(ICIS) -- Firm feedstock costs and a strong US dollar has pushed the European propylene (C3) January monthly contract price (MCP) up 11.5% to a record high, while the ethylene (C2) contract price is the highest seen since the fourth quarter of 2008, market sources said on Friday.
Propylene settled at ┬1,070/tonne ($1,408/tonne), up by ┬110/tonne from December. The previous high was when the contract settled for the third quarter 2008 at ┬1,015/tonne, although in May and June of this year contract prices hit ┬1,000/tonne.
Ethylene was up by ┬105/tonne to ┬1,110/tonne for January, still some way below the record high of ┬1,228/tonne confirmed for the third quarter 2008.
The contracts, which settle on a free delivered (FD) northwest (NWE) basis, were first agreed late on 22 December by a major producer and a major integrated consumer. Remaining contract buyers and sellers were quick to follow.
Olefins producers were able to secure three-digit increases on both C2 and C3 because of negative pressure on cracker margins and a tighter-than-expected supply and demand balance.