Over the past week, propylene prices followed opposite paths in Europe, Asia and the US, as per ChemOrbis. Higher spot naphtha costs when compared to early July pushed spot propylene offers up in Europe. August propylene contracts, that started to settle up over July on Friday, reinforced the market strength. However, the Asian and US markets saw drops in spot propylene costs albeit by modest amounts owing to recently volatile upstream markets.
After fluctuating during last week, crude oil prices on Nymex and offers for ICE Brent crude for September deliveries stood slightly below the levels of a week earlier. Spot naphtha prices were down by US$30/ton on CIF NWE basis in Europe, while they fell US$40/ton on CFR Japan basis in Asia in weekly comparisons. Nonetheless, both levels still indicated increases of US$60/ton and US$110/ton with respect to the start of July.
In Europe, spot propylene costs surged €60/ton on FD NWE basis week over week, boosted by still high naphtha prices in the region, bringing the total increase to €140/ton since early July. The olefins market was calm in terms of trading for most of last week ahead of August contract settlements, On Friday, news that an initial August propylene contract was settled up €130/ton at €1065/ton FD NWE over July ended three consecutive months of decreases. Market players commented that some buyers were not happy with the higher contract level considering factors including economic woes and slow summer conditions in Europe. Unlike the firm scene in Europe, spot propylene values softened for another week in Asia despite an unexpected shutdown in Japan, as lower naphtha costs weighed down on the market, as per ChemOrbis. Nonetheless, the spot propylene market had recorded relentless increases during the first half of July. Last week, spot offers continued to erase the previous gains with propylene costs moving down by $10/ton on FOB South Korea basis with respect to the previous week. Now, the recent values stand only US$10/ton above early July levels. On the supply side, Japanese Keiyo Ethylene shut its Chiba cracker due to a mechanical issue for repair work. The restart date of the cracker, which produces 400,000 tpa of propylene was undisclosed, markets sources reported. Plus, Taiwanese CPC postponed the start-up of its new residue fluid catalytic cracker (RFCC) from mid August to late August due to several awaited permits.
In the US, spot propylene prices were slightly down by 0.25 cent/lb (around US$5/ton) on DLVD USG basis week over week. The recent values still indicate a 2 cents/lb (US$44/ton) increase since the beginning of July. Amidst a weak atmosphere in the spot market, initial August polymer grade propylene contracts were revealed with rollovers from July, with some players expecting steady to 1-2 cents/lb (US$22-44/ton) lower settlements. In production news, Petrologistics reportedly planned to restart its PDH unit by early this week after shutting the 658,000 tpa propylene unit due to technical issues on July 21. At the same time, two companies shut their crackers in the country recently. Flint Hills Resources shut its cracker in Port Arthur due to a leak early last week for an estimated one week, industry sources said, while Chevron Phillips Chemical brought its cracker offline on July 21 due to a lightning strike. The crackers have capacities of 617,000 tpa and 816,000 tpa, respectively.