Spot propylene prices pushed higher across the globe

09-Dec-10
Spot propylene prices have moved higher in Europe, Asia and the US based on healthy demand as well as supply limitations in Europe and Asia due to a naphtha shortage, as per Chemorbis. The continuous increases seen over the past week in the upper end of the upstream chain were amongst other factors pushing spot propylene prices up in these regions. Crude oil prices breached the US$90/barrel threshold, a two-year-high level, in day trade towards the end of last week before retreating gradually to settle above US$88/barrel in the earlier days of this week as the appreciating dollar put a cap on the surge. Spot naphtha costs also jumped to record highs towards the end of the past week, with prices reaching the highest level of more than the last two years both in Europe and Asia. In Europe, naphtha prices on CIF basis rose over US$55/ton from the start of November, while Asian naphtha climbed by around US$75/ton on CFR Japan basis over the same period mainly due to tight naphtha supplies as a result of the diesel shortage inside China which has slashed naphtha availability in that country. Amidst bullish energy markets, spot propylene prices in Europe gained €15/ton on a weekly basis, with the total increase amount reaching €30/ton when compared to the start of November. Apart from higher upstream costs, one of the main drivers behind the recent surge in spot propylene prices was higher December contract settlements, which were done €22/ton above November propylene contracts this month. Cracker operators complained about their squeezed margins pointing to the mounting naphtha costs overshadowing the higher propylene contracts. In Asia, spot propylene prices have also firmed up by nearly US$30/ton on FOB Korea basis week over week, reaching a total increase of US$100/ton when compared to the start of November. The main reason behind this bullish trend was the supply tightness caused by reduced operating rates at crackers in response to the naphtha shortage stemming from a gasoil production switch at China’s refineries to meet the demand for this product in the country. The largest jump was seen in spot propylene prices in the US, with prices posting a massive jump of US$225/ton compared to the previous week’s notional level on rumors of a higher done deal last week combined with December polymer grade propylene contracts which settled with a US$66/ton increase. Market sources attributed the continuous hikes to the lack of resistance from derivative markets other than PP, which are absorbing the hikes despite the year-end slowness plus production problems at some of the country’s propylene makers.
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha