China PO to reach CNY17,000/t on soaring C3

09 June 2008 10:30  [Source: ICIS news]

SINGAPORE (ICIS news)--Chinese propylene oxide (PO) prices are poised to hit yuan (CNY) 17,000/tonne ($2,457/tonne) before July on soaring feedstock propylene values, sellers and buyers said on Monday.

“Prices went crazy last week and it’s not over,” an end-user said. "Many market players are expecting prices to reach CNY17,000/tonne DEL because of high raw material expenses and limited supply."

Prices were at CNY15,700-16,100/tonne DEL (delivered) at the end of last week, up a massive CNY1,800-1,900/tonne over five consecutive weeks, according to global chemical market intelligence service ICIS pricing.

Local PO plants were running at reduced rates due to poor economics, sellers and buyers said, adding that the average output of major plants was no more than 60-70% of capacity as producers faced difficulty in passing on costs.

Also restricting production rates were mandated measures to curb pollution ahead of the Olympic games in August.

Adding to poor business conditions was the limited transport availability in China owing to a diesel shortage, the sources said, adding that refiners had cut back production on record high crude costs.

($1 = CNY6.92)

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ICIS Copyright © Reed Business Information 2009

Author: Hsin Hun Wan
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