Asia propylene slips on short selling - sources

11 September 2008 08:59  [Source: ICIS news]

SINGAPORE (ICIS news)--Spot propylene prices continued to fall at an unprecedented rate, hitting $1,300/tonne CFR (cost and freight) China on Thursday, a drop of $50/tonne, or 3.8%, in a day, market sources said.

With the prospect of many cargoes chasing few buyers, Japanese and Korean traders resorted to short selling and dropping offers rapidly as the pool of potential buyers in China - the region’s largest importer - grew increasingly smaller each day, they added.

Unexpected cutbacks in derivative products such as phenol, acrylonitrile and polypropylene (PP) have resulted in a deluge of spot propylene cargoes from Japan and South Korea for September and October loading dates, which have not been able to find viable buying outlets.

“We think $1,250/tonne is easily achievable,” said a Chinese trader, but opted to wait for prices to fall to $1,200/tonne CFR before making any counter-bids.

Traders estimate as many as seven-to-eight cargoes on offer currently from northeast Asia, some of which have been shown to buyers in down in southeast Asia at $1,420/tonne CFR Indonesia.

The overall markets have been soft with upstream feedstocks, such as naphtha and crude oil, also leading the downtrend due to weak sentiment.

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By: Steve Tan
+65 6780 4359

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