Asia propylene dips over $120/t to 4-month low

10 September 2008 04:55  [Source: ICIS news]

HONG KONG (ICIS news)--Asian spot propylene prices fell over $120/tonne this week to hit a four-month low of $1,350/tonne CFR (cost and freight) China on downstream production problems and poor downstream demand, market sources said on Wednesday.

A 1,500-tonne cargo from Korea has been the lowest priced cargo heard sold this week after a similar parcel was sold late last Friday at $1,400/tonne by a Japanese trader.

The rapid decline in prices was caused by a combination of weak downstream demand from China from most derivatives, namely polypropylene (PP), which led to cutbacks in production.

The propylene market also took its cue from the upstream crude prices, which were perceived to be on a downtrend to cross the $100/bbl level, sources added. 

China, which is the region's largest importer of propylene, is bracing itself for a further drop in spot prices.

"We are placing our bids at $1,300/tonne CFR now," said a Shanghai-based olefins importer.

The spot level represents a fall of $170/tonne, or around 11%, from the previous weeks' low assessed prices by global chemical information service ICIS pricing.

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By: Steve Tan
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