07 January 2011 23:59 [Source: ICIS news]
LONDON (ICIS)--Freely negotiated propylene oxide (PO) contract prices in Europe have increased by €88/tonne ($114/tonne) in January, in line with formula-related contract levels, which pass through at 80% of upstream propylene price movements, sources confirmed on Friday.
ICIS assessed January PO prices at €1,518-1,608/tonne FD (free delivered) NWE (northwest Europe).
After the January propylene price increased by €110/tonne, producers said they decided against adding a premium on freely negotiated customers, as it was already a hefty rise and they did not want to harm demand, which was running well.
“Our customers have suffered enough already,” remarked one producer.
Buying interest from the downstream monopropylene glycol (MPG) sector was said to be driving the PO market, as the harsh winter conditions across Europe had caused demand for de-icer to spike. This led many to expect tightness in the market in the next few weeks.
However, for the time being, there did not seem to be any major availability issues. Downstream, a producer of starch said that its PO demand was stable, and that while more product was going towards MPG, its suppliers had promised it would receive all contracted volumes on time.
($1 = €0.77)
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