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Volume 29 / Issue 50 / December 12, 2006

Platts European and US Solvents Price Assessments Solvent Naphtha

FOB Rdam FD NWE
(US$/mt) (Euro/mt)
Solvent Naphtha (C9) 600 - 610 600 - 610 Northwest Europe
Toluene 785 - 790 680 - 690 The Northwest European market was assessed at Eur600-
Xylenes 820 - 825 710 - 720
White Spirit(14-195) 685 - 695 630 - 635 610/mt FD NWE, indicating a Eur10/mt increase on the week
Hexane(Special Grade) 675 - 685 720 - 725 with product availability was reported as good. One market
(¢/lb) FOB USGulf FOB Chicago source reported seeing buying interest at Eur590/mt FD NWE,
Toluene 39.00 - 40.00 36.00 - 37.00 which was not matched by an offer, as it was seen as too low.
Xylenes 42.00 - 44.00 38.00 - 39.00 The bulk market was pegged at $600-610/mt FOB Rdam, also
(¢/lb) FOB USGulf DER translating into an increase over last week which was mainly
Hexane 40.00 - 41.00 41.00 - 42.00
Hexane cts/gal 225.00 - 227.00 attributed to upstream developments. Last week, the solvents
market was responding to price increases in the upstream
Platts Global Oxygenated Solvents Price Assessments market, however this week, upstream prices had softened.
Premium unleaded 10 ppm gasoline closed December 8 at
FOB Rdam FD NWE FOB USGulf DER
(US$/mt) (Euro/mt) (US$/mt) (US$/mt) $572.75-573.75/mt CIF ARA, compared to the close
IPA 890 - 910 905 - 915 900 - 910 1234 - 1256 December 1 at $581.25-582.25/mt CIF ARA, indicating
Phenol (N) 1290 - 1300 1170 - 1180 1267 - 12781400 - 1444 (N) around a drop of Eur8.5/mt. Market participants reported
Acetone T1 640 - 650 - 728 - 749 873 - 893
Acetone T2 630 - 640 735 - 745 - 893 - 893
fairly good demand in solvent naphtha, though some market
MEK 960 - 980 945 - 955 1113 - 1146 1388 - 1432 sources expected incremental slowing down of business as
MIBK 1280 - 1300 1235 - 1245 1355 - 1377 1829 - 1851 the holiday season was approaching. One 500 mt deal was
E Acetate 1030 - 1040 915 - 925 1000 - 1020 1212 - 1234 reported done at $580/mt FOB Rdam, though other market
B Acetate 1020 - 1030 1045 - 1055 1212 - 1234 1344 - 1388
**Methanol 410.00 - 412.00 NA - NA participants pegged the market higher.
FOB DSP (190) FOB DSP (200)
US Ethanol (cts/gal) 285.00 - 290.00 300.00 - 305.00
(US$/mt) CFR China CFR SEA Solvent Toluene
Phenol 1340-1350 1350-1360
Acetone 715-725 740-750
*NWE methanol FOB Rdam price is in Euro/MT for T2 cargoes.
FD NWE prices in table based on spot lots of 20 mt in the German mkt. FOB based on larger
Northwest Europe
spot parcels for import/export. DER US prices in table based on spot lots sold on a delivered, The Northwest European market was reported firmer this
east of the Rockies basis in truckloads.
week, with participants reporting levels of Eur680-690/mt FD
European and US Chlorinated Solvents & Chlor-Alkali Assessments NWE, an increase of Eur20/mt on the back of developments
in the bulk market. One market source stated that weak
FOB Rdam FD NWE
(US$/mt) (Euro/mt) demand in the distribution market was proportionate to
Trichloroethylene 860 - 890 820 - 840 tight supplies, translating into a balanced market. Another
Perchloroethylene 570 - 590 520 - 540 source, however, stated that demand was very good and
Methylene Chloride 500 - 530 510 - 520
Caustic Soda 340 - 350 330 - 340 market sources were “looking at a contango in the next two
FD NWE (CP)
months,” . The same source also felt that an element of pre-
(Euro/mt) buying could be seen in the market ahead of the gasoline
Chlorine 200-215 season. Meanwhile in the bulk market, toluene prices were
FOB USGulf DER up $37.50/mt on the week mainly due to strong prices in
(US$/mt) (US$/mt) Asia and in the US and in line with the general rise in other
Trichloroethylene 1080 - 1102 1168 - 1213
Perchloroethylene 816 - 838 926 - 948 aromatics products. Two traders reported concluded deals at
Methylene Chloride 816 - 860 882 - 926 $750/mt CIF Germany during the course of last week,
FOB USG FOB Plant US Contract equivalent to around $740/mt FOB Rdam. By the end of the
Chlorine — 260 - 270 300 - 305 week however, as a result of the steep rise in global values,
Caustic Soda 250 - 280 $/mt 240 - 245 $/dst 290 - 300
European toluene was quoted at $780-800/mt FOB Rdam,
Notes: * Chlor-alkali prices are in $ or Eur per short ton with the exception of caustic soda FOB although sources deemed this offer level as too high. One
USG which is assessed in USD/metric ton.
