Weekly Chains Update & Model Marks

Research evidence excerpt

Weekly Chains Update & Model Marks

IdeaM

MS Chemicals Weekly

that incremental length weighed on the market, as high producer inventories and active

US-based import suppliers outweighed cost support from stronger feedstock and energy

values.

North America Polypropylene (PP) market update: Spot domestic prices were flat week-

over-week (FOB Houston, railcar), and spot export prices were flat week-over-week (FOB

Houston, railcar). Export opportunities have reportedly declined due to lower global

prices. In Mexico, sources reported more active buying this month due to converters

needing to replenish inventories. Reports note no issues with local production amid

mostly available supply. Preliminary June operating rates were estimated at ~80% with

inventory days having declined during the month to the ~mid-to-high 30s.

North America Caustic Soda market update: in the first half of July, commentary

reflected an incrementally tighter market than end-June levels. Demand was reportedly

stable-to-slightly higher in the first half of July. In export markets, sources report that

contracts have been steady relative to June, though spot export activity has been driven

lower by elevated freight costs and declining foreign prices. On supply, sources reported a

headwind to availability from reduced operating rates relative to June, driven by lower

chlorine demand. In-service capacity was estimated up ~3-5% month-over-month. This

past week, spot caustic soda prices were assessed flat (FOB USG) week-over-week amid

continued limited spot market activity. On exports, reports indicated stronger resistance

to US prices in Brazil, as the market there was well supplied. US exports to Brazil

substantially increased in June relative to May.