Europe PGE July prices, demand stable after propylene rollover

01 July 2013 15:36  [Source: ICIS news]

LONDON (ICIS)--Expectations in the European propylene glycol ethers (PGE) market are for stable price and demand levels for most of July following the feedstock propylene July contract price rollover.

Spot prices for methoxy propanol (PM) were €1,220-1,260/tonne ($1,584-1,636/tonne) FD (free delivered) NWE (northwest Europe) and methoxy propanol acetate (PMA) spot prices were €1,420-1,460/tonne FD NWE at the end of June, according to ICIS.

Like the glycol ethers market, the majority of buyers and sellers in the PGE market think July will see largely unchanged prices and fairly consistent demand for most of the month.

“[We are] maybe a bit conservative, but [we] think this is where prices are going to stay. Can't see any downward pressure, even when talking to customers on both PM and PMA,” a PGE producer said.

A second producer added that, after seeing prices soften a little in June from its point of view, it cannot see any further downward pressure on July prices.

“I do foresee a smooth transition from June to July,” a distributor said, echoing producers’ sentiment.

In terms of demand, improved weather conditions have helped the paints and coatings sector, which together with some re-stocking, has helped the second quarter see improvements on demand compared to the first quarter.

“[Quarter two and three demand] should be stronger from coatings. Getting strong months back to back is nice. Expectation is a good month in July, but starting to hit the holiday season,” a producer said.

On the buy side, views seemed quite optimistic about demand levels for July.

“Generally, the markets are quite busy and seem to be ramping up. July is looking quite good,” one buyer said.

A second buyer said that there seemed to be good demand coming from both the German and export car markets, helping keep PGE demand up.

“Germany is doing quite well. Everybody here is in a high consumer mood because of bad saving rates,” the buyer said, adding that China and Brazil are the growth markets for German car exporters.

However, the onset of the traditional quiet season during July and August could see demand levels drop towards the end of the month some market participants warned.

($ = €0.77)

By: Matt Tudball
+44 208 652 3214

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