03 November 2011 10:14 [Source: ICIS news]
LONDON (ICIS)--The European propylene contract price for November has been fully agreed at €1,013/tonne ($1,388/tonne) FD (free delivered) NWE (northwest Europe), down by €55/tonne from October, following some delay, a second net seller confirmed on Thursday.
“It is not what I expected at the beginning [of discussions], but it is acceptable. It is now time to have a deal,” said the second selling settler.
The net consumer involved in the first settlement has also followed with a second net producer. The initial settlement had previously been between two net consumers and the same net manufacturer.
Further sell support had been lacking as sellers had been dissatisfied with the drop of €55/tonne in the initial settlement, as they considered reductions of €40–45/tonne as a maximum because they had limited room to move in terms of cracker economics due to ongoing high crude and naphtha costs, despite some recent softening in naphtha values.
They also consider that a significant drop in price will not stimulate demand, because of the underlying concerns about working capital and the general economy.
However, buyers had pushed for reductions of at least €50/tonne, with some talking about three-digit reductions, citing the need to redress the lack of competitiveness with other regions, subdued market conditions in ?xml:namespace>
($1 = €0.73)
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