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(ICIS) -- A combination of exports and
cracker operating rate reductions over the past four months has helped to offset
some of the bearish pressure on propylene, which resulted from poor demand from
its derivative polypropylene (PP) and varied production problems, market sources
said on Friday.
About 100,000 tonnes of propylene has been booked for export since July,
primarily to the US Gulf and Americas, the sources added. This has gone a long
way to rebalancing players’ systems.
Weak demand and ever decreasing prices
in Asia has led to little interest in exporting east. Shipowners are not keen to
offer competitive freight rates to Asia, with one saying “ships that end up
there have nothing to take back, and rates are just too high".
But despite the slump, European players have worked to inure themselves
against the demand slowdown. The propylene market is still viewed as
balanced-to-long, and could lengthen further as a result of waning export
potential and little sign of improvement in terms of demand.
US propylene contract prices for October settled down a significant 14
cents/lb ($309/tonne, ?224/tonne) from September, and spot prices have followed
suit. This, together with the sizeable volume already imported, will limit
export options.
Sources said the ability to move volumes from the European system has
been the market’s saving grace, but now it would be more difficult to manage
volumes.
mrcplast.com
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