Ethylene, propylene supply tightens in Europe on production issues

European ethylene and propylene supply has tightened amid a spate of production issues, though the impact of this on spot prices is being moderated by poor derivatives demand, as per sources reported by Platts. Market avails have been constrained by the prolonged outage at Naphtachimie's 745,000 tpa cracker in Lavera, France, which has been on unplanned shutdown since December and is only expected to be back on stream in H1-March. Also, Versalis' 380,000 tpa Dunkirk steam cracker in France has been shut for up to 10 days for minor repairs, and is expected to restart later this week. LyondellBasell has declared force majeure for about four weeks on propylene supply out of its Muenchsmuenster site in Germany, effective mid-March, following technical problems with the 400,000 tpa cracker. PropanChem's 350,000 tpa propane dehydrogenation plant in Tarragona, Spain has been shut for maintenance work from February 7 until end of March. The heavy cracker turnaround season, due to start next month, has further curbed supply. Shell's 940,000 tpa Moerdijk cracker in the Netherlands will be offline from March 10 to end-April. BASF's 1.08 million mt/year cracker in Antwerp, Europe's largest, will also be down in April-June for maintenance. Interestingly, the supply issues have not triggered frantic spot buying. Interest has remained subdued despite the specter of increased March contract pricing on the back of curbed availability and higher feedstock cost. Products were available for those who needed them, but interest was thin, a trader said, adding: "I am not attacked by requests." The market has so far largely been preoccupied with swapping products and using up contractual volumes, sources said, adding that there is little need for spare supply amid rising worries over falling downstream demand and Europe's escalating economic woes. The production issues also gave some cracker operators the chance to ramp up output, which helped bridge the supply gap. Downstream, polyethylene and polypropylene demand has continued to soften, prompting further pricing flexibility from producers who have given up on their significant price hike targets for February. The strong upstream market is buoying expectations of firmer feedstock propylene pricing for March but this has failed to propel prebuying, sources said, adding that consumers are generally purchasing hand-to-mouth amid macroeconomic uncertainty.
  More News  Post Your Comment
{{comment.Name}} made a post.




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