28 March 2013 11:06 [Source: ICIS news]
LONDON (ICIS)--The European propylene contract price for April was fully confirmed at €1,105/tonne ($1,417/tonne) FD (free delivered) NWE (northwest Europe) on Thursday, down by €50/tonne, after it received support from a second seller.
The initial settlement was made between one main producer and confirmed by three separate buyers.
The second settlement was agreed by another main seller after some initial general reluctance from suppliers which considered the propylene reduction too much, as the market was seen to be “better supported” than for ethylene. Sellers had also taken feedstock volatility and exchange rate fluctuation under consideration in their decision.
Two customers involved in the first settlement had also agreed with the second main producer, along with a third separate consumer, although confirmation from the third customer was still pending at the time of writing.
The second settling seller said; “it doesn’t like it [the settlement] very much- but felt the need to close the process.”
It added; “the ratio between ethylene and propylene is not right.”
The seller said it felt a fall of €40/tonne for propylene would have been more accurate on the basis ethylene is fundamentally softer than for propylene. It added the ratio between ethylene and propylene is historically low and now needs to wait till the May settlements in an attempt to address this.
One of the buyers involved in the settlements said it had agreed to the decrease of €50/tonne, but had wanted to get back the full €55/tonne that it lost in March.
Another of the settling customers said; “it [the decrease] could have been a bit more, but there was a lot of push back from sellers. So was happy with the minus €50/tonne in the end.”
($1 = €0.78)
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