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Coronavirus affecting EMEA petrochemicals markets

The ongoing coronavirus pandemic and the restrictions on movement that have followed continue to raise new challenges for the European petrochemical industry and the wider EMEA region.

Supply-chain concerns in Europe continue to rise and market players are faced with the prospect of cutting rates regardless of margins. Talks of end product production closures are expected to feedback into feedstock petrochemicals in the coming months.

“Europe currently has the lowest cost of ethylene production in the world based on cracking naphtha feedstocks,” senior manager for Petrochemical Analytics at S&P Global Platts, Rob Stier, said.

“However, these high margin are not expected to last much longer as buyers and sellers have to face reality in April and fix prices.”

Below are the latest facts.

Infrastructure:
**European PET recyclers report sold out volumes for April as the PET market, buoyed by increased food packaging and beverage bottle consumption during lockdowns, continues to buck the general polymer trend

**African polymer participants experiencing increased delivery times

Trade flows:
**European producers are increasingly active in North African polymer markets, sources say.

**Aggressive offers on polypropylene were heard from Middle Eastern and Asian producers into West Africa

**Mixed xylenes market remains tight despite reports of weakening demand

**Ethyl acetate imports from Asia drop. Imports from India typically account for 20% of the spot European ETAC market.

Prices:
**European paraxylene prices are at a 17-year low on a supply glut and downstream demand destruction.

**European polypropylene April contract offers are not fully tracking the monomer drop as producers hope to raise margins this month

**LLDPE C4 resin grade spot prices heard at parity or above LDPE on tighter supply, firm demand for flexible packaging into the food and pharmaceutical segments.

**European spot methanol prices are stabilizing, after falling over 40% since the beginning of March

**European caustic soda export prices jump to early 2019 levels as supply tightens on the coronavirus’ impact on the chlorine demand.

**Caustic soda supply set to tighten further in April, May with Q2 contract prices discussed at substantial increases.

**European export EDC spot prices crash on the substantial loss in demand for downstream PVC on world markets. FOB NWE prices hit their lowest since October 2001.

**Ethyl acetate prices rise, jumping 20.5% since the end of March, due to the tight ethanol market, repurposed for the disinfectant industry, and reduced ETAC imports.

**MTBE spot remains on discount to Eurobob May swap. This is the lowest MTBE has been assessed against the gasoline front-month swap since S&P Global Platts began assessing Eurobob gasoline barge FOB AR swaps in October 2010.
Source: Platts

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