Declining upstream costs drove spot propylene prices lower in major markets of Asia and the US over the past week, as per ChemOrbis. However, spot propylene values in Europe managed to hold steady thanks to supply tightness that has persisted in the olefins market for some time amid cracker shutdowns across the region. The energy complex has been extremely volatile since H2-February amidst fluctuations that were followed by consecutive losses in crude oil markets. On the Nymex, crude oil futures for April deliveries edged up on Friday and settled up by over a dollar from the beginning of March. But, they were far from erasing the recent drops and still indicated a decrease of more than US$3.50/barrel with respect to a month ago. In Europe, ICE Brent crude futures for April deliveries represented a larger fall of around US$8/barrel with respect to a month ago, although they posted a tiny gain on Friday and edged up from early March.
Relentless losses in energy prices triggered additional drops in spot naphtha markets as well. After seeing four digit highs of around US$1050/ton in Europe and US$1015/ton in Asia in mid-February, spot naphtha costs softened by US$10/ton both in Asia and Europe week over week- representing US$80/ton decreases vis a vis a month ago in both regions. In Asia, spot propylene offers posted drops on a weekly basis due to lower naphtha costs while the bearish trend in the downstream PP market was also said to have contributed to these decreases. Spot propylene prices indicate a US$70/ton fall on a weekly basis after softening by another US$10/ton on Monday. The latest figures now indicate a cumulative decrease of more than a US$100/ton in a month. In the US, spot polymer grade propylene prices retreated by 2.75 cents/lb ( around US$60/ton) on DLVD USG basis week over week, bringing the total drop to a massive amount of 9.5 cents/lb (US$209/ton) from a month ago. Bearish news also came from the contract market, as March polymer grade propylene contracts were said to be settling down by 6 cents/lb (US$132/ton) after they posted increases for six months in a row, according to market sources in the country.
However, despite the persistently weakening upstream chain on a global scale and discouraging activities in the downstream PP market in Europe, spot propylene costs managed to hold steady in this region according to ChemOrbis. Accordingly, the latest propylene prices edged up on the week, while they showed no change with respect to one month ago. This situation was attributed mainly to tight olefins availability stemming from the ongoing cracker shutdowns across the region. Recently, there are plans to restart at a few crackers though, with Naphthachimie and Repsol resuming production at their crackers. Naphthachimie restarted their 745,000 tpa cracker, while Repsol restarted their 410,000 tpa cracker in Portugal in the first week of March, according to industry sources.