Europe olefins July discussions on hold after Brexit vote

LONDON (ICIS)–European ethylene, propylene and butadiene (BD) contract price discussions for July appear to have been put on hold following the Brexit vote, market sources said on Friday.

“There is no real value in taking positions today,” a contract participant said, due to the uncertainties, the volatility and turbulence on feedstock markets, stock exchanges and currency.

“I think people will prefer to take a bit more wait and see till Monday,” a second contract player said.

BD discussions had got under way earlier in the week and up until Thursday there had been some confidence amongst some participants that there could be a final settlement by the end of the week.

“On BD I see today zero discussions,” the second contract player said.

Ethylene and propylene contract price discussions had been a bit slower to start with anyway. Many sources said they had only had preliminary exchanges of information with their counterparties and some had still to formulate their official positions following internal meetings.

As is usual, few sources were willing to disclose their price ideas for the July contract prices, but sources have pointed out the uptrend in feedstock costs over the month – even with the drop in naphtha so far on Friday – and the tighter than expected supply and demand balance on ethylene and propylene at least – as factors that will have an influence on the discussions next week.

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