source mentioned that material from Eastern Europe were

The McGraw Hill Companies

 PLATTS SOLVENTSWIRE
being offered around the $720/mt FOB mark, against buying
interest around the $680/mt FOB level. No business was
reported done for this Eastern European material.
United States
Effective Dec 18, some marketers of solvent toluene to
distributors FOB USG would increase prices by .05/lb, those
sources confirmed to Platts the trading week of December
12, 2006. However one major producer released a notice to
distributors that it would lower postings at the beginning of
December, adding an element of speculation with
distributors. Meanwhile, related barge nitration toluene
markets as of December 12 had spiked 27-30 cents/gal to
remain bid 293 cents/gal in the spot December market
versus prices a week ago that settled at a mean of 266
cents/gal FOB HTC. For now, solvent prices FOB USG to
distributors settled in parity to last week at 39-40 cents/lb.
Solvent Xylenes
Northwest Europe
The Northwest European market was reported at Eur710-
720/mt FD NWE, an increase Eur10/mt on the week, which
market participants attributed to bulk market dynamics. One
producer expected to see further price rises as a result of
firming energy complex prices and added that current
product availability was adequate to meet the demand.
Another market participant, in contrast, reported that there
was a “gap in the market, with not enough volumes of
molecules available. “A few market participants predicted
that in January, after the holiday season is over and demand
pickes up, prices are likely to climb, as product tightness will
become more apparent. Meanwhile in the bulk market,
mixed xylenes prices in Europe followed the rise in other
aromatics products at the end of last week, rising $32.50/mt
from the close December 1. The rise was also attributed to
surging values in Asia and in the US, where sudden
production issues brought bullish sentiments back into the
markets. A deal for December was reported at $825/mt FOB
Antwerp, for 2,000mt, the seller confirmed.
United States
Amid a reported acute shortage of xylenes in the Western
Hemisphere, some marketers of solvent xylenes would raise
prices to distributors FOB USG by .05/lb effective December
18, sources involved in the operations confirmed to Platts
the week of December 12, 2006. While trucked xylenes
settled flat to a week ago at 42-44 cents/lb FOB USG, related
barge market prices spiked 28-30 cents/gal to 293-295
cents/gal December FOB HTC. Rising arbitrage values in the
Far East as well as reports of unplanned operational
problems inhibiting production in the Gulf Coast raised
prices. Gains came after news of stronger Asia values and
2 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
ongoing operational problems in Europe that have further
exacerbated somewhat surprising global bullish movements
ahead of the New Year. An increasingly tight xylenes
scenario in Western Hemisphere markets reportedly was
inflamed after news emerged of acute domestic trader shorts,
potential linked to reduced or idled aromatics rates at Flint
Hills’ production plant in Corpus Christi; BP’s Texas City
production facility; Total’s production site in Port Arthur,
Texas and Valero’s production plant in Texas City.
White Spirit
Northwest Europe
The Northwest European Bulk market was reported at $685-
695/mt FOB Rdam, an increase of $5/mt on last week’s
assessed levels. However the free delivered market was reported
at Eur630-635/mt FD NWE, stable on the week. A producer
reported slowing down demand, as “customers did not want
full tanks for the end of the year,” due to their year end audits.
Another market source reported demand slowing down in the
Mediterranean, as a result of the weather getting colder and
the consequent decrease in DIY consumption. Meanwhile in
the upstream market, jet closed at $635.50-636.50/mt CIF ARA
December 8, in comparison to the close of December 1 at
$641.75-642.75/mt CIF ARA. Despite prices dropping by
around $6.25/mt on the week, solvents market participant the
were still responding to earlier upstream price increases at the
beginning of December.
Hexane
Northwest Europe
The Northwest European market was reported firmer this
week with the bulk market assessed at $675-685/mt FOB
Rdam, translating to $10/mt increase on the week, although
one producer saw the market higher at $730/mt FOB Rdam.
