/mt FD were heard in a Eur1,270-1,450/mt range. “The high end will Tuesday, holding at the assessed level of 69.50-70.50
NWE, down Eur20/mt week on week. Phenol’s premium probably be gone, but Eur1,350/mt will remain as acetic acid cents/lb ($1,532-$1,554) FOB USG and at 76.5-77.5 cents/
over benzene remained assessed at Eur390/mt. “Producers is still expensive,” a trader said. In butac, the spot prices lb ($1,686-$1,708/mt) DER for domestic prices. In
are losing money on acetone, as output is high because of remained unchanged this week at Eur1,200/mt. The feedstocks, the US propylene market will has been
the good phenol demand,” a trader said. He added that availability was expected to improve amid normalizing monitoring Texas PDH units which have seen several
there was now talk of producers potentially trimming run supplies of feedstock butanols. production blips over the past few weeks, lending
rates to curb the acetone oversupply. A producer echoed support to spot prices. US refinery-grade propylene was
the sentiment: “We are swimming in acetone. All producers last assessed Monday at 44.25-44.75 cents/lb FD USG on
United States
are producing well and the prices are low.” Falling Rhine a three- to 30-day basis, stable on the week. The July
water levels were reportedly causing logistical headaches ACETONE: US spot truck and rail acetone prices were propylene contract settled last week at a rollover. ETAC:
to inland consumers, while barging costs were also on the steady on the week as pricing saw support from a ETAC prices were unchanged on the week as upstream
rise amid partial loadings. On the production side, France’s rollover in propylene contracts. July polymer grade acetic acid market recovery begins and supply ramps

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 3
SOLVENTSWIRE July 31, 2018

