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Supply issues drive spot propylene prices higher across the globe

  • 09/08/2016 (03:31)
Spot propylene prices registered some increases across the globe by the end of this past week. Supply constraints stemming from several outages were cited as the main driver behind the global firming trend as the propylene market is seen lacking support from the energy complex. Spot naphtha prices aren’t suggesting any notable changes week over week.

Spot propylene prices in Europe registered an increase of almost €50/ton at the end of last week. Higher spot values were attributed to reduced availability in the region. This situation pulled spot prices well above the contract price. Several shutdowns are likely to add to the prevailing tightness.

BP Refining and Petrochemicals is expected to shut one of its two crackers in Gelsenkirchen, Germany for turnaround in mid-August. LyondellBasell will also conduct a planned maintenance shutdown at one of its crackers in Wesseling, Germany in September. The company has two crackers at the site with capacities of 305,000 tons/year and 735,000 tons/year, respectively. It’s unclear which cracker will be taken offline for turnaround.

In Asia, spot propylene prices inched up slightly as of the end of last week. Tightening availability was cited as the main reason behind the minor gain in propylene costs. Currently, Taekwang Industrial, JX Nippon Oil & Energy, Formosa Petrochemical and Sinopec Sabic Tianjin Petrochemical are among producers conducting planned maintenance shutdowns at their crackers across Asia. On top of these scheduled turnarounds, Japan’s Asahi Kasei Mitsubishi Chemical experienced an unplanned outage at its Mizushima cracker in late July. The cracker, which has a propylene capacity of 320,000 tons/year, is expected to resume operations on August 15.

Spot propylene prices in the US gained ground for a fourth consecutive week, rising by 1.5 cents/lb ($33/ton) on August 5 to reach the highest level in over a year on average, according to ChemOrbis Price Wizard. The gradual firming trend was attributed to production problems in the country.

Dow Chemical’s 750,000 tons/year PDH unit in FreePort, Texas has been offline since mid-July while it’s expected to resume operations sometime this week. Market sources reported that ExxonMobil experienced an unplanned outage at their steam cracker in Baton Rouge, Louisiana last week. The cracker is expected to remain offline until mid-August.
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