NWE propylene producers walk away from spot market offers as low as €725/tonne FOB, shelve product, concentrate on contracts instead; suppliers expect further cutbacks in run rates beyond current rates of 70%-80%
October 24, 2011
– Propylene supply in Northwest Europe tightened as producers pulled away from the spot market, retreating from low offers, Platts reported Oct. 24, citing industry sources.
Spot prices for polymer-grade propylene plummeted to €795-800/tonne free delivered northwest Europe Oct. 21, its lowest price since January 2010. Buyers reported having offers for November product rejected over the last few days as producers balked at offers of €725 per tonne (US$1,005/tonne) free on board. The low offers and weak demand are moving producers to shelve their product for the interim and concentrate on contracts in lieu of spot deals, sources told Platts. With few buyers in Europe, no deals were reported in the week ending on Oct. 21.
Some producers speculated that run rates would be scaled back even more. At present, cracker run rates have been cut to 70%-80%.
Production in Western Europe in the third quarter rose to 3.737 million tonnes from 3.699 million tonnes in the previous quarter, according to data from the Association of Petrochemical Producers in Europe. The quarter figures were down from 3.843 million tonne in third quarter 2010.
The primary source of this article is Platts, New York, on Oct. 24, 2011.