Market and product

A tight European propylene market is forcing buyers to seek material elsewhere, sources said this week, but arbitrage opportunities from Asia and the US have not been apparent.

This has left a growing need in the European market and one that could be dictated by a seller who is able to get material.

"It's not about price but availability at the moment," a producer source said while a trader said: "I've been approached by so many buyers this week but I can't help them as getting material from anywhere is hard."

There may be a little relief, with a shipment of refinery grade propylene set to leave Brazil immediately. A shipping source said Friday the 3,000 mt of product may be headed for Europe.

In Europe polymer grade propylene spot prices were assessed at Eur795/mt [$898] FD NWE Thursday and in the US at 40.5 cents/lb [$893/mt] FD USG. In Asia prices were assessed at $800/mt FOB Korea Friday.

On price, imports from Asia into Europe look the most likely, but like Europe the Asian market is facing a shortage.

"Actually, the [Asian] price is increasing because of the cargo shortage in domestic China. Some sellers in the Shandong [area] are shut," a China-based source said.

Delivered prices in China were heard at Yuan 7,100-7,200/mt in the Shandong area -- equivalent to about $903/mt to $916/mt on an import parity basis.

In the US prompt-month and September deliveries are at their highest level since May 2015, based on a draw of inventories, a higher energy complex, firming feedstocks and a push from RGP pricing. - Platts