25 March 2010 16:27 [Source: ICIS news]
LONDON (ICIS news)--An initial European propylene (C3) contract for April has settled at €980/tonne ($1,307/tonne), up by €70/tonne from March, because of tight market fundamentals and firm feedstock costs, a major producer said on Thursday.
The contract, done on a free delivered (FD) northwest Europe (NWE) basis, was between the producer and one of its customers, a major net consumer, and was fully confirmed.
It has since been followed by another major producer with the same consumer.
Market players had expected a fairly strong increase in the contract price this month, as supply and demand were very tight due to planned and unplanned production outages amid strong demand for derivative exports.
At the start of negotiations, sources had pinpointed a discussion range of plus €50-€100/tonne, but had latterly homed in on a range of plus €60-80/tonne.
It remained to be seen whether other consumers would accept the initial increase.
Traditionally, two different producers and two different consumers are required to confirm before the settlement is considered a representative benchmark market price.
($1 = €0.75)
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