Spot propylene declines for first time in 3 weeks in Europe

19-Feb-14

In Europe, spot propylene prices posted the first decrease of this month after tracking a stable trend over the past three weeks, as per ChemOrbis. Spot propylene prices on an FD NWE basis declined by €20-25/ton on the week, according to a trader. The drop in spot prices was attributed to improving supply levels. In the upstream markets, although crude oil futures on the NYMEX remained above the US$100/barrel threshold on February 14, spot naphtha prices are not suggesting major changes from last week and they continue to stand at the lowest levels recorded since early February. Looking at the downstream markets, LyondellBasell declared force majeure on PP supplies from its Carrington, UK facility on February 12. The Carrington plant has a capacity to produce 210,000 tpa of PP. In Italy’s PP market, prices continue to suggest mainly rollovers while some sellers conceded to discounts when concluding deals for small volumes due to sluggish demand as well as lower upstream costs. A distributor commented, “We conceded to discounts of €20/ton compared to our initial February PP prices. However, we still faced difficulty in concluding deals as some resellers are offering European cargoes at even lower levels. In addition, demand is not supportive.” A converter bought West and Central European PP with decreases of €10/ton from January. The buyer added that he also received import offers for Far East Asian cargoes, but didn’t accept them as they lacked competitiveness against local cargoes. Another converter reported buying small volumes of PP with discounts of €10/ton as he still has some stocks. According to ChemOrbis, in Germany, PP prices are holding mostly steady over the past week. A distributor reported concluding some PP deals with rollovers from January. He added, “Our supply is comfortable and we expect to see better demand in March.” A converter commented, “We received offers for February gentlemen’s agreements with rollovers from our suppliers. However, we are planning to search the import market for Middle Eastern cargoes to see if we can manage to find lower prices.”