09 May 2008 15:21 [Source: ICIS news]
LONDON (ICIS news)--European exports of propylene (C3) in May were helping to relieve some of the pressure of a long market but with the derivative outlook still poor, there was still a long way to go, trader sources said on Friday.?xml:namespace>
One European trader said about 22,000 tonnes of propylene was so far booked to move out of Europe and the Mediterranean in May destined for Asia and Brazil.
Spot price levels for these cargoes were not being disclosed in order to disguise poor netbacks for the European sellers, sources said, adding the main aim was to move surplus volume outside ?xml:namespace>
Market observers however speculated that such numbers were potentially in the mid-€700s/tonne ($1,155/tonne) FOB (free on board) northwest Europe (NWE), or lower in some cases ex-Mediterranean.
This compares with spot levels up until recently being talked in the low to mid-€800s/tonne CIF (cost, insurance, freight) NWE.
The last openly reported deal was for a 1,000 tonne lot at €820/tonne CIF NWE for May delivery done this week but traders said spot levels were easily closer to €780/tonne CIF NWE if not below given the potential FOB values.
Some sellers said they were having difficulty selling propylene within
“There is no space available,” one propylene producer said.
Supplies of propylene have been lengthy for most of the year, crippled by weak demand due to poor performance of its main derivative polypropylene (PP).
While cracker reliability had been good amid fewer scheduled turnarounds, the same could not be said for PP production which had been impacted by a number of planned and unplanned shutdowns over recent weeks. There were also reports PP production had experienced “drastic cutbacks”.
Cracker operators had been able to tweak propylene production levels by adjusted feedstock slate and operating severity but the lengthy situation was expected to persist unless PP picked up.
($1 = €0.65)
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