29 March 2010 01:02 [Source: ICIS news]
SAN ANTONIO, Texas (ICIS news)--European propylene (C3) spot prices need to rise further if the gaps in supply are to be filled, market sources said on Sunday on the sidelines of the International Petrochemical Conference in San Antonio, Texas.
Traders said that the market would only begin to see some relief and the return to some semblance of a balance when spot prices rise to levels that would open the arbitrage and attract deep-sea volumes away from the ?xml:namespace>
"Prices need to move above €1,100/tonne ($1,466/tonne) CIF (cost insurance freight) NWE (northwest Europe), given that
Spot prices were currently being pegged in the low to mid €1,000s/tonne according to global market intelligence service ICIS pricing.
"It will get there" another trader said, adding that the potential to work southeast Asian volumes into
The first trader predicted that the arbitrage would be workable by May.
However, consumers said that they were not in a position to pay such prices. While derivative demand had indeed been better than expected, they were under constant pressure to recover the contract price increases that had been imposed all year and still remain competitive on the global market.
Producers hit by unplanned production hiccups were the only obvious buyers, sources said.
Propylene supply in Europe had been extremely tight in
Derivative demand was strong supported primarily by the export market, particularly to
The tight supply and demand situation was highlighted by the recent €70/tonne increase in the April contract settlement, which at €980/tonne FD (free delivered) NWE, was, for the first time, higher than ethylene.
Ethylene settled at €960/tonne, a rise of €20/tonne.
Hosted by the National Petrochemical & Refiners Association (NPRA), the IPC continues through Tuesday.($1 = €0.75)
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