Europe June PO contract prices fall €100/tonne on costs

22 June 2012 23:59  [Source: ICIS news]

LONDON (ICIS)--European propylene oxide (PO) contracts for June have largely fallen by €100/tonne ($125/tonne) because of lower propylene costs, market players said on Friday.

To reflect this, European PO prices moved down in June to €1,518-1,628/tonne FD (free delivered) NWE (northwest Europe), according to ICIS. Numbers below the range were also heard, but they were not widely confirmed.

European formula related PO prices, which account for the majority of contracts in Europe, have decreased by €100/tonne, in line with 80% of the propylene feedstock reduction.

The June propylene contract settled at €1,105/tonne FD NWE, down by €125/tonne from the previous month.

For freely negotiated related PO business, similar to lower than formula-related price reductions were heard, although lower price drops are not seen to reflect the general market trend.

PO demand is holding up reasonably well, despite economic uncertainty.

One buyer said that its surfactant demand has been slightly subdued in the second quarter because of the fragile economic climate, although it has seen some slight uptick in view of the recent and current feedstock price relief.

PO demand into the food sector remains regular, largely unaffected by economic fluctuations.

One PO manufacturer said that its merchant demand remains healthy, supported by good performance in the downstream polyurethane sector, particularly in central Europe.

The PO market is generally well supplied, as good output is being weighed against reasonable demand.

($1 = €0.80)

By: Heidi Finch
+44 20 8652 3214

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