07 October 2012 14:21 [Source: ICIS news]
BUDAPEST (ICIS)--The European propylene oxide (PO) market is expected to be relatively balanced until 2014 when new capacity is due to come on stream in Asia, assuming that there is no economic slowdown or surge in the meantime, a main PO consumer said on Sunday.
At least, 600,000 tonnes of new PO capacity is expected to be brought online in China by the end of 2013 by companies Jilin Shenhua Group and Jishen Chemical, among others, according to the ICIS plants & projects database.
The same source said on the sidelines of the 46th European Petrochemical Association (EPCA) meeting that it is confident about PO availability in Europe at the end of 2012 and into 2013, illustrated by the fact that it intends to increase the proportion of its freely negotiated PO business from 10% to 20% for 2013.
The European PO market has been described as balanced-to-snug over the last month, depending on source. This has been attributed to some production constraints as well as relatively healthy demand from the main downstream polyurethane (PU) sector.
European PO contracts are likely to soften slightly in October based on the €20/tonne reduction in the European propylene contract price for October, which was agreed at €1,140/tonne FD (free delivered) NWE (northwest Europe).
In September, PO contracts were assessed up by €84-90/tonne, taking values to €1,572-1,678/tonne ($2,042-2,179/tonnne) FD NWE, following the rise in propylene costs at the time.
The annual EPCA meeting runs from 6-10 October.
($1 = 0.77)
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