Tightness drives global propylene prices up
Sept. 30, 2018
Spot propylene prices in Asia have been witnessing increases on the back of supply issues stemming from several outages across the region. They have recently reached their highest levels in approximately 4 years. Meanwhile, spot propylene prices in Europe and the US have also extended their gains due to similar reasons.
Data from ChemOrbis Price Wizard show that the weekly average of spot propylene prices in Asia has hit its highest level seen since November 2014 following a rising trend that kicked off in July.
The tight availability propelled the price gains, with market players attributing the lack of material to the scheduled turnarounds at three major Korean propylene producers’ plants in the region.
Lotte Chemical, YNCC and LG Chem are planning to shut their crackers throughout September and October.
The spot propylene market was also firmer in Europe, with prices extending a streak of weekly gains into the second week. Supply constraints stemming from the persisting logistics issues in the region were cited as the main driver behind the prevailing trend.
In addition to the transportation issues, planned and unplanned production outages in Europe have also played a role in spot price increases.
LyondellBasell’s Munchsmunster cracker in Germany faced disruption due to a refinery outage on September 1. The company’s two other crackers in Wesseling, Germany as well as Naphthachimie’s unit in Lavera, France will be offline throughout September and October. MOL’s cracker in Hungary is also due for shutdown later this month.
The US spot propylene prices, meanwhile, gained further ground after the US Energy Information Administration (EIA) revealed that the US propylene inventories were down slightly on a weekly basis.
The weekly decrease in inventories came alongside a shutdown at the US producer Enterprise’s PDH unit in Mont Belvieu, Texas. The force majeure Phillips 66 declared on PP supplies from its Bayway unit in Linden, New Jersey also remains in place.