back up. Acetic acid supplier BP was heard to have domestic demand, but buyers in the Asian phenol market GLOBAL OXYGENATED SOLVENTS ASSESSMENTS
restarted production at their Texas City, Texas, facility said Tuesday that offers had been heard from the plant, ($/mt)
1400
and supplying contracts again, a source said, although as Indian exports were expected to be a permanent
spot availability continued to be heard limited. Pricing feature in the Asian market. Feedstock benzene was 1300
and supply are set to fully recover sometime in the fall. assessed up $40.30/mt on the week at $877.33/mt FOB
Spot ETAC closed Tuesday at 73-74 cents/lb ($1,610- Korea Tuesday, while propylene, another feedstock for 1200
$1,632) FOB USG, while domestic pricing was assessed phenol/acetone, was assessed up $10/mt over the same
1100
at 75-76 cents/lb ($1,653-$1,677) DER. BUTAC: The period at $1,070/mt FOB Korea. PHENOL: Phenol was
BUTAC market was level on the week, as prices closed assessed unchanged on the week at $1,210/mt CFR Phenol FOB Rotterdam
1000 Phenol FOB US Gulf
Tuesday at 65.5-66.5 cents/lb (1,444-1,466/mt) FOB USG, China, despite firm gains in domestic East China prices.
Phenol CFR China
while domestic pricing was assessed at a 2-cent/lb Prompt domestic cargoes were heard Yuan 425/mt 900
13-Mar 10-Apr 08-May 05-Jun 03-Jul 31-Jul
premium at 67.5-68.5 cents/lb ($1,488-$1,510/mt) DER, higher on the week at Yuan 9,500/mt Tuesday, or $1,161/
both stable on the week. Feedstock markets acetic acid mt on an import parity basis. The persistent gain in Source: S&P Global Platts
and n-butanol remain unchanged on the week holding at domestic prices were heard as a result of a weakening
Methanol
assessed levels of $1,121-1,131/mt FOB USG and $1,080/ Yuan relative to the US Dollar, while demand from
mt FOB USG, respectively. INDUSTRIAL GRADE ETHANOL: downstream end-users did little to support phenol prices.
Northwest Europe
The industrial-grade ethanol market moved higher on The Chinese Yuan/US Dollar exchange rate stood at
the week Tuesday, tracking movement in related 6.8165 Tuesday, up from 6.7891 last Tuesday. Talk in the No Friday deals heard
„„
Chicago Argo ethanol market. Industrial-grade ethanol market was on the possibility of a further weakening Maintenance in Russia to pick up
„„
prices closed at 272-282 cents/gal for 190 proof and 297- Yuan, amid expectations that the Chinese Yuan/US Dollar
307 cents/gal FOB DSP for 200 proof, both up 2 cents on rate may fall to 7.0000. Demand was tepid, as producers The European daily methanol price was assessed down
the week. Per market feedback, the spread between the did not notice a rise in the volume of inquiries. With Eur2 on the day to Eur342.50/mt FOB Rotterdam for the
190 and 200 proof grades typically ranges between 15-25 domestic prices on the rise, a buyer in the Chinese 5-30 day laycan Friday. The market was quiet and no
cents/gal. On the week, the Chicago Argo ethanol market was heard considering importing cargoes on a deals were reported on Friday. One source said declining
assessment moved 4.225 cent/gal on the week, and over CFR China basis, if prices were sufficiently “competitive”. water levels on the River Rhine were having an impact
a 30-day period, closing Tuesday at 146.525 cents/gal. Despite the gain in domestic prices, discussion levels in on market activity, with barges loading reduced volumes
the Asian market was heard stable amid thin trading. As in Rotterdam. Rhine levels at key chokepoint Kaub
a result, CFR India and CFR SEA were assessed are currently pegged at 97 cm, down from 107 cm last
Asia
unchanged on the week at $1,315/mt and $1,210/mt Friday, according to the German waterways authority.
Trading activity in the Asian phenol/acetone market was respectively. ACETONE: On the back of a weakening In plant news, Russian methanol producer Metafrax is
thin this week, as supply and demand was balanced Yuan, domestic acetone prices were heard up Yuan 250/ expected to stop its 1.2 million mt/year Gubakha plant for
Tuesday, market sources said. While the market mt on the week at Yuan 4,725/mt Tuesday, or $561.57/mt a planned maintenance at the end of the coming week,
continued to anticipate the start up of new supply from on an import parity basis. However, demand continued to a source close to the company said, adding that the
India, demand from the downstream bisphenol-A market be lukewarm in the Chinese and Asian market, as turnaround period should last for three weeks. Looking
continued to support the market Tuesday. India’s Deepak producers were not offering cargoes for August and ahead, a second Russian methanol producer is set to
Phenolics, with a nameplate capacity of 200,000 mt/year September-delivery on a spot basis, market sources said. undergo maintenance, with Tomsk Methanol planning to
of phenol and 120,000 mt/year of acetone, is India’s first CFR China was assessed unchanged on the day at $600/ carry out maintenance in mid-September, a source close
phenol/acetone production plant. The unit is expected to mt Tuesday. The CFR India and CFR SEA marker was to the company said Friday. The source said works are
come online H1 August. Meanwhile supply from Deepak assessed unchanged over the same period at $660/mt expected to last four weeks. The plant has a capacity to
Phenolics had earlier been expected to fulfill only and $690/mt respectively. produce 1 million mt/year.

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 4
SOLVENTSWIRE July 31, 2018

