European December contract for propylene settles down €18/tonne to €995/tonne FD NWE Nov. 30 on soft demand; decline represents first time in past year price dipped below four digits
November 30, 2011
– The December contract for propylene in Europe declined €18 per tonne (US$24/tonne) to setlle at €995/tonne free delivered Northwest Europe on Nov. 30, ICIS news reported the same day.
ICIS noted that it was the first time in a year that the European contract price dropped below four digits.
Buyers told ICIS that a price decrease was needed in order match softness in the derivatives market. Another buyer told ICIS that the price reduction was necessary to stimulate any buying interest at all since December is already a typically slow month because of holidays.This year that slowness is likely to be compounded by economic concerns.
Some buyers were seeking larger price reductions in the neighborhood of €40-€80/tonne to try to regain competitiveness with other regions, ICIS reported. But higher feedstock costs and thin cracker margins made bigger reductions unattainable. The €18/tonne reduction was viewed as splitting the difference.
Producers were hoping to keep prices flat from November especially since they are seeing thinner cracker margins. ICIS reported that average naphtha-derived ethylene cracker margins are at €399/tonne, 13% less than in October.
The primary source of this article is ICIS news, Sutton, England, Nov. 30, 2011.