Meanwhile the free delivered market was assessed at Eur720-
725/mt FD NWE, also translating to Eur10/mt increase on
the week. Sources felt that the price increase was mainly due
to two developments. Firstly, market players reported
inadequate supplies to meet the current demand. Secondly,
market participants were still responding to a substantial
jump of around $45/mt in the price of physical naphtha
during the period of November 24 to December 1. However,
Last week, physical naphtha closed December 8 at $545.50-
546/mt CIF ARA, in contrast to the close of December 1 at
$562-562.50/mt CIF ARA, indicating that the upstream
market was softening.
United States
It could not be determined whether US hexane prices to
distributors would be affected by a major producer’s notice
 PLATTS SOLVENTSWIRE
sent to distributors that it would lower some of its solvents
prices amid other marketers’ planned December 18 increase
of trucked toluene and xylenes prices, sources involved in
the matter told Platts. Meanwhile, one USG source said it
“seems that Hexane is still a little tight around the world, we
however are in good supply.”
Isopropyl Alcohol
Northwest Europe
Producers reported squeezed margins, especially in Q3 and
Q4 of 2006, and as a result were holding out for continued
firm price levels in IPA even if feedstock propylene should
drop substantially in Q1 next year. According to producers,
IPA value should be at least Eur50-100/mt FD NWE above
current levels and as a result would not be tracking exactly
the projected fall in feedstock. “We will not pass the full
propylene decrease on because of the deterioration in
margins in 2006,” one producer said. Propylene producers
were eyeing a Eur20-30/mt FD NWE drop in Q1, although
consumers were aiming for a Eur100/mt FD NWE fall. Some
consumers were heard to have adjusted their ideas by about
Eur30/mt to accept a Eur70/mt decline, although no
settlement had yet been reported. In production news, a
source at Sasol said its 145,000 mt/year unit at Moers,
Germany, was running well.
United States
Bearish pressure on propylene prices saw a producer offering
down product a penny, with traders quoting the market at
56-58 cents/lb delivered, equivalent to $1234-1278/mt. One
major was heard offering 58 cent/lb down from earlier levels
of 59-61 cents/lb. Sources reported that with propylene
contracts relatively stable in December, the potential existed
for the market to level off in January. “No price increase has
been announces for January,” one source added. Upstream,
Refinery grade propylene bids were meanwhile firm at 34
cts/lb against offers not firm quoted around 36 cents/lb.
Phenol
Northwest Europe
Spot domestic prices moved down Eur20/mt FD NWE this
week as a number of participants confirmed accepting and
passing on the decrease seen in upstream benzene’s contract
price for December. Demand for BPA, caprolactum and
resins was reported continuing strong and as a result,
producers were optimistic about the market going forward.
In the export market, prices were quoted stable despite a
pick up in demand from the Chinese market. According to
sources, about 6,000mt was moving to China at present.
Meanwhile, in production news, Bayer was expecting full
3 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
operating rates at its BPA and PC units at Krefeld, Germany,
by December 21-22 once full carbon monoxide production
would be achieved by December 18-19, a company source
said. The units were currently running at 70% and 50%
O/R’s respectively.
United States
Spot exports were not still not feasible in the middle of
December as producers opted to cut operating rates rather
than offers. Notional spot offers were in the mid-to-high 50
cents/lb FOG USG, plus a $100/mt freight cost, put the price
out of reach for Asia where values were under $1,350/mt
CFR China. November’s CP fell nearly 5 cents/lb and was
likely to drop again in December following the 28 cents/gal
decrease in the benzene contract settlement at 332 cents/gal.
In the new year, however, phenol contracts may recover
some of the the lost ground from the fourth quarter as spot
benzene prices have soared nearly 36.5 cents/gal to 372.5
cents/gal from the beginning of December due to several
plant outages in Asia and the US that has driven demand for
spot material.
Asia
Asian phenol prices were unchanged at $1,340-1,350/mt
CFR China. Early this week, a 1,000mt cargo was heard sold
at $1,350/mt CFR China for early January delivery. Offers for
January cargoes had not yet emerged, but Chinese importers
and traders conceded that prices in the near-term will be on
a gradual rise due to tightening supply from key Taiwanese
and South Korean producers. Soaring feedstock benzene
prices was also cited by producers as a key factor for their
spike in offers. “With benzene prices moving up more than
$70/mt last week, it is inevitable that phenol prices will
have to keep up with the feedstock price jump,” said a
producer. In the Chinese domestic market, prices in
Huadong were under upward pressure following news of
Formosa Chemical and Fibre Corp’s outage of its No 2
aromatics unit in Mai Liao. “Buying sentiment in Huadong
was extremely bullish with most buyers not willing to take
short positions given the supply crunch in Asia. Any news of
a large unplanned outage that may possibly affect a
company’s phenol production capacity will boost buying
sentiment,” said a Chinese importer. Prices in the Chinese
domestic market on an ex-tank basis in Huadong were heard
at Yuan 13,400/mt, up Yuan 100-200/mt from prices last
week, while values in Huanan were stable at Yuan 13,500-
13,700/mt ex-tank. Offers from Shanghai Gaoqiao were at
Yuan 13,200/mt ex-works, unchanged from last week.
