Firming in ethylene lags behind propylene in Europe
According to data from ChemOrbis Price Wizard, the weekly average of spot propylene prices on FD NWE basis has registered a cumulative increase of €140/ton since early March to recently hit a 14-month high. In the meantime, spot ethylene prices had tracked a mostly stable to softer trend over the same period before they slightly rebounded last week despite ample supplies.
As a result of its faster gains, spot propylene prices in Europe climbed above the ethylene market around two weeks ago for the first time since March 2015. Price Wizard data reveal that spot propylene prices currently carry a premium of €50-55/ton over ethylene.
Players operating in Europe’s monomer markets are nowadays voicing their expectations for June contract settlements. For propylene, expectations mostly call for increases of €30-40/ton while players anticipate smaller gains of around €10-15/ton in the next ethylene contracts.
A few traders opined, “Bullish energy costs have triggered a slight recovery in the ethylene market while spot prices are not likely to demonstrate any major increases since supplies remain ample across global markets. On the other hand, spot propylene has been following a stronger path in the last couple of months due to limited availability as well as firm naphtha and crude oil prices.”
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