Propylene firms in Asia, stablises in Europe and US

24-Aug-10
Spot propylene prices in Asia remained firm over the past week, with supply limitations pushing prices higher despite the ongoing decline in crude oil prices, as per Chemorbis. Meanwhile, spot propylene prices in Europe and USA were mostly stable during periods of relatively limited market activity. In Asia, spot propylene prices have firmed up by nearly US$15/ton FOB Korea when compared with the end of last week, with tight supply being cited as the main cause of higher propylene prices in the region. Supply limitations have thus far been able to overcome the impact of the ongoing reduction in crude oil prices on the spot propylene market, with propylene prices continuing to firm up even as crude oil slipped another US$2/barrel over the past week to below US$74/barrel threshold for the first time since the beginning of July. Supply is said to be particularly tight in Northeast Asia, although buyers in Southeast Asia are also complaining of limited supplies as propylene sellers within the region are diverting their cargoes to Northeast Asia where higher prices are obtainable. Japan’s Tonen Chemical began a month long maintenance shutdown at its 300,000 tpa propylene capacity cracker last week, while Tosoh experienced an unexpected shutdown at its 270,000 tpa propylene cracker at Yokkaichi that was resolved within a few days leading to cracker restart. In the NorthEast, Formosa had to shut one its 2 RFCC units in Taiwan for unexpected maintenance work. In Southeast Asia, Thailand’s Rayong Olefins has moved the date for a scheduled shutdown at its 600,000 tpa propylene cracker from 2011 to November 2010, while PTT is running its 310,000 tpa propylene capacity I4-1 cracker at about 70% after the restart date at the cracker had to be postponed from August 4 to August 13. In Europe, spot propylene prices were reported mostly steady over the past week as most players await the settlement of the September contract in the region before undertaking major operations. The holiday season has resulted in lower spot demand this month, although sellers were generally said to be comfortable with their inventories and feeling no pressure to sell. Most players predicted that the September contract would be settled at levels close to the August settlement to reflect fluctuating crude oil prices as well as the fact that the current spot quotes seen in the market stand very close to the August contract level. In the US, spot offers for polymer grade propylene were reported unchanged week over week following a quiet trading week in which no spot deals were reported. Spot prices for refinery grade propylene were down slightly over the past week, causing the gap between offers for polymer grade and refinery grade propylene to widen to US$292/ton. In supply news, US propylene inventories were reported 9% lower week over week.
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