Imports continue to be driven by propylene shortage in Europe

05-Feb-13

An unexpected outage was seen at Naptachimie’s cracker in Lavera, France. This has led to an unexpected shortage of propylene in Europe. As per ICIS, A 3,000 ton polymer grade propylene cargo has been fixed to Europe from the US. The cargo, which is due to load mid-February on the Gaschem Juemme, will discharge at Lavera in March, and follows last week’s Taiwanese cargo that has also been fixed to discharge in Europe that month. No prices for either cargo were disclosed. However, price indications hovered around €1,200/ton (US$1622/ton) CIF for the Asian cargo – and were even higher for the US cargo. That some effort had been made to cover the shortfalls caused by the unplanned outage – at a time when Europe is heading into a heavy turnaround season – was not unexpected, sources said. The potential cost of these volumes was more of a surprise, however, and somewhat unbelievable according to a few sources, which were calculating landed prices well in excess of current spot numbers. The lack of affordability for derivatives – especially polypropylene (PP) – and not least the forward timing has led to some incredulity among players. Spot polymer grade propylene prices are generally viewed as being at or close to the contract value. The February contract price settled up by €10/tonne at €1,100/ton FD (free delivered) NWE (northwest Europe).