Meanwhile, offers from Beijing Yanshan were stable at Yuan
13,000/mt ex-works. In Southeast Asia, offers for bulk
cargoes were at $1,380/mt CFR SEA, while buying ideas were
at $1,350/mt CFR SEA. Downstream phenolic end-users were
heard to he holding sufficient stocks and were not eager to
purchase cargoes ahead of the seasonal lull in December and
January. On production news, South Korea’s Kumho P&B
 PLATTS SOLVENTSWIRE
Chemicals is in the process of ramping up production rates
following a small outage over the weekend due to a
mechanical fault. Kumho’s No 1 plant can produce 30,000
mt of phenol and 18,000 mt of acetone yearly, while its No
2 unit can produce 100,000 mt/year of phenol and 62,000
mt/year of acetone. The No 3 plant has a yearly capacity of
170,000mt of phenol and 100,000mt of acetone. A company
source estimated that Kumho’s weekend outage meant that
it had lost around 2,000mt of phenol and approximately
1,200mt of acetone, but stressed it would have no impact on
its export availability. China’s Sinopec Shanghai Gaoqiao
Petrochemical plans to shut down its 200,000 mt/year
phenol-acetone plant at Caojing, Shanghai, for 15 to 20
days for a cataylst change. The plant shutdown is tentatively
scheduled to begin on December 19.
Acetone
Northwest Europe
Spot domestic prices slid another Eur10/mt FD NWE this
week, tracking a similar fall in prices last week. Most
participants pegged levels around the Eur740/mt FD NWE
mark, and prices were likely to continue to slip due to
expectations of lower propylene numbers into the new year.
However, due to poor margins, producers were looking to
maintain current price levels, although supply-demand
fundamentals would dictate value going forward. Export
prices in the T2 market were quoted stable this week at the
$630-640/mt FOB Rdam level, due to weak demand and
depressed prices in Asia, sources said. As a result, little
volume was heard heading over to that region. Prices to
Turkey were meanwhile cited around the $730-740/mt CIF
mark, while T1 prices moved up, to $640-650/mt FOB Rdam,
sources said.
United States
Following a rollover of acetone prices for the fourth quarter
at 40.5 cents/lb ($893/mt), at least one producer was heard
to have issued a 5 cents/lb increase to be implemented in
January. The producer was heard to have issued the increase
to be effective immediately but a source had said the
increase if accepted would have to wait until January. Supply
was tight and this kept prices high enough to close the
arbitrage window to Asia. Producers were still sending
contract cargoes to Asia but an exporter said producers’ spot
export offers were in the mid-30’s cents/lb, close to $771/mt
FOB, which was too high for an Asian market where spot
prices were under $725/mt CFR China. Estimated freight
costs to China were at $90/mt. Producers could not lower
prices to take advantage of the arb as they were faced with
cost pressure from upstream phenol prices that were on the
rise from escalating benzene values. Spot benzene has
jumped 36.5 cents/gal to 372.5 cents/lb from the beginning
of December from a series of outages in the US and Asia. US
4 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
acetone T1 price is US domestic truck/rail price for solvent
use. T2 price is a US domestic truck/rail price, MMA use
Asia
Spot Asian acetone prices were pegged higher in tandem
with trades being concluded at higher levels in eastern
China. A producer said that it had sold a 1,000mt acetone
cargo at $725/mt CFR eastern China, Huadong region with
usance. Offers for cargoes moving into eastern China were
subsequently heard at $735-740/mt CFR China, but bids
were heard to still be languishing at $720/mt CFR China. In
southern China, a wide bid-offer gap was hampering spot
trades. Chinese importers were maintaining buying ideas at
$720/mt CFR China with usance, while offers were at $730-
740/mt CFR China from producers. In the Chinese domestic
market, on an ex-tank basis, imported cargoes in eastern
China were sold at Yuan 6,900-7,000/mt ex-tank. In
southern China, prices gained Yuan 50/mt to 7,100-
7,150/mt ex-tank. Offers from Shanghai Gaoqiao were at
Yuan 6,900-7,000/mt ex-works, unchanged from offers last
week. Meanwhile, offers from Beijing Yanshan were stable at
Yuan 6,910-6,980/mt ex-works. Meanwhile, inventories in
the south were heard to be dwindling, as compared to the
eastern region. Import prices in Southeast Asia were
unchanged at $740-750/tonne CFR SEA amid negotiations
for December. Offers were heard up $10/mt at $760/mt CFR
SEA. In Singapore and Malaysia, ex-tank prices were stable at
$730-740/mt. On production news, South Korea’s Kumho
P&B Chemicals is in the process of ramping up production
rates following a small outage over the weekend due to a
mechanical fault. Kumho’s No 1 plant can produce
30,000mt of phenol and 18,000mt of acetone yearly, while
its No 2 unit can produce 100,000 mt/year of phenol and
62,000 mt/year of acetone. The No 3 plant has a yearly
capacity of 170,000mt of phenol and 100,000mt of acetone.
