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Spot liquidity in the northeast Asian propylene market may rise this year

January 17/2012

(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 years contracts with Chinese buyers, they said. In 2011, propylene contracts with buyers in China - Asias largest spot consumer - had premiums averaging USD20-30/tonne.

Spot liquidity in the northeast Asian propylene market may rise this year


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.


Traders said that volatile feedstock naphtha prices and the increased procurement costs of getting term supplies from South Korea - a key exporter of propylene in Asia - justify the sharp premium increase. Some South Korean producers have locked in 2012 contracts with regional traders at a discount to CFR NE Asia prices.


mrcplast.com

Author:Marina Ivanova
Tags:propylene.
Category:General News
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