Rationale Rationale Chlor-Alkali

S&P Global Platts assessed the 5-30 day spot methanol US spot methanol was assessed Friday at 111.75-112.25
price at Eur342.50/mt Friday, down Eur2 on day. There cents/gal FOB USG for August and September. Front-
Northwest Europe
were two deals done Thursday after the market close: month product was stable day on day and week on
August at Eur342.50/mt and September at Eur340/mt. No week, while forward-month product fell 1 cent on the Expectation of reduction in caustic run rates
„„
fresh bids, offers and trades were heard throughout Friday. day but rose 2.25 cents on the week. The assessment VCM slides with low PVC demand
„„
Platts assessed August and September in line with the was in line with notional pricing for August talked at 112
reported deals. cents/gal with front- and forward-month market European caustic soda continued to slide this week
structure talked flat. dropping $50 to be assessed at $490/mt FOB Rotterdam.
A quiet summer period has seen demand continue to drop.
United States
Demand will remain low until late August when the holiday
Asia
Market conditions expected bearish next week
„„ period ends, a trader said. The Mediterranean is even longer
SCC cuts August CP by 5 cents to 144 cents/gal
„„ Canada’s Methanex nominates Aug ACP at $490/mt
„„ than Northern Europe where lots of product has seen
China-SEA arbitrage window opens
„„ prices slip well below NWE levels. There is a lot of product
US methanol prices were stable to end the week Friday, in tanks in the Spain, a trader said. September may see
as the spot assessments rolled to August as the front Asian methanol was steady Tuesday amid thin trade. prices increase as a major European producer is to undergo
month. US spot methanol was assessed Friday at 111.75- Canada-based Methanex on Tuesday nominated its Asia maintenance, he said. French producer Kem One will start
112.25 cents/gal FOB USG for August and September. Contract Price for August at $480/mt CFR, down $10/mt six weeks’ maintenance on August 27 at the company’s
Front-month product was stable day on day and week from its July nomination. Firm demand from Southeast caustic soda facility in Fos-sur-Mer, Platts reported in
on week, while forward-month product fell 1 cent day Asian end-users, coupled with tight supply in the region, early July. Material from the Middle East has been heard
on day but rose 2.25 cents week on week. The market opened the arbitrage window for methanol from China to offered at very low numbers and this has helped to drive
continues to hold steady in anticipation of the second Southeast Asia, market sources said. Supply was likely to down prices in the Med, a market participant said. There
August methanol contract post from Methanex. Activity remain tight in Southeast Asia in Q3, requiring imports to has been the suggestion that the low caustic prices and
was limited Friday, while participants talked notional make up the shortfall, regional sources said. One factor large quantities in tanks could see run rates reduced which
pricing for August at 112 cents/gal FOB USG, with front- is Malaysia’s Petronas Chemicals shutting its 1.7 million could impact products downstream of co-product chlorine.
and forward-month market structure talked flat. Late mt/year No. 2 methanol plant at Labuan for longer than EDC: European ethylene dichloride remained was assessed
Thursday morning, Southern Chemical Corporation expected. It will be shut on August 13 for 48 days, while it unchanged at $300/mt this week as the market remained
announced in a notice to customers that it cut its was expected to be closed for only about a month, market quiet. The suggestion of reduced rates in caustic soda and
August North American posted contract price by 5 sources said. Brunei Methanol Company’s 850,000 mt/year chlorine production could see this price gain in the coming
cents to 144 cents/gal ($479/mt) FOB USG. SCC is the US plant has experienced technical issues throughout the year, months, a trader said. VCM: Vinyl chloride monomer in
distributor for Methanol Holdings Trinidad, the largest keeping its operating rates relatively low, a source close Europe was assessed down $10 at $620/mt FOB NWE. The
producer in the Americas at 4.1 million mt/year capacity. to the company said. Both companies have relatively low spot market was sluggish as demand dropped from PVC
Methanex ranks as the world’s largest methanol methanol stocks and were supplying contract volumes only, producers. “Inventories of PVC are the highest in the last
producer by capacity. Participants expect bearish according to market sources. 18-24 months,” a trader said.
market conditions to return into next week. Across
the Atlantic, European methanol prices fell Eur2/mt on Rationale Rationale
the day and Eur3/mt week on week to close Friday at The CFR China methanol marker was stable on the day at S&P Global Platts assessed spot caustic soda prices at
Eur342.50/mt ($399.12) FOB Rotterdam. In Asia, spot $398/mt Tuesday. Other buying indications were heard at $490/mt FOB Rotterdam Tuesday, down $50 on the week
prices rose $13/mt on day and $4/mt on the week to $360/mt CFR China. The CFR Southeast Asia marker was as demand continued to drop and within an indication
close Friday at $398/mt CFR China. stable on the week to $439/mt Tuesday. heard at $400-$500/mt. The VCM spot price was assessed

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 5
SOLVENTSWIRE July 31, 2018

