28 September 2012 18:35 [Source: ICIS news]
LONDON (ICIS)--The European propylene contract price for October is fully confirmed at €1,140/tonne ($1,481/tonne), down by €20/tonne from September, reflecting a slightly lower feedstock situation and balanced-to-long supply-demand fundamentals, market sources said on Friday.
The initial settlement was between a major producer and two of its customers, both key integrated consumers. A second major producer followed with one of the key integrated consumers and two non-integrated consumers. All directly confirmed, although the second major producer said it had “capitulated for market discipline”.
As on the ethylene market, the discussion range had been smaller than seen in the past few months with producers generally targetting a rollover based on concerns over a continued upswing on feedstock leading to crunched margins, while consumers aim for a decrease of €20-30/tonne.
Sources had expected a fairly late settlement given the recent volatility in the upstream market, so the contract parties would have the best possible view of potential developments going forward.
Sources said earlier this week that the continuous fluctuations on crude and naphtha and the ongoing worries over demand levels had meant that the October contract price outcome would be difficult to predict. Stability, or at least near to it, was therefore seen by many as a viable option.
Crude oil and naphtha began to strengthen from Thursday on the back of Middle East tensions.
The contract price is agreed on a free delivered (FD) northwest Europe (NWE) basis.
($1 = €0.77)
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