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(ICIS) -- Spot liquidity in the northeast
Asian propylene (C3) market may rise this year, as some buyers in China plan to
reduce their contractual commitments given high premiums being sought by
traders, market sources said on Tuesday. Traders are asking premiums of as high
as USD40-50/tonne (EUR32-40/tonne) above the published CFR (cost and freight)
northeast (NE) Asia prices for 2012 settlements, roughly double those recorded
for last year’s contracts with Chinese buyers, they said. In 2011, propylene
contracts with buyers in China - Asia’s largest spot consumer - had
premiums averaging USD20-30/tonne.
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China imported around 1.55m tonnes of propylene in January to November
2011, exceeding the 1.52m tonnes the country took in for the whole of 2010,
according to official data. “The [propylene contract] premiums are very high
this year - some are asking as much as USD50/tonne, which is not acceptable,”
said one Chinese propylene importer. “We are likely to buy more propylene from
the spot market because it is tough to negotiate the contracts,” he
added.
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