at $620/mt FOB NWE down $10 on the week with dropping Emirates Global Aluminum (EGA) in the United Arab GLOBAL CHLORALKALI ASSESSMENTS
demand from downstream PVC. EDC spot prices were Emirates. “The Japanese fire sale was just a fire sale - very ($/mt)
700
assessed stable at $300/mt FOB NWE in line with much irregular and limited deal,” a US market source said.
indications in the range $290-310/mt. In Europe, caustic soda prices plummeted $50/mt to $490/
600
mt FOB Rotterdam amid soft demand in Northern Europe
and the Mediterranean and low prices for Middle Eastern
United States 500
product. In the US Shintech has begun construction on a
CHLORINE: US spot chlorine prices were assessed Tuesday $1.49 billion expansion of production along the entire
at $280-$290/st FOB plant, unchanged week on week, polyvinyl chloride chain at its Louisiana complex, including 400 Caustic Soda FOB Rotterdam
Caustic Soda FOB US Gulf
amid strong summer demand and record-breaking heat. the addition of 635,029 mt/year of chlorine, and 725,747 mt/ Caustic Soda FOB NEA
Water treatment demand rises seasonally during warmer year of caustic soda. The project marks the first chlor-alkali 300
13-Mar 10-Apr 08-May 05-Jun 03-Jul 31-Jul
months, and temperatures in several US regions have hit capacity increase since early 2016 when caustic soda
record highs at or near 100 degrees Fahrenheit this year, margins expanded in the aftermath of capacity Source: S&P Global Platts
with August yet to come. Such high temperatures can consolidation, but startup won’t come until late 2020,
reduce chlorine levels in exposed water, increasing chlorine leaving producers confident of maintaining healthy margins relatively low. The tradable level basis FOB China was heard
usage to prevent bacteria growth. Industry statistics show for the foreseeable future. Norsk Hydro executives remain in the low $400s/mt this week, with an offer at $460/mt
chlorine operating rates reached 94% in June, up from 92% in talks with Brazilian regulators about lifting an order FOB China. Due to low inventory in China, the domestic
in May and 91% in June 2017.CAUSTIC SODA: US export limiting output to 50% at its Alunorte alumina refinery, the price remained stable week on week at Yuan 960/mt
caustic soda prices were assessed Tuesday at $590-$600/ world’s largest. Production has been halved since February Tuesday. Market sources said that the Asian caustic soda
mt FOB USG, up $10/mt week on week, amid pricing when heavy rains raised concerns about contaminated market had hit the bottom as Japan stocks had been
indications at the assessed level in thin market activity. A leaks from bauxite residue deposits. almost been cleared, and fresh demand emerged in Q3, in
market source said inventory was tight, helping boost line with the a planned startup of a new alumina refinery in
pricing indications, though spot deals were scarce. the Middle East. Meanwhile, CFR Southeast Asia caustic
Asia
OxyChem was heard to have wrapped up maintenance at its soda was assessed up $10/mt week on week at $400/mt
chlor-alkali plant in Geismar, Louisiana, last week, the latest FOB Northeast Asia caustic soda rose $10/mt week on Tuesday, with the tradable level heard in the low $400s/mt.
in a string of turnarounds at the company’s US chlor-alkali week to be assessed at $370/mt Tuesday after falling to the FOB USG caustic soda was assessed at $585/mt last
facilities, potentially increasing export volume availability. lowest level since October 2016 last week. The Asian Tuesday, unchanged from a week earlier, S&P Global Platts
Asian caustic soda prices rose week on week Tuesday, caustic soda market has been under pressure for a few data showed.
partially rebounding from the lowest levels since October weeks, amid active selling by Japanese traders. Japan’s
2016 reached last week. Prices rose $10/mt to $370/mt FOB caustic soda stocks had been building up as heavy rain in
Northeast Asia and $400/mt CFR Southeast Asia, according early July damaged a key export terminal on the western News Briefs
to S&P Global Platts data. Asian caustic soda prices have coast. It resumed normal operations recently. This week, a
been pressured in recent weeks by incoming cargoes from transaction was heard at $350-$360/mt FOB Japan. The
No timeline on Brazilian alumina refinery
the Middle East and Japan, as well as downstream plant Japan Soda Industry Association said Tuesday that caustic
inspections in China that siphoned demand. An Asian soda stocks jumped 43.8% from a year earlier to a five-
ramp-up: Norsk Hydro CEO
market source said some Chinese chlor-alkali plants had month high of 160,345 mt at the end of June. On the other Global aluminum supplier Norsk Hydro remains in talks
cut rates with prices below the breakeven level to $400/mt. hand, Chinese caustic soda makers were not in a hurry to with Brazilian regulators about resuming full rates at its
Some sources said prices had hit bottom with Japanese sell spot cargoes. A market source pointed out that some Alunorte alumina refinery, but CEO Svein Richard
inventories cleared and fresh demand emerging ahead of Chinese plants had cut operating rates due to negative Brandtzaeg said July 24 the company has no time line on
the early 2019 startup of a new alumina refinery startup by margins, which kept China’s caustic soda inventory when that ramp-up will occur. “We do not know exactly

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 6
SOLVENTSWIRE July 31, 2018

