08 February 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European propylene oxide (PO) contract prices have firmed by €8/tonne in February, driven by higher upstream propylene costs, said market players on Friday.
For formula related PO business, which remains the majority, contract prices moved up by €8/tonne, in line with 80% of the propylene feedstock.
For freely negotiated PO business, there was a similar price move to that seen for formula related accounts in February, as higher feedstock costs were weighed against fairly balanced market conditions.
To reflect the €8/tonne increase, PO contract prices in February have been edged up to €1,514-1,630/tonne ($2,029-2,184/tonne) FD (free delivered) NWE (northwest Europe), according to ICIS.
PO demand in Europe into the main construction and unsaturated polyester resin sectors remains subdued for seasonal and economic reasons. There has been a boost in winter season demand from the downstream de-icer sector over the last few weeks because of freezing conditions across Europe, but this is seen to be manageable as downstream stocks had already been built in advance.
There is, however, more potential for export opportunities for propylene-related derivatives such as PO because of the firming trend, particularly in the US, which has meant that European derivatives have become more competitive when compared with recent months.
The European PO market is largely balanced, as low seasonality in some downstream sectors is being mitigated by adjustment in run rates in some cases.
($1 = €0.75)
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