Global propylene costs rise

19-Apr-10
Propylene moved higher to US$1315/ton on FOB Korea on April 16 in Asia - a US$75/ton increase vs price levels of beginning of April and a US$40/ton increase for the week. As per Chemorbis, behind this firming trend are the increased export opportunities to Latin America amid persistent production problems in the region, especially in Japan, along with maintenance shutdowns. Unexpected outages were seen at two of Mitsui Chemicals’ propylene plants in Japan with 420,000 tpa capacity on April 10-11. The plants are still closed and the company is yet to disclose the restart dates. Nippon Oil’s 140,000 tpa propylene plant in South Korea is to be halted for 32 days of maintenance work during April-May. The company’s other propylene plant in Japan with 260,000 tpa capacity is to shut for an unexpected maintenance of 19 days, starting April 21st, due to a mechanical problem. Formosa has shut its 250,000 tpa propylene plant in Taiwan on April the 15th for 40 days. These developments have taken a toll on the PP market as prices in China have moved up in the local and import markets on the back of the higher propylene costs and reduced stock levels with sellers. A firm outlook is expected over the short term as sellers’ offer levels firm up, propped by the bullish upstream market. Similarly, in Southeast Asia, a firm PP scenario prevails in the market as two major regional producers had already announced their May homo-PP offers with US$20-40/ton increases over April. One of these producers also reported deal conclusion at prices equal to their new offer levels. In Europe, spot propylene prices increased by €70/ton month on month, and by €35/ton since the beginning of April, bringing spot propylene offers to €1045-1055/ton FD NWE. Tight overall supply levels in the region have supported increases in spot prices. Some offers were heard at the level of €1090-1120/ton although no deals were reported at these levels. However, according to some market sources in the region, deals could be concluded at €1050-1080/ton if there are materials to be offered. Total has restarted its steam cracker in Carling, France at the end of March, operating at 70% capacity. Shell lifted the force majeure from its’ 900,000 tpa cracker in the Netherlands on April 1st. In the US, April propylene contracts were raised by US$154/ton (7 cents/lb) over March contracts, which had settled with US$110/ton (5 cents/lb) increases. The current contract price for the month stands at US$1665/ton (75.50 cents/lb) on delivered USG basis for polymer grade propylene and at US$1630/ton (74 cents/lb) for the chemical grade propylene contract. The overall availability has still not seen any relief although buyers believe that prices have reached the peak levels and therefore they have started to resist higher offer levels. Currently, spot polymer grade propylene offers are at US$1716-1722/ton and refinery grade offers are at US$1218-1229/ton in the region.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha