NPRA '08: Europe C2 imports hurt by storage issue

31 March 2008 22:43  [Source: ICIS news]

SAN ANTONIO, Texas (ICIS news)--Terminal and storage constraints in Europe are limiting ethylene imports (C2), a trader said on the sidelines of the 33rd National Petrochemical and Refining Association (NPRA) meeting.

"We want to move more product into Europe but buy interest is limited, primarily because of logistical issues" he said.

European ethylene spot prices have remained high and have proved attractive to traders as an alternative destination to Asia.

Import volumes rose in the first quarter amid very competitive prices, creating a two tier spot market with pipeline prices at around €1,010/tonne ($1,600/tonne) free delivered (FD) northwest Europe (NWE) compared to with deep-sea deals at $1,320-1,370/tonne CIF (cost, insurance, freight) NWE.

"We are offering at $1,300/tonne for April but its difficult to move" the trader said.

The trader said that it saw April loading, delivery May volumes being offered at higher levels as the C2 contract for the second quarter had moved up €15/tonne to €1,038/tonne FD NE.

Even some proposals at around $1,400/tonne CIF were still very attractive for European buyers, it added.

There was some interest in the cheaper volumes but buyers were unable to take advantage usually because of a lack of terminal or storage space. 

Sources said that inflexible supply contracts also restricted spot trade as they left consumers with little room to manoeuvre because they were obliged to fulfill contract nominations.

Availability out of the Middle East - Saudi Arabia and Iran - is expected to increase throughout the second half of 2008 and into 2009 because of new onstream capacities, but the extent to which these volumes could find a home in Europe was uncertain.

($1 = €0.63)

By: Nel Weddle
+44 20 8652 3214

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