A company source estimated that Kumho’s weekend outage
meant that the company had lost around 2,000mt of phenol
and approximately 1,200mt of acetone production, but
stressed it would have no impact on the company’s export
availability. China’s Sinopec Shanghai Gaoqiao
Petrochemical plans to shut down its 200,000 mt/year
phenol-acetone plant at Caojing, Shanghai, for 15 to 20
days for a change of cataylst. The plant shutdown is
tentatively scheduled to begin on December 19.
Methyl Ethyl & Methyl Isobutyl Ketones
Northwest Europe
MEK: Prices were expected to remain at the Eur945-955/mt
FD NWE for the duration of the month as previous
production issues have now been fully resolved. “Prices have
reached a certain peak and will stay there for a while,” one
producer said. Inventory levels were still low due to the
extensive output problems, and with demand seen as
 PLATTS SOLVENTSWIRE
“reasonable” for this time of year, producers were confident
of maintaining current price levels. MIBK: Prices softened
Eur15/mt to an average of Eur1,240/mt FD NWE, mainly
due to weak demand. There was every likelihood that the
market would weaken further due to a bearish outlook on
acetone and propylene, sources said, although the price floor
had yet to be determined.
United States
December demand for ketones was heard to be soft
reflecting the generally slow demand season for solvents.
There was not reported conclusion for contract prices yet in
December, and domestic prices were unchanged as a result
for methyl ethyl ketone at 63-65 cents/lb and for methyl
isobutyl ketone at 83-84 cents/lb Delivered East of the
Rockies. No new price initiatives were heard for MIBK, while
Celanese issued a 3 cents/lb MEK price hike for the Americas
effective January 1, 2007. MEK export prices were steady on
either side of $1,129/mt FOB, but no spot deals were
reported as arbitrage windows were difficult to pry open.
MIBK spot export pricing straddled $1,366/mt FOB, but like
MEK exports deals were not reported.
Ethyl Acetate
Northwest Europe
Spot domestic prices fell Eur35/mt this week to sit at an
average of Eur920/mt FD NWE. One source cited levels
around the Eur930-940/mt FD NWE mark, while another
source quoted prices at Eur900-910/mt FD NWE. The above
assessment is a normalization of both sets of indications. A
UK producer also confirmed doing business “below the
Eur930-940/mt FD NWE” mark. Previous levels of Eur950/mt
FD NWE and above had disappeared from the market due to
better availability of product, sources said. Looking ahead,
prices were poised to stabilize around the Eur900/mt FD
NWE mark, as an anticipated drop in feedstock ethylene
would be offset by firm prices in the acetic acid market,
sources said.
United States
Latin American ETAC prices were offered at $1,200/mt on a
CFR delivered basis this week, equivalent to around $900/mt
on an FOB basis. Domestic ETAC continued to be pegged in
a wide range in the high 40s to low 50s cents/lb sources
reported, with prices failing to move due to dwindling end
of year demand. One major however announced it would
increase prices 2 cents/lb in January. Upstream, spot
methanol activity was muted and firm bids and offers were
not seen on Tuesday. January values in relation to
December, however, were at a premium. January notional
prices at the start of the month were a penny backwardated
to December prices.
5 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
Butyl Acetate
Northwest Europe
Despite the feedstock market described as firm and tight,
prices in the butyl acetate market dipped Eur20/mt FD NWE
this week, mainly due to a slowdown in demand as the end
of the year was drawing to a close. A distributor in Germany
talked prices at Eur1,020-1,030/mt FD, although other
sources in the market disputed this, saying that derivatives
could not possibly be priced lower than feedstocks. Butanols
closed December 7 at Eur1,045-1,060/mt FD NWE. In
addition, limited imports restricted availability of product
although this was offset by the lower demand.
United States
Despite global butyl acetate prices continuing to fall with
the end of year demand cycle, the market remained pegged
at 62 cents/lb delivered East of the Rockies, railcar basis.
Butanols were not looking strong with an open arbitrage
window to Asia. Looking to January, market watchers
believed the domestic market could swing higher if natural
gas prices behave as they traditionally have by increasing in
the winter months, which would put pressure on chemical
grade propylene prices to increase.
