06 December 2013 23:59 [Source: ICIS news]
LONDON (ICIS)--European propylene oxide (PO) formula and freely-negotiated contract prices have settled in December at an increase of €24/tonne from November, in line with the cost pass-through following a €30/tonne ($33/tonne) increase in feedstock propylene, sources said on Friday.
The PO contract formula price is generally accepted as 80% of the propylene price change.
A producer said the market is slightly tight, due to a combination of better-than-expected demand and upstream supply constraints, which, in addition to destocking in December has left inventory levels low. It expects further tightness in January if cold weather increases demand for monopropylene glycol (MPG).
Nevertheless, some buyers said they had no problems with availability.
Buyers and seller agree, however, that prices are likely to rise in January, based on expectations of strong demand and tightness in the market, as re-stocking activity picks up in January.
($1 = €0.73)
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