01 February 2013 12:43 [Source: ICIS news]
LONDON (ICIS)--A 3,000 tonne polymer grade propylene cargo has been fixed to Europe from the US as a result of the unexpected outage at Naptachimie’s cracker in Lavera, France, market sources said on Friday.
The cargo, which is due to load mid-February on the Gaschem Juemme, will discharge at Lavera in March, and follows last week’s news that a Taiwanese cargo has also been fixed to discharge in Europe that month.
That some effort had been made to cover the shortfalls caused by the unplanned outage – at a time when Europe is heading into a heavy turnaround season – was not unexpected, sources said.
The potential cost of these volumes was more of a surprise, however, and somewhat unbelievable according to a few sources, which were calculating landed prices well in excess of current spot numbers.
The lack of affordability for derivatives – especially polypropylene (PP) – and not least the forward timing has led to some incredulity among players.
No prices for either cargo were disclosed. However, price indications hovered around €1,200/tonne ($1,622/tonne) CIF (cost, insurance & freight) for the Asian cargo – and were even higher for the US cargo.
“Amazing isn't it? [It] must be above €1,300/tonne CIF Lavera” a player said.
Another player said: “[It’s] gold-plated propylene.”
However, several players said the US deal was unlikely to be a straight “spot plus freight” trade, given that the buyer in question has a global system and therefore global possibilities.
Spot polymer grade propylene prices are generally viewed as being at or close to the contract value. The February contract price settled up by €10/tonne at €1,100/tonne FD (free delivered) NWE (northwest Europe).
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