18 June 2012 00:00 [Source: ICB]
A 16% drop has been seen for US ethylene contracts, with values for May agreed at 46.25 cents/lb ($1,020/tonne). The 9 cents/lb decline was blamed on falling spot numbers and a reduction in production costs during the month.
The US June propylene settlement slumped by 23% month on month to reach a 30-month low. Polymer Grade Propylene (PGP) fell by 15.50 cents/lb to 52 cents/lb, its lowest price since the 49.50 cents/lb reported in November 2009. Contracts were expected to fall as spot prices had retreated.
Most May US styrene contracts have rolled over at 70.00-74.00 cents/lb. Some players reported increases of 1.00-1.50 cents/lb, while others settled down by a similar amount. Benzene feedstock prices had moved down to $3.80-3.84/gal levels in May, putting downward pressure on the styrene market - although benzene has since rebounded. Spot ethylene, meanwhile, fell and added pressure to the styrene market.
Buyers say a higher third-quarter methanol contract in Europe is not guaranteed given decreases in global spot prices. The European spot market had fallen by €15-21/tonne by June 8 from the week before. Prices in China had eased by $13-18/tonne week on week, while US prices were down 3 cents/gal. "Every week until today I have said we will see an increase. Today, I have said we will see either an increase or a rollover," a buyer said at the time. Another said a drop was now possible.
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