Global spot propylene costs move further south Spot propylene costs continued to lose noticeable ground in global markets as energy and naphtha markets maintained their bearish trend during the course of the past week. Consecutive decreases in upstream costs combined with poor downstream demand led to expectations of further falls while causing an increasing number of buyers to step out from the market.
NYMEX crude futures contracts for June delivery declined more than $11/barrel since May started, with $1.81/barrel of this drop occurring during the past week. Similarly, ICE June Brent crude prices fell more than $8/barrel since the start of this month, while they lost around $1/barrel during last week. Facing downwards pressure from the persistently bearish energy complex, spot naphtha markets inevitably posted additional drops over the week. In Asia, spot values plummeted $40/ton on a CFR Japan basis week over week, while prices lost another $15/ton in Europe on CIF NWE basis. When compared to the end of April, the most recent figures represented a decrease of $90/ton in both regions. In Europe, despite some production cutbacks, spot propylene prices plunged €120/ton on FD NWE basis during last week in tandem with relentless drops in naphtha feedstock costs and muted buying interest from the downstream PP market. According to market sources, naphtha supply loosened as the industry focused on lower cost feedstock, propane, and due to restarting refineries. Now that spot propylene prices fell by €130/ton since early May, June monomer contracts in the region are expected to settle lower than May levels. In Asia, spot propylene offers decreased by $110/ton on FOB South Korea basis compared to the previous week, while the cumulative drop with respect to early May reached $150/ton. Seeing steep losses in the last few weeks, most buyers preferred to follow a “wait and see” policy in a bid to see a clearer market scene for the coming weeks. In the US, spot polymer grade propylene prices recorded a sharp decrease of 9 cents/lb ($198/ton) on DLVD USG basis last week in the midst of a lack of healthy demand and retreating upstream costs. The recent levels represent a massive fall of 15.75 cents /lb ($347/ton) with respect to the end of April. In contrast to initial flat nominations for June, other contract announcements for polymer grade propylene emerged with drops between 3 cents/lb ($66/ton) to 10 cents/lb ($220/ton). -- CA. Rajesh Desai -- You received this message because you are subscribed to the Google Groups ""GLOBAL SPECULATORS"" group. To post to this group, send email to [email protected]. To unsubscribe from this group, send email to [email protected]. For more options, visit this group at http://groups.google.com/group/globalspeculators?hl=en.
