(updates throughout, recasts headline for clarity)
LONDON (ICIS)--The European propylene monthly contract price (MCP) for July has been fully agreed at €1,175/tonne, up by €15/tonne from June, following further seller support received late on Thursday afternoon.
The initial settling buyer said it had concluded this with one main producer, who has also agreed the same number with a second consumer.
A second producer has followed the agreement with the same two buyers, who were involved in the initial settlement.
The contract price is agreed on a free delivered (FD) northwest European (NWE) basis.
One of the settling buyers said it was "a compromise” between feedstock cost pressure and the propylene supply situation, which is widely described as plentiful. It added that the plus-€15/tonne increase was not good news for it due to its derivative challenges in the export market, but said it is the best that could be achieved in view of the higher feed pressure over the last month.
One of the settling sellers said that plus-€15/tonne was linked to the feedstock-pass through increase over the last month. It added that a lower increase for propylene contract price was widely expected when compared to ethylene, as propylene is more of a long market.
Buyers’ July MCP price ideas had generally centred on rollovers to modest increases, while producers had been pushing for rises of €30-60/tonne.
In related news, the ethylene monthly contract price for July was fully confirmed earlier on Thursday at plus €50/tonne at €1,220/tonne FD NWE, driven largely by firmer feedstock costs, as well as a balanced-to-tight ethylene market.