13 June 2013 17:02 [Source: ICIS news]
LONDON (ICIS)--European monopropylene glycol industrial grade (MPGI) prices are stable to softer this week because demand from the unsaturated polyester resin (UPR) sector has been weaker than expected due to a sluggish global economy, market sources said on Thursday.
The automotive and construction industries, which traditionally pulls in MPGI in the summer months, have struggled due to lower-than-expected economic growth.
The price range for MPGI has been declining steadily after peaking at €1,240-1,270/tonne in March and had fallen to €1,140-1,180/tonne on Friday 7 June, according to ICIS data.
“June has started off worse than May,” an industry source said. “The price of propylene [feedstock] increased for this month and our margins were already tight. The buyers from the construction and automotive sector are simply not there [this year]. We are seeing prices softer in the low €1,100’s/tonne.”
The European propylene contract price for June has settled at €1,040/tonne FD (free delivered) NWE (northwest Europe), up by €15/tonne from May.
A second industry source operating in northwest Europe said although demand is subdued, prices remain stable and believes the market will pick up closer to autumn.
“It depends on the region,” the second source said. “Spain, for example, has low UPR demand at the moment but construction is on the rise in other [central European] countries. Prices are [therefore] stable between €1,150-1,180/tonne, but demand is not as high as we expected and there is high availability.”
Demand is projected to improve in August or September when the aircraft de-icing industry will start stocking up for the winter. “They will start buying early especially if prices are low,” the source added.
The price range for MPGI has softened year on year, down from €1,220-1,280/tonne settled in June 2012, according to ICIS data.
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