Global propylene prices continued to soften this week as spot propylene prices lost ground in Asia, and November contract prices were nominated with decreases in USA and settled lower in Europe, as per ChemOrbis. However, spot prices gained ground in Europe and the US on the strength of firmer energy prices and limited availability within Europe, although European sources commented that last week’s gains in spot prices may prove to be mostly temporary. In Europe, an initial November propylene contract was settled with a decrease of €55/ton from October last week. The drop in the initial settlement for November was attributed to lackluster derivative demand and the fact that spot naphtha prices were lower in October vs September. Producers expressed hope that a second contract would be concluded with a smaller decrease which would better protect cracker operating margins.
While the initial November contract price was settled lower, spot propylene prices rose €35/ton week over week as prompt supply of polymer grade propylene was said to be limited. One propylene buyer said that export sales and lower cracker operating rates have helped restore balance to the market, although other sources predicted that supply would begin to lengthen again later in the month as Polimeri’s Dunkirk cracker, which was unexpectedly shut after an explosion at the site last week, was expected to resume production by mid-November. The cracker has a propylene capacity of around 180,000 tpa.
In the US, an initial November polymer grade propylene contract was nominated last week with a decrease of 4 cents/lb (US$88/ton) vs the October settlement, and at a decrease of 3.5 cents/lb (US$77/ton by a second producer. November propylene contracts are expected to decrease by 4-10 cents/lb (US$88-220/ton) after the massive drop of 14 cents/lb (US$309/ton) reported on the October settlement, with most players’ expectations centering on a range of 5-7cents/lb (US$110-154/ton). While players widely agree that the November contract prices will be settled lower than October, spot prices moved higher over the past week on stronger energy prices while demand was said to have picked up somewhat after the steep declines recorded over the past month. Spot deals for polymer grade propylene were reported at levels 3.25-4 cents/lb (US$72-88/ton) higher when compared with the most recent done deal levels reported two weeks ago.