Subscriber notes
Platts proposes to specify benzene content in European MX inform subscribers of the new PCA page for this assessment JOVO Chemical Co. Ltd. Dongguan to join Asia methanol
methodology in due course. Asia Petrochemical Scan will continue to carry physical MOC JOVO Chemical Co. Ltd. Dongguan has advised
S&P Global Platts is proposing to specify benzene content in its the weekly CFR India prices as these will be published with
mixed xylenes assessment methodology in Europe, effective an asterisk to denote that the assessments were published S&P Global Platts that it would like to participate in the Platts Asia
September 3, 2018. This follows industry comments that the on Wednesday. Please direct any questions or comments to Market on Close assessment process for Asia Methanol physical
bulk of MX produced and traded within Europe conforms to a petchems@spglobal.com with a copy to pricegroup@spglobal.com. (CFR China). Platts has reviewed JOVO Chemical Co. Ltd. Dongguan
maximum limit of 100 ppm benzene content. Platts existing MX For written comments, please provide a clear indication if they are and will consider information from the company in the assessment
specifications reflect product conforming to the latest edition not intended for publication by Platts for public viewing. process for Asia methanol physical, subject at all times to
of ASTM D-843, with one or more isomers removed; the non- adherence with Platts editorial standards. Platts will publish all
aromatics content set at the maximum of 2% and the maximum Platts to launch prompt, forward domestic China benzene relevant information from JOVO Chemical Co. Ltd. Dongguan
ethylbenzene content at 20%. There are no limits on metaxylene, assessments Aug 1 accordingly. Platts welcomes all relevant feedback regarding MOC
paraxylene and orthoxylene content. Property: Specifications: S&P Global Platts will launch daily prompt and forward domestic participation. Platts considers bids, offers and transactions by all
Non aromatics content, max 2% Ethylbenzene content, max, vol China benzene assessments and its import-parity equivalent, credible and credit-worthy parties in its assessment processes.
20% Color, max, Pt-Co scale 20 Distillation range, max 5 Celsius effective August 1, 2018. The new assessments reflect increased For comments and feedback, please contact Platts editors at
Initial distillation temp, min 137 Celsius Dry point, max 143 Celsius interest from the market to understand daily price trends in petchems@spglobal.com and moc_review@spglobal.com.
Acid wash color, max pass with 6 Copper corrosion, max pass (1A the domestic East China market. The domestic China benzene
assessments would comprise of three markers, namely the East Operational tolerance standards in CFR India methanol cargo
or 1B) Appearance Clear liquid free of sediment and haze when
China prompt marker, East China Bal-M1 marker and the East S&P Global Platts assessments for CFR India methanol reflect cargo
observed at 18.3 to 25.6 C (65 to 78F) Platts MX assessments are
China M2 marker. The East China prompt marker will reflect volumes and product quality that conform to typical industry practice
published on Petrochemical Alert (PCA) pages: 328, 335, 233,
and standards, including for operational tolerance on delivered
432, 370, 241, 446 and 540. They are also published in Europe & prices of cargoes in Yuan up to 10 days forward from date of
volumes. Effective June 25, 2018, Platts assessment for CFR India
Americas Petrochemicalscan, Solventswire and in the Platts price publication. The East China Bal-M1 marker will reflect prices
methanol prices reflect 5,000-10,000 mt cargoes loading 20-40 days
database under the following symbols: Mixed Xylenes CIF ARA of cargoes in Yuan loaded within the current calendar month
from the day of publication. Platts considers for publication bids, offers
MXEAA00 Mixed Xylenes CIF ARA Mo01 MXEAB00 Mixed Xylenes from date of publication. The East China M2 marker will reflect
and interest to trade cargoes that reflect an operational tolerance of
CIF ARA Mo02 MXEAC00 Mixed Xylenes FOB ARA PHABD00 Mixed prices of cargoes in Yuan loaded within the second calendar
plus/minus 5%, in line with standard industry practice, in sellers option.
Xylenes CIF ARA Mo01 spread to EBOB FOB ARA swap MXPRA00 month from date of publication. The import-parity equivalent
The formula used for pricing operational tolerance does not change
Mixed Xylenes CIF ARA Mo02 spread to EBOB FOB ARA swap of the prompt, Bal-M1 and M2 marker will be published using
and remains the same as the initial contracted price. Platts remains
MXPRB00 Platts invites all stakeholders and interested parties standard tax rates applicable on import cargoes and the
committed to reflecting standard cargo sizes in its assessments and
to engage in the feedback process. The feedback period will USD/yuan exchange rate issued by the Development Bank of
constantly reviews existing methodology to ensure its assessments
conclude on July 31, 2018. Please send comments and questions to Singapore. More details will be available in the Platts Asia- reflect standard traded parameters in a given market. Please direct
pl_petchems_ln@spglobal.com and pricegroup@spglobal.com. For Pacific Petrochemicals methodology and specifications guide. any questions or comments to petchems@spglobal.com with a copy
written comments, please provide a clear indication if comments Platts proposes to assess on an ex-tank loading basis out of to pricegroup@spglobal.com For written comments, please provide a
are not intended for publication by Platts for public viewing. Platts two main ports located in East China, including Jiangyin and clear indication if comments are not intended for publication by Platts
will consider all comments received and will make comments not Changzhou. The minimum volume assessed will be 500 mt, for public viewing. Platts will consider all comments received and will
marked as confidential available upon request. and the maximum volume will be 1,000 mt, in line with the make comments not marked as confidential available upon request.
standard parcel size traded in the domestic Chinese market.
Platts proposes to move CFR India methanol weekly assessment, Platts will assess cargoes with quality specifications conforming Platts standardizes CP wording in European petrochemicals
MOC to Wed to the latest edition of international standard ASTM D-2359. methodology guide
S&P Global Platts is proposing to change the weekly CFR India Platts will consider cargoes transacted on standard credit S&P Global Platts has updated its European petrochemicals
methanol assessment and Market on Close process from Fridays terms per market practice, as agreed between counterparties. methodology and specification guide to standardize wording
to Wednesdays with effect from September 3. This is to better Prices will be based on latest information sourced from the relevant to industry-settled contract prices for olefins, aromatics
capture trade flows in the India market and to allow for greater market up to the close of the assessment window at 4:30 pm and methanol. Platts has also clarified that it will not publish
MOC participation of companies in the Middle East, which are Singapore time (0830 GMT) daily. Please direct any questions a CP if industry does not reach a full settlement. Please send
closed on Fridays. The weekly assessments will now take into or comments to petchems@spglobal.com with a copy to questions and comments to petchems@spglobal.com with copy to
consideration price information gathered up to the close of the pricemethodology@spglobal.com. For written comments, please pricegroup@spglobal.com. For written comments, please provide
MOC at 4:30 pm Singapore time on Wednesday. The change in provide a clear indication if they are not intended for publication a clear indication if the comments are not intended for publication
the day will impact the weekly CFR India assessment currently by Platts for public viewing. Platts will consider all comments by Platts for public viewing. Platts will consider all comments
published on PCA 348 and under the symbol AABAG00. These received and will make those not marked as confidential received and will make comments not marked as confidential
will be published on a separate page on Wednesdays. Platts will available upon request. available upon request

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 7
SOLVENTSWIRE July 31, 2018

what it will take for the authorities to lift the embargo, and have concluded that the deposits did not overflow during make up for what it has not been able to produce. “We are
the timing to get back to 100% is still uncertain,” he said February’s rainfall. The company has been meeting with mostly covered for our smelting capacity for the rest of
during the company’s quarterly earnings call. Norsk Hydro those agencies as well as Brazil’s Public Prosecutor’s the year,” Brandtzaeg said.
is the majority owner of the plant in Brazil’s northern state Office to craft a plan to resume normal output at the
of Para, the world’s largest with a capacity of 6.2 million refinery. When ready, that plan must be presented to a
Methanol arbitrage from China
mt/year that typically produces about 5.8 million mt/year. judge and receive a court order to lift the embargo,
The plant also typically sources about 50,000 mt/month of Brandtzaeg said. An analyst commented during the call
to Southeast Asia viable from end-June
US-origin caustic soda to feed the refinery, but that flow that the situation “feels like it’s a chess game, but nobody Firm demand from Southeast Asia’s end-users, coupled
has been halved since February, after Brazilian regulators wants to go first.” Brandtzaeg said the negotiations have with tight supply in the region, opened up an arbitrage
ordered the company to cut rates 50% after authorities been a “maturing process,” which included the company’s window for methanol to be shipped from China to
suspected potential leaks from bauxite residue deposits retention of an independent Brazilian environmental Southeast Asia starting end-June, market sources said.
during heavy rainfall. The company also has been running consulting firm to examine the site. That firm also The 20,000 dwt chemical tanker Bum Shin, after a stint in
its Paragominas bauxite mine and Albras aluminum plant determined there was no overflow. He said the talks South Korea’s dry docks, will begin loading on August 2
at 50% as well because of the Alunorte cutback. Brazil is include other protective actions the company could take China-origin methanol from East China, bound for
the top export market for US caustic soda, having received to satisfy regulators. “We are not in a situation where we Southeast Asia’s major biodiesel end-users Wilmar
2.5 million mt of US caustic soda in 2017, or 39% of all US really think we are not going to find a solution,” he said. International and Musim Mas, industry sources said.
caustic soda exports last year and up 13% from 2016, “It’s just a matter of time when the solution will be found Methanol demand for the biodiesel sector, such as palm
according to US International Trade Commission data. and agreed with.” When asked if the company would turn methyl ester, is traditionally driven by Government
From January to April this year, exports dropped 42%, and adversarial and seek a court order to resume full mandates, for example, Indonesia’s mandate for 20%
then rose nearly 16% from April to May, the data showed. production if a deal is not reached by November or biodiesel blend in diesel, known as B20, and Malaysia’s B7
The Secretariat of Environment and Sustainability, December, Brandtzaeg said Norsk Hydro would “rather mandate. However, when the spread between Bursa
regulators in Para, and the Brazilian Institute of the find a constructive agreement with the government, Malaysia CPO futures and ICE Gasoil futures — called the
Environment and Renewable Natural Resources, the avoiding that sort of legal pressure.” In the meantime, POGO spread — is negative, arbitrage opportunities
Brazilian Ministry of the Environment’s administrative arm, Norsk Hydro has been buying alumina in spot markets to become viable for discretionary blending, as biodiesel

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SOLVENTSWIRE July 31, 2018

becomes cheaper than its crude counterpart. As Friday, the CFR Southeast Asia methanol price rose $5/mt Producers and Consumers Association. “To use coal-based
discretionary blending becomes the driving force, on the day to $435/mt, $3/mt above the FOB China prompt methanol, additional testing needs to be done. TMA for
feedstock methanol, which is required in biodiesel price plus freight, marking the beginning of the China to smell test, and Aromatics testing — since coal-sourced
production in a 1:10 ratio, becomes increasingly in demand SEA arbitrage. For enterprising methanol traders willing to methanol has more impurities,” an end-user said, referring
for Southeast Asian biodiesel producers. Such a take on a position in China’s domestic paper markets, the to the optional testing under the IMPCA specifications
discretionary blending arbitrage began early-May, when arbitrage window opened even earlier. From mid-June regime. Operational issues may include the requirement to
