21 December 2011 15:01 [Source: ICIS news]
LONDON (ICIS)--A second pure consumer has confirmed it has followed the initial propylene contract price for January, which was agreed up by €20/tonne at €1,015/tonne ($1,336/tonne) between one net producer and another pure consumer on Wednesday.
The contract was agreed on a free delivered (FD) northwest Europe (NWE) basis.
The producer said that firmer upstream naphtha costs and unfavourable exchange rate conditions necessitated an upward price move, in view of low cracker margins, although this was weighed against some residual length in the propylene market.
The producer added: “This [the settlement] indicates the direction we need to move in, but it is a difficult period for the entire industry. We need to ensure green shoots of recovery.”
One buyer said that naphtha is creeping up and that the initial settling seller is much further in the process than other sellers, which are looking for larger price increases, and that plus €20/tonne is a good compromise.
The European December propylene contract price settled at €995/tonne FD NWE.
($1 = €0.76)
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