ICIS Value Chain: Propylene

■ US spot prices have started to rebound on sentiment that the market has hit its floor.

■ US RGP/PGP spread has been wider than normal on softer RGP.

■ US supply remains tight until the wave of PDH units hits in 2015 and beyond.

■ Europe supply should improve in H2 on a major outage in downstream PO.

■ Increased Asia supply could lead to less demand for exports from Europe.

■ Europe material and derivatives could become the most expensive.

■ Asia supply to rise, especially in China, from new PDH units using propane feedstock. This is likely to hurt margins, even as feedstock costs fall.

■ Asia demand should improve, which will likely absorb some new capacity.