By Malini Hariharan
The blog has been writing about the softening in olefin and polyolefin prices in the US. But the European market presents an interesting contrast offering arbitrage opportunities for those willing to take the risk.
Operating rate reductions have been reported at crackers in Priolo, Italy; Tarragona, Spain; Carling, France; Cologne, Germany; and in the UK at Grangemouth, writes Nel Weddle the ICIS pricing olefins editor.
However, none of these have been officially confirmed by the companies concerned. But operating issues have been confirmed at Borealis’ cracker at Porvoo, Dow Chemical’s No 2 cracker at Terneuzen and LyondellBasell’s plant at Berre in France.
Enquiries for spot ethylene have increased but propylene remains soft as problems at derivative plants has freed up supplies.
Linda Naylor, the ICIS pricing editor for polyoelfins, reports that tight supplies have forced some PP buyers to agree to a price hike of Euro30/tonne (about $38/tonne) for May shipments.
Buyers had hoped that the tightness experienced since January would ease in May. But the situation has not eased because of operating issues at plants around the region.
Firm European prices should tempt traders to bring in product from other regions. But no deals have been reported as a weak Euro coupled with expectations of a price slide in the second half of the year has made traders reluctant to take a position in the market.