the POGO spread reached minus $70-$80/mt, and Chinese onwards, Oman Trading International and other traders change catalyst more often, leading to higher costs, the
PME demand surged. Discretionary blending of PME into took advantage of competitively priced H2 July forward source said. “But the price difference makes up for that
gasoil blendstock or light cycle oil for marine fuel in China market — equivalent to around $395/mt FOB China back risk.” Meanwhile, Southeast Asia methanol supply will likely
is viable when the POGO spread is at minus $70/mt, market then — for delivery into Southeast Asia, assuming an open continue to be tight in Q3, requiring imports to make up
sources said. The arbitrage window for discretionary arbitrage window, according to several industry sources. the shortfall, Southeast Asian sources said. One factor is
blending has been tightly shut since S&P Global Platts first “China market was undervalued, so when we saw the the longer than expected shutdown of Malaysia’s Petronas
assessed the POGO spread in February 2015. Sources backwardation of domestic [China] prices, and knowing Chemicals 1.7 million mt/year No. 2 methanol plant at
estimated 250,000-350,000 mt of PME were booked by that Southeast Asia would potentially rally because of firm Labuan, which will shut August 13 for 48 days compared
Chinese buyers in May for June-July loading from biodiesel demand, we figured the risks are not that high,” with earlier estimates of about a month, market sources
Indonesia and Malaysia. CHINA TO SOUTHEAST ASIA an OTI trader said. The 20,000 mt of methanol loaded on said. The Brunei Methanol Company’s 850,000 mt/year
METHANOL ARBITRAGE WINDOW OPENS END-JUNE On Bum Shin is an example of such a bet paying off, market plant has experienced technical issues throughout the
sources said. The CFR China price has risen $16/mt from year, keeping its operational rates relatively low, a source
the beginning of June to $439/mt Friday, according to close to the company said. Both companies have relatively
Platts data. The freight rate for shipping a methanol cargo low methanol inventories and are supplying contract
from South China to Southeast Asia is typically $20/mt, volumes only, according to market sources. The China to
from East China to SEA is about $30/mt, and from North Southeast Asia arbitrage continued to be marginally open
MARKET INSIGHTS / China about $35/mt, market sources said. Typically, South on Friday, considering the notional FOB China price of
SPECIAL REPORT China has stronger connections with the Southeast Asian $403/mt, plus freight of about $20-$30/mt, compared with
methanol market. “We are redirecting South China cargoes the CFR SEA assessed price of $429/mt. China’s flagging
EMEA petrochemical outlook H2 2018 to Southeast Asia, due to the low domestic prices in appetite for biodiesel, may be the reason for the eventual
New global supply will continue to set the tone for China,” a source at Sinopec Singapore said. East China closure of the China to SEA methanol arbitrage window,
European petrochemicals in the second half of 2018,
with capacity expansions in the Americas and Asia
traders typically imports global methanol, and trade sources said. In July, Chinese buyers stopped buying PME
among the threats to producer margins in Europe. Chinese gas and coal-based methanol in the domestic as they had difficulty blending the material bought earlier
markets, but the recent spike in Southeast Asia prices into gasoil and marine fuel. Despite that, the POGO
Economic fences being built across the globe will
meanwhile see trade flow upheaval on a grand scale, have also drawn intense interest. From July onwards, East arbitrage remains open on paper as the spread was at
bringing both uncertainty and export opportunities for China traders have been reaching out to Southeast Asian minus $137.49/mt on Friday.
European industry as the US-China trade war shows no participants for possible trade opportunities, but
sign of abating. acceptance of China-origin methanol specification is an
Methanex expects strong Q3 methanol
This special outlook report takes a look at the key issue, industry sources said. Natural gas-based Chinese
themes expected to shape the European olefins, methanol is readily accepted by Southeast Asia if IMPCA
prices, production: CEO
aromatics and polymers markets in the months ahead. standard is met, but the more abundant coal-based Global methanol prices remained firm through the first half
methanol posed additional barriers, a Southeast Asian of 2018, but some volatility could emerge in the near term
Read more at
formaldehyde end-user said. Merchant methanol reference as new supply ramps up along the US Gulf Coast and trade
http://plts.co/r1rf30l2Rws
specification is maintained by the International Methanol flows shift, Methanex CEO John Floren said Thursday.

