Spot propylene moves in opposite directions in Asia and Europe
Asian markets show signs of recovery
Spot propylene prices on CFR China basis embarked on a slate of increases by the middle of May this year and have recently rose to their highest since February. Prices on FOB South Korea basis also perked up following a period of volatility in late June.
What drove prices up?
Tighter supply stemming from the planned and unplanned shutdowns in May and June helped buying interest return to the market. As can be seen in ChemOrbis Production News, propylene plants in the Asia-Pacific region have a busy schedule of maintenance this month, with capacities over a million tons of propylene per year slated to be offline until the end of the third quarter.
Among the producers that will start a turnaround is the Taiwanese major, Formosa Petrochemical. The company will shut its steam cracker with 515,000 tons/year of propylene capacity by next month, possibly tightening the market if the current firm demand continues.
European markets paint a different picture
Unlike the markets in Asia, the European spot propylene market has been under the pressure of the weak demand and comfortable supplies since early June. The weekly average data obtained from ChemOrbis Price Wizard show that prices on FD NWE basis recently fell to their lowest levels since December 2018.
Declining spot prices already reflected on July contracts
The downturn in the spot market has already found a reflection on July propylene contracts as they settled with a €80/ton ($91/ton) decrease in Europe in late June.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- PE rally loses momentum on subsiding demand in Türkiye
- PVC prices flat for 2nd straight month in Italy and West Europe
- Freight rates snap rally, Red Sea crisis keeps decreases in check
- Worsening dollar shortage pushes Egypt’s local PP, PE prices to never-before-seen highs
- Stats: US PE exports hit a renewed record in 2023, sales to China boom
- Türkiye’s PP market continues to grapple with tight supply, prices at multi-month highs
- Margin expansion targets push Italy’s PE film markets to multi-month highs
- LDPE prices rise faster than other PP, PE products in India’s bullish market
- Headwinds await China’s PP, PE markets post-holiday period
- Türkiye’s 2023 imports set a new record at 6.3 million tons; PE, PVC and ABS shine out