Northwest European ethylene spot prices remained supported this week, despite the recent collapse in propylene prices, sources said.
Propylene prices fell Eur136/mt week on week to close Monday at Eur520/mt FD NWE. This occurred as ethylene remained stable at Eur888/mt FD NWE.
Ethylene was regarded as balanced to tight, with that outlook supported by upcoming autumn maintenance in Northwest Europe. Borealis’ Stengunsund, Sweden, cracker; LyondellBasell’s Muenchsmuenster, Germany, cracker; and Dow’s Bohlen, Germany, cracker were all expected to go into turnaround.
Propylene, however, collapsed following an influx of imports from the US. The influx was caused by excess supply in the US after increased lighter cracking, sources said.
“We were not expecting it,” a cracker operator said, referring to the propylene length. “Although signs of weakness were evident, the magnitude is a surprise and the result of several conspiring issues that were not really predictable.”
Because of falling propylene prices in Europe, the arbitrage from the US is now less feasible, sources said, which should allow oversupply to diminish.
US propylene was assessed at 28 cents/lb ($698/mt) FD USG Monday, compared with $589/mt in Europe.
Freight from the US Gulf Coast to Northwest Europe was pegged at $130-$190/mt.
