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Propylene firms further in Europe, gives weak signals in Asia

  • 30/03/2016 (09:39)
Spot propylene prices have been steadily edging higher since early February in Europe while players see further gains in the days ahead in line with the start of the maintenance season. On the other hand, spot propylene prices have tracked a stable to soft trend recently in Asia in the midst of easing supplies.

In Europe, the settlement of April propylene contracts is imminent with all eyes on its outcome following the end of the Easter holiday. Players widely expect to see increases amid different speculations about the size of the increase. Tight supplies are blamed for the expected increases while there are also turnarounds planned across the region, which renders the outlook firm for another month in the spot market.

The upstream naphtha market also supported expectations about a firming trend in the propylene market as it has been gradually gaining ground since the beginning of the month in Europe.

Although spot naphtha prices have been rising in Asia as well, the outlook for propylene is cautious particularly for the second quarter. Propylene supplies are comfortable in the region, according to traders, and this caused spot prices to weaken somewhat in mid-March and then hold steady in the following weeks.

Players also expect more relief in supplies in line with the return of some propylene units as well as the start-up of new capacities. This casts a further shadow on the propylene outlook. These weak expectations prevail despite the fact that the downstream PP market retains its strength both in China and Southeast Asia.

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