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 9
SOLVENTSWIRE July 31, 2018

Floren said the methanol outlook for the third quarter was at some methanol-to-olefins facilities because of planned
DHC Gelsenkirchen solvents plant to enter
favorable, with strong prices and higher production, he said or unplanned maintenance that has since wrapped up,
during the company’s second-quarter 2018 earnings call. Floren said. Methanol’s spot discount price to the North
maintenance in August
However, more supply is entering the market as American monthly contract price has been, on average, DHC Solvent Chemie’s plant at Gelsenkirchen, Germany, is
Natgasoline’s 1.75 million mt/year plant in Beaumont, Texas 15%, Floren said. Methanex is continuing work on to enter extended maintenance at the end of August, a
— the US’ largest — ramps up. In addition, as demand bottlenecking projects at its Geismar I and II facilities, which company source said Thursday. The maintenance will last
grows, Natgasoline’s output is expected to displace US Gulf will be carried out during planned turnarounds over the next through September and October and impact its heavy
Coast imports from Trinidad and Tobago and boost US few years, CEO Floren said. Additionally, the firm is aromatics business. The Gelsenkirchen facility takes
methanol exports as well. Prices continue to sit well above progressing on its third US methanol production facility, olefins feedstocks to produce solvent C9 and hexane.
the cost curve amid robust demand in the energy sector, Geismar III, adjacent to its existing Geismar I and II According to a mraket source, problems have already
Floren said. Those include methyl tert-butyl ether (MTBE), production facilities in Louisiana. The third facility would arisen at the plant prior to the planned maintenance
fuel blending markets and better dimethyl ether bring the facility’s total capacity to about 3.8 million mt/ affecting all heavy aromatics deliveries. DHC declined to
affordability on higher oil prices, despite low operating rates year, he said. comment on this issue.

© 2018 S&P Global Platts, a division of S&P Global Inc. All rights reserved. 10