25 August 2011 05:49 [Source: ICIS news]
By Peh Soo Hwee and Lilian Hua
The European debt crisis and the prospect of a double-dip recession in the
Chinese producers use petrochemicals to produce a wide range of consumer items from toys to textiles, which are exported to Europe and the
The weakening demand from these key markets will have a significant impact on the supply chain, the sources added.
Offers and selling ideas for propylene cargoes arriving in September hovered at around $1,600/tonne (€1,104/tonne) CFR (cost & freight)
“The asking price is $1,600/tonne, but traders seem open to negotiations at below this level,” a Chinese acrylic acid producer said.
Buying ideas during the same period were around $30-50/tonne lower at $1,550-1,570/tonne CFR China, end-users and traders said.
The market sentiment in
According to a source from FPCC, the company will restart its No 1 residual fluid catalytic cracker (RFCC) and its olefins conversion unit (OCU) at the same site “very soon”, but has not confirmed the date for the restart.
The RFCC can produce around 325,000 tonnes/year of propylene, while the OCU has a propylene capacity of 250,000 tonnes/year.
Domestic propylene prices in the key
Low operating rates at propylene facilities and plant shutdowns in
The operating rates at atmospheric and vacuum distillation units in
“It is almost impossible that propylene prices can go up from this point, because of the volatile oil prices,” a producer in
“End-users, especially powdered polypropylene (PP) producers, have retreated to the sidelines as they are sensitive to the propylene prices. Many of them have chosen to shut down or lower their plant operating rates and this will affect the demand for propylene,” the producer added.
The derivative PP sector, which accounts for more than half of
The prices of powdered PP were heard at around CNY12,400-12,500/tonne ex-works in
Propylene spot prices were assessed at $1,550-1,600/tonne CFR China last week, above PP yarn prices at $1,520-1,560/tonne CFR China during the same period, according to data from ICIS.
PP makers typically need their product prices to be at least $150/tonne above those of propylene to break even, but they have been incurring losses for most of this year.
The supply of propylene tightened because of a heavy cracker turnaround in the first half of 2011 and unplanned shutdowns at propylene plants in
($1 = €0.69, $1 = CNY6.39)
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