Chlorinated Solvents and Chlor-Alkali
Northwest Europe
Chlor sols: Production issues in November would continue to
affect one major’s December offering although a company
source was confident that full operating rates would be
achieved by the end of this month. On price for December,
producers said they were being very firm with their offer of
rollover and not conceding any ground. One seller claimed
that its main buyers were not even requesting discounts as
the market was well balanced and demand holding up well.
On the bulk market for export shipments, sources said there
had been some price detorioration due to sluggish end year
demand. One seller was offering methylene chloride bulk
cargoes at $500/mt FOB. Perchloroethylene bulk cargoes were
also pegged lower. Chlor Alkali: Buyers continued to resist
moves by two majors to increase prices in December ahead of
a more general price hike attempt for the first quarter of up to
Eur60/mt FD. Sellers claimed the fundamentals were there for
a rise and that buyers were just digging in their heels because
of the year end. “The direction of the market is clear,” said
one seller. “I think buyers are just holding back as not
everyone is going for a move up in December,” said another
market participant. One producer said it was seeking a
Eur30/mt hike from Jan 1. It noted the larger increase offers
from other producers but said with its prices already up to
Eur350/mt in Dec, it had less room for manouvre than
competitors. In Italy, where prices were seen at the upper end
 PLATTS SOLVENTSWIRE
of the European spread in Nov/Dec pegged between Eur340-
360/mt FD, levels were now under pressure from imported
cargoes from the Black Sea and North Africa. One supplier
said its volumes into the region had been sharply curtailed in
December. But, a local seller said it had not been negatively
impacted due to the closure of capacity at Porto Maghera
which had restricted availability. Operations there were said
to be at 60% O/Rs in December while its other two sites in
Italy were running normally. Meanwhile, demand for chlorine
from the vinyls chain would be cut sharply in December as a
number of PVC buyers would close down for up to two
weeks. PVC producers were hoping to hold prices flat despite
the fall off in sales. It was not yet clear whether they would be
successful in this bid.
United States
Price movements for domestic chlorinated solvents going into
mid-December, were not going ahead market sources said.
Upstream chlorine prices were under bearish pressure and
chlor-alkali producers were decreasing operating rates to
match sluggish demand in other downstream markets.
Upstream ethylene contracts for December were still unsettled
and some doubt circulated that the full 4 cents/lb decrease
talked in the market would only come in at about 2 cents/lb.
November ethylene contracts were settled at 44.5 cents/lb FD
USG. Domestic perchloroethylene was in the low to mid-40s
cents/lb for solvent grade material, with methylene chloride
in the low 40s cents/lb. Trichloroethylene was at a strong
premium to the other products, moving in the mid-50s
cents/lb, delivered east of the Rockies. Chlorine: Weak vinyls
demand was still plaguing chlor-alkali operating rates in
December. Vinyls operating rates in November were heard
near 78%, slightly lower than October, but much higher than
earlier estimates of low 70s%. Official chlor-alkali operating
rates for November were not yet released, but one industry
executive estimated November operations at about 86-87% of
capacity. Previous chlor-alkali estimates were closer to 80%.
December operations would be even lower than November,
the source said, estimating operations would average about
82-84% across the industry. Chlorine prices were under
pressure from the weak demand, but no price decreases were
detected yet. Caustic soda: Export prices were rising in the
second week of December, market sources said, with prices
talked in a range of $250-285/mt, up from $240-245/mt at the
start of the month. One seller said that deals were being done
as high as $285/mt, though another producer said the market
was closer to $250/mt. Nevertheless, export prices were
moving up, which could lend some support domestic pricing.
Spot material was talked near $240 per short ton this week
and one source said prices would strengthen as chlor-alkali
rates continue to slide. The $40 per short ton price increase
that producers are pushing for in January is expected to pass
to the market, at least partially, one producer source said this
week. Contract pricing stood at $290-300 per short ton at the
start of December. Regarding contract negotiations for
product supplied into the alumina market, one producer said
6 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
no settlements were attained yet. With export prices rising,
the source said a settlement would likely come soon.
Ethanol
United States
The ethanol distribution network was reported buying
ethanol where available before higher prices hit the market
in January. “The industry will monitor sales,” one trader
added, quoting December prices at $285.00-290.00/mt FOB
DSP for 190 proof, and $300.00-305.00/mt FOB DSP for 200
proof grades. Q1 pricing was widely expected to be 15 cents
over the fourth quarter value, with talk around a 25 cent
increase now dispelled. Meanwhile beverage ethanol was
reported even more bullish, with 10 cent increases for proof
grade, equating to a 19 cent increase for 190 proof , and a
20 cent increase for anhydrous grades.
