December PO range falls due to lower C3, spot values

LONDON(ICIS)–The European propylene oxide (PO) December contract price fell on both sides of the assessed range due to softer propylene values and a lack of consensus on spot trades, market sources said Friday.

While the market remains tight, the formula-link to propylene means prices on the low end fell by €48/tonne, or 80% of the €60/tonne propylene change.

The top end of the range, which has reflected spot trades in recent months, was softened by €100/tonne as conflicting views were expressed regarding the current spot prices.

Some sources suggested spot prices remained static due to ongoing product shortages while others said they had fallen dramatically in line with crude. The €100/tonne represents a compromise between the two contrasting views.

The December PO range stands at €1,398-1,725/tonne free delivered (FD) northwest Europe (NWE).

2015 contract negotiations are due for completion and contract fees are expected to rise by up to €300/tonne, according to one buyer. Other sources declined to comment on exact figures but conceded contract fees are due to rise considerably.