Spot ethylene, propylene prices climb in Europe

Ahead of August monomer contracts in Europe, spot ethylene and propylene prices climbed further over the past week, boosted by the rallying energy complex and naphtha costs, as per ChemOrbis. Apart from the strong upstream chain, cracker operators continued to keep their production rates comparatively lower due to weak margins, which turned negative amidst firmer feedstock costs. Over the past week, crude oil contracts soared by over US$5/barrel both on the Mymex for August deliveries and for Brent crude oil prices for September deliveries. Steadily rising energy costs pushed the spot naphtha market up by US$45/ton (€37/ton) on CIF NWE basis in a week, bringing the total increase to US$100/ton (€82/ton) since the beginning of July. According to some industry sources, naphtha costs may remain on a strong note in August as well, as the flow of import cargoes from other regions is expected to lose pace since the arbitrage window to Europe is fading away. Spot propylene offers recorded a €65/ton increase on FD NWE basis week over week on sellers’ firmer pricing attitudes prior to August contract settlements, as per ChemOrbis. The most recent values indicated a €80/ton gain with respect to early July. Similarly, spot ethylene prices increased €30/ton on FD NWE basis week over week. Following the recent gain, the cumulative increase since the month started reached a massive €215/ton. Steadily rising spot markets are expected to push August contracts up after consecutive drops over the last couple of months. On the supply side, in addition to the ongoing shutdowns at some regional crackers, Borealis is planning to shut its petrochemical complex located at Porvoo starting from late August. The maintenance shutdown is expected to last for one and a half months, market sources reported. In addition to downstream units, the complex includes a cracker which produces 390,000 tpa of ethylene and 240,000 tpa of propylene. Additionally, Repsol has not announced a restart date after shutting its Puertollano cracker in Spain following a fire last month. Nevertheless, the company is expected to restart its 410,000 tpa cracker in Sines, Portugal soon. The company had shut the cracker at the end of May and planned to resume production at the beginning of June before facing some delays given technical issues. The cracker has a capacity of 250,000 tpa. Meanwhile, Dow is still in the restart phase at its 675,000 tpa Tarragona cracker in Spain, market sources in the region reported.