Methanol
Northwest Europe
Spot T2 methanol prices started to rise this week on rumors of
delayed vessels coming in from abroad, coupled with low stock
levels in the system and healthy demand. A deal for a Q1 strip,
for 1,000mt to be loaded in January, February and March, was
concluded late Monday between traders at Eur420/mt FOB
Rdam, the buyer confirmed. The buyer bought the Q1 parcel in
anticipation that the European methanol contract price for the
first quarter would be settled at a much steeper level than the
Q4 CP of Eur395/mt FOB Rdam. So far, Methanex has
nominated an increase “in the magnitude of 15%” over its Q4
reference price of Eur400/mt, according to a company source.
Other European producers such as Helm and Statoil reportedly
indicated a price level around Eur440/mt FOB Rdam.
United States
In the US, January activity was still slim and firm bids and
offers were not seen on Tuesday. January values in relation to
December, however, were at a premium. January notional
prices at the start of the month were a penny backwardated to
December prices. The slip into contango was attributed to tax
liabilities for inventories held at the end of the year. Cargoes
for December lifting were talked at 145-146 cents/gallon.
News Briefs
Arab Gulf states to produce 25%
of world's petrochemicals by 2011
Kuwait City—The six oil producing Gulf Arab nations
comprising the Gulf Cooperation Council are expected to
 PLATTS SOLVENTSWIRE
produce 25% of the world's petrochemicals by 2011, a senior
Kuwaiti official said Tuesday. The expected investment
needed to realize that goal by 2011 would amount to an
estimated $88 billion, Kuwaiti finance minister Bader al-
Humaidi said in a speech opening a petrochemicals
conference in the emirate. The six GCC states include Saudi
Arabia, Bahrain, Oman, Qatar, Kuwait, and the United Arab
Emirates. Petrochemical production within the six nations
hit 40 million tons in 2005, which accounted for an
estimated 7% of total international petrochemical output for
that year according a study released this week by the Dubai
Chamber of Commerce, that was carried by the Kuwait
News Agency on Monday. Al-Humaidi said he expected that
level of production to more than triple by 2011. The
chamber's study did not estimate regional petrochemical
production for 2006. The GCC member countries' total
investment in petrochemicals for 2005 was recorded at $29
billion, or 60% of the region's investment in the industrial
sector for that year, the commerce study said. Saudi Arabia's
production constituted 76% of the GCC member's total
output, followed by Qatar at 11%. Some 55 petrochemical
companies were in operation in 2005 throughout the GCC
which employed a total of 153,000 workers or 20% of the
GCC's total manpower in the industrial sector, the study
noted. The third largest regional petrochemical producer in
2005 was the UAE with its production accounting for 6% of
the total GCC's output in 2005, the study added.
Argentina's construction boom
boost demand for petrochemicals
Buenos Aires—Argentina's bustling construction industry
is pushing up demand for formaldehyde, methanol and
polymers, helping boost earnings for producers of these
products. The construction has been a motor of
Argentina's recovery from a 2001-2002 financial crisis,
rising by more than 20% a year since then, or more than
double the economy's 8-9% annual expansion since 2003.
After the financial crisis, money was plowed into property
because it was considered a safer investment. And
investment in real estate was cheap. Furthermore, the two-
thirds devaluation of the Argentine currency made
construction costs cheap in dollar-terms, particularly the
foreign investors that entered the market. These fueled the
construction of new homes, which accounts for 50% of
Argentina's property market, as well as new hotels,
shopping malls, office buildings and public infrastructure.
The spending came to account for 60% of total investment
in the economy. This helped Solvay Indupa, the country's
leading maker of polyvinyl chloride, boost its profit by
6.8% to Pesos 101.8 million ($33.3 million) in the first
three quarters of 2006, from Pesos 95.3 million in the year-
earlier period. At the same time, its sales rose 17% Pesos to
1.4 million from Pesos 1.2 million, according to its most
recent financial statement, issued in November. According
to a recent government report, the products that have seen
the greatest growth in Argentina include acetic acid and
7 Copyright © 2006, The McGraw Hill Companies
VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006
methyl isobutyl ketone, which are used in paint, paint
thinners and solvents; formaldehyde for particleboards;
and PVC for window frames, water pipes and power cables.
Orders also are on the rise for styrene products for
insulation foams and fibers. Now, however, the
construction boom is seeing its first signs of slowing.
