Propylene Prices (Q1 2022)
In Q1 of 2022, the propylene market accelerated its drop, with the mainstream market price falling to 8,200-8,400 RMB/MT. The price of international crude oil had plummeted, and the downstream polypropylene market remained slow. The recent domestic outbreak had also resurfaced, affecting logistics and manufacturing in certain locations. The market's trade level fell even further, which was terrible for the market, and merchants had to lower their rates to receive orders.
Propylene Prices (Q4 2021)
The North-East Asian area saw a progressive change in cracking capacity, with naphtha rapidly surpassing propane as the favored feedstock due to decreasing arbitrage profits on US LPG imports. The import price range for propylene was somewhat wider, with average CFR prices of 1020 USD/MT, up from 1010 USD/MT in Q3, while FOB prices for South Korea were estimated at 1010 USD/MT in Q4, a 25 USD/MT increase over the Q3 average. India, on the other hand, saw a buyer's market, owing to the fact that the fourth quarter is marked by a lengthy festival season, during which demand for chemicals normally declines. Prices declined from an annual high of 1190 USD/MT in July to 930 USD/MT in December.
During the fourth quarter, European markets saw a progressive movement in imports away from regional markets and toward Asian propylene, owing to larger arbitrage margins. While the average price of propylene sourced domestically was assessed at 1245 USD/MT on an FD Hamburg basis in Q4, the average price of propylene imported from North-East Asia was assessed at 1135 USD/MT on a CIF Hamburg basis. Thus, Asia-sourced propylene was at least 50 to 60 USD/MT cheaper during Q4.
Throughout Q4 of FY21, the North American propylene market demonstrated an unparalleled level of constancy in trend. While the price of refinery grade propylene remained relatively insensitive to downstream market movements, the price of PGP changed in lockstep with downstream polypropylene pricing. Following a supply-scarce third quarter during which refinery production was impacted and supply networks along the gulf coast were interrupted by hurricane season, the early half of Q4 remained a seller's market. However, the trend reversed in the second half of Q4, when feedstock naphtha and LPG prices began to fall in the first week of November and maintained their decline through the end of December. The average price of propylene for refinery and polymer grades was 520 USD/MT FAS Houston and 1640 USD/MT FOB Houston, respectively.
Propylene Prices (Q1-Q3 2021)
Supplies in China were scarce in the second quarter of 2021, as numerous refineries and PDH plants in the country completed turnarounds in the first part of the quarter, aided by South Korea's tight market outlook. Due to the high cost of raw materials, some downstream manufacturing units had their profit margins reduced. Price discussions FOB Qingdao resolved at 1281 USD/MT in June. Prices in the Asia Pacific area were range-bound during the third quarter, as demand for downstream polypropylene increased but supply remained plentiful. However, prices in the domestic market continued to decline, accompanied by reduced demand in some regions of Asia as a result of additional delta variant instances. In China, conversations of downstream polypropylene remained sparse because to the market's downturn in response to Covid infections. In India as well, enough supply in the face of strong demand drove the prices down from 1175 USD/MT to 1158 USD/MT per MT during the third quarter.
Supplies in the European area remained constrained during Q1, as a result of refinery production being decreased due to the continuing pandemic and lockout limitations. Demand, on the other hand, maintained a steady trend throughout the quarter. Exports migrated away from the United States and toward Asian sources as a result of the US's adverse weather conditions, which reduced freight movement. During the first quarter, the Asian region's supply remained balanced, mainly due to the inclusion of new facilities in China, followed by the restart of significant facilities in South Korea, including LG Chem.
After a turnaround and announced expansion of its ethylene and propylene plant, Yeochun NCC (YNCC) began production in the second half of Q1 2021. However, when the arbitrage between the European and North American regions emerged, Asian producers moved their stockpiles to meet western demand for more income. Demand in Asia increased significantly throughout the quarter, owing to improved offtakes from the downstream industry. Prices were solid in Q2 due to increased demand and limited supply, with CIF NWE offers ending at 1400-1420 USD/MT, up from a multi-year low in early June.
Supply in Europe increased significantly in the third quarter of 2021, owing to the recovery of PDH plants, crackers, and refineries. Prices in Germany continued their upward trajectory and settled at 1305 USD/MT FD. Hamburg in Q3 2021, followed by a large increase in the up-stream’s pricing.
During the first quarter of 2021, supplies were scarce in the region, constricting margins for downstream derivatives, resulting in an increase in demand, while numerous petrochemicals manufacturing units shut down in the US gulf region due to deep freeze weather. Domestic PGP prices soared to an all-time high of 1950 USD/MT in mid-February. Market morale improved gradually during the preceding quarter and steadied by the end of April. Demand in the North American area was bolstered by increased inquiries from both the domestic and international markets. Offtakes from the regional plastic market increased as economies recovered from the impact of COVID. Prices in the US maintained on a downward trend during Q2's first half and then steadied in the second half, with FOB Texas negotiations in June ranging between 710-745 USD/MT. Propylene's general market prognosis in North America improved in the third quarter of 2021.
Polyethylene prices in Latin America fell in the week beginning April 25 due to additional material being available on the market and lower Asian costs. Since early March, the Latin American region relied heavily on imports from Europe and Asia, while the United States' export quantities had been limited, allowing Asian markets to make more competitive offers than the United States. Under very tight market conditions, the Brazilian plastics sector was beginning to notice the first symptoms of declining demand following a year of price rises and fears of more in the coming days.
Some resin purchasers anticipated Braskem to announce April price increases, after February price increases of 125 USD/MT for polypropylene and March price increases of 320 USD/MT for all PP grades. While some market players anticipated Braskem to hike April prices by up to 15%, others believed prices would remain stable, since worldwide prices had stabilized and domestic demand decreased after several Covid-19 lockdowns were restored in March.
Propylene Prices Overview 2020
China's demand remained relatively consistent, with purchasers reporting the commissioning of two Propane Dehydrogenation (PDH) facilities with a combined nameplate capacity of 1050 KTPA in July. The supply was noted to be tightening across Asia towards the end of Q3, with pricing talks steadily intensifying, notably in northeast Asia. Numerous scheduled and unforeseen interruptions impacted the operation of Naphtha facilities using fluid catalytic cracking (FCC) and steam cracking technology in Japan. In mid-September, with manufacturers stressing constrained regional supply, CFR China prices were evaluated at 900 USD/MT.
The pricing graph exhibited a rising tendency in July, when it was valued at around USD 780 per tonne FD NWE, before progressively decreasing at the end of the quarter. Prices stabilized in a limited range in the third quarter, with the demand forecast mostly mixed-to-low due to unstable economic conditions. The product's timely availability was harmed by unanticipated cracker turnarounds in early August, which were addressed by the first half of September. While refineries continued to operate at reduced rates, the major driver of the market, naphtha, was marginally weaker in August than in July.
A series of force majeure declarations in response to storm Laura resulted in a brief disruption of regional supplies. The protracted stoppage of BASF Total's Port Arthur cracker in Texas impacted regional propylene supplies. US Gulf prices increased as production concerns were resolved and prospects improved as manufacturing activity steadily increased throughout the quarter. Polymer-Grade Propylene (PGP) contract prices in the United States were settled at a one-year high of roughly 715 USD/MT in July, while Chemical-Grade Propylene (CGP) contract prices were evaluated at 683 USD/MT.
Brazil, according to the United Nations' COMTRADE database on international trade, exported propylene and other olefins, prim forms to Peru which totaled USD 48.33 million in 2020. Argentina exported polymers derived from propylene or other olefins in their primary forms to China for a value of USD 18.37 thousand in 2020