29 November 2013 10:37 [Source: ICIS news]
LONDON (ICIS)--An initial European propylene contract price for December settled at €1,110/tonne ($1,500/tonne), up by €30/tonne from November, an integrated buyer and main producer confirmed on Friday.
The contract is agreed on a free delivered (FD) northwest Europe (NWE) basis.
The increase of €30/tonne was seen to be a “compromise” for both parties, as the firmer upstream naphtha sentiment was weighed against lower derivative demand in December.
The settling buyer said it was "not happy or excited about the settlement, but it limits the suffering on both sides.”
It was also aware of the need to adhere to the monthly discipline and settle before the end of the working month.
The settling producer echoed a similar view stating that “both crying, sellers are saying it’s not enough [of an increase] and buyers saying it’s too much”.
The December ethylene settlement has not yet been agreed, although an increase is widely expected, according to the seller involved in the initial propylene settlement.
It said a larger increase for ethylene would be necessary because of eroded cracker margins and suggested that this is likely to be supported by the market being snug amid cracker cutbacks for seasonal and economic reasons, as well as ethylene derivative demand faring slightly better than for propylene.
($1 = €0.74)
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