27 February 2012 17:21 [Source: ICIS news]
Correction: In the ICIS story headlined "Europe March propylene fully confirmed up by €90/t at €1,190/tonne" dated 27 February 2012, please read the headline as "...up by €90/t at €1,195/tonne" instead of "...up by €90/t at €1,190/tonne".
LONDON (ICIS)--The European March propylene contract price has been fully confirmed up by €90/tonne ($122/tonne) at €1,195/tonne, three consumers and two sellers said on Monday.
The initial settlement was reached between one main producer and two consumers, including one pure consumer and one integrated consumer.
The settlement was also followed by the same integrated consumer and a second seller. A third consumer also agreed the same number with the second seller.
The manufacturer involved in the first settlement said the increase had been necessary for the sake of cracker margins, which had been eroded during the month by “the painful rise in upstream naphtha costs,” despite the increase in the February propylene settlement.
In addition to this, the same source said that the propylene market had tightened due to a spate of production problems and spot prices (for polymer grade propylene) had already trended above the contract price level in February.
Two buyers said that the plus-€90/tonne was a “fair compromise” from the three digit increase being targeted by the sellers. One of the buyers said that the tighter supply situation was also a contributory factor for the price increase.
However, one of the consumers said it was more concerned by demand rather than supply, because although improved it remains fragile amid the uncertain economic climate.
The agreement was settled on a free delivered (FD) northwest Europe (NWE) basis.
(|$1 = €0.74)
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