Monomer prices in global markets have been strong since the beginning of this year and continue to provide support for rising polymer markets, as per ChemOrbis. Among these monomers, spot propylene prices recorded noticeable increases in major markets including Asia, Europe and the US over the past week mainly due to strong naphtha markets. In Asia, spot naphtha prices reached US$960/ton on CFR Japan basis on Friday. The most recent level represented a US$10/ton increase week over week, while it showed a larger gain of US$45/ton when compared to early January. Needless to say, firmer naphtha costs and healthy demand from the downstream markets propped up spot propylene. In a weekly comparison, spot propylene prices rose by US$50/ton on FOB South Korea basis, and surged by over US$100/ton on CFR China basis, according to market sources. The recent levels were reported just before Chinese players entered their one week long Lunar New Year holiday, and spot propylene market has soared by a cumulative US$165/ton on FOB South Korea basis since the year started. In Europe, limited supply in some parts of the region combined with sellers’ wishes to improve their margins were said to have pushed spot propylene values modestly higher during last week. Several propylene producers stepped out from the market in a bid to wait for February propylene contracts to settle amid expectations of significant increases driven by firm naphtha prices during the month. Since January started, spot naphtha prices rose by US$35/ton on CIF NWE basis, while prices gained US$15/ton over the past week, as per ChemOrbis. In tandem with rising naphtha values, spot propylene costs saw a small gain of around €5/ton (US$6/ton with recent parity) last week.
Similarly, spot polymer grade propylene prices recorded sharp increase in the US market following firmer refinery grade propylene costs. Spot polymer grade propylene prices surged by around US$110/ton (5 cents/lb) over the week. Another bullish week added to the already firm expectations about a significant rise in February propylene contracts. Some players reportedly expressed predictions for massive increases of up to US$220/ton (10 cents/lb) for new settlements, market players claimed.