Property prices in Buenos Aires, the country's biggest
market, hit a peak in recent months after four years of 8%
annual growth. Turnover times for selling are getting
longer. What's more, salaries have not grown at the same
rate as property prices, leaving many people out of reach of
buying or building homes, said Fausto Spotorno, chief
economist at Orlando Ferreres & Asociados, an economic
research organization in Buenos Aires. In local currency
terms, property prices have surged 300% since a two-thirds
devaluation of the peso in 2002 while salaries have risen
only 90%, Spotorno said. These factors are prompting some
investors to seek better returns elsewhere such as
government bonds, cutting investment in construction.
"We expect construction to show strong growth next year,
not as spectacular as this year, but high," said Jose Maria
Fumagalli, executive director of Argentina's Chemical and
Petrochemical Industry Association. Pablo Lara, director of
Estrateco Consultoras, a business consultancy in Buenos
Aires, said he expects construction to grow 10-12% in 2007
after an expected 16% expansion this year. "Makers of
building supplies will continue to see sales grow but at a
lower rate," he said. One reason for the slowdown in
construction in August, September and October is that
many property developers made one-time purchases of
building materials at the start of projects to keep down
prices in the face of 10% inflation, said Lara. A surge in
state spending on housing and public infrastructure like
PVC water pipes in 2007, a presidential election year, could
make up for some of the slowdown in home building.
President Nestor Kirchner "tends to use public funds to
build state housing for lower-income families," Lara said.
PetroChina's Lanzhou maleic
anhydride plant blast kills three
London—PetroChina's Lanzhou Petrochemical Corp
200,000 barrels/day refinery and petrochemical complex
at Lanzhou was hit by a blast Monday afternoon, killing
three people, the Lanzhou Daily reported. The accident
happened around 1400 hours local time (0600 GMT),
when an explosion hit the condensation water tank at
the company's 20,000 mt/year maleic anhydride facility.
This facility, located in the refinery's additive complex, is
listed as one of the key upgrading projects of the refinery
for the year of 2006, with an investment of Yuan 200
million ($25.53 million). The MA plant was put to
operation on November 13. This is the third explosion at
the Lanzhou refinery this year. The first happened on
May 31, when an explosion at a chemical unit killed four
workers. This was then followed by another accident on
June 28, when a gas leak at the refinery's 3 million
 PLATTS SOLVENTSWIRE VOLUME 29 / ISSUE 50 / DECEMBER 12, 2006

mt/year residue fluid catalytic cracker caused a blast,
killing one fireman. Lanzhou's refinery and petrochemical
complex is located in the west of Lanzhou city, close to
Yellow River.
NYMEX January crude settles
20 cents lower at $61.02/barrel
New York—January crude futures on the New York
Mercantile Exchange settled 20 cents lower at $61.02/barrel
Tuesday, amid uncertainty over the outcome of OPEC's
meeting later this week and a day a head of weekly US
inventory data. Prices briefly touched an intra-day high of
$62/barrel in early trading on comments from some OPEC
ministers that a production cut was possible at Thursday's
meeting in Abuja. But other comments suggesting a cut was
far from certain muted any gains. The front of the crude
curve continued to send spread traders on a roller coaster
ride due to tightness in supply/demand balances, despite the
fact inventories at the NYMEX delivery point in Cushing,
Oklahoma, last week were the highest recorded by the
Energy Information Administration. The January/February
spread, which settled at minus $1.14/barrel Monday, traded
out to a high of minus 88 cents before settling at minus 97
cents Tuesday. Gyrations in the front spread have made for
choppy trading in the outright market, but prices have
remained on either side of $62.50/barrel for the past ten
days. Analysts, meanwhile, were projecting a draw of 1.6
million barrels in crude stocks in Wednesday's petroleum
reports. They also forecast a 1.5-million barrel gain in
gasoline stocks and an 800,000-barrel drop in distillates.
January heating oil settled 19 points lower at $1.7224/gal,
with an early rally fading as higher-than-normal
temperatures hit prices. January RBOB settled 12 points
higher at $1.5970/gal and January unleaded gasoline settled
38 points lower at $1.5950/gal.

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 2006

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The companies and individuals who consistently set a high standard of excellence within the energy
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2006 Platts Global Energy Awards winners are:

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Commercial Technology of the Year Hydrocarbon Producer of the Year

CURRENT Communications Group Williams

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EcoEléctrica Duke Energy

Downstream Business of the Year Lifetime Achievement Award

Anonima Petroli Italiana SpA (API) Paul M. Anderson of Duke Energy

Emissions Energy Project of the Year Marketing Campaign of the Year

Arizona Public Service Company S-Oil Corporation
Principal Sponsor and GreenFuel Technologies Corporation
Petrochemicals Company of the Year
Energy Company of the Year SABIC
Iberdrola
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