17 April 2008 16:39 [Source: ICIS news]
LONDON (ICIS news)--A lengthening propylene (C3) market in Europe could lead to a significant spot price downturn or alternatively a cutback in cracker operating rates, market sources said on Thursday.?xml:namespace>
Supply was generally considered to be well-balanced to long.
Sources said that they had so far been able to mitigate any short-term length through swap movements.
“[People] are running at the higher end of balances,” said one integrated polyolefins producer, adding short-term swap offers were increasingly common which signified that fundamentally, the market was lengthening.
Some sources said that as the overall stock position appeared to be building, there could come a point when prices and/or operating rates would have to be cut.
An additional sign that the market was tending to be long was the fact spot offers in the very low €800s/tonne ($1,270s/tonne) CIF (cost, insurance and freight) NWE (northwest ?xml:namespace>
Spot prices up until now had remained steady at around €860-875/tonne CIF NWE.
One trader source said that there was no buying interest at any price.
Players said while there were concerns regarding May stock levels, most were waiting as long as possible before making any major decisions, particularly in terms of cracker cutbacks.
“My opinion is that still a lot of things can happen… if any unexpected outages [occur], the situation can turn around very quickly,” said the integrated polyolefins producer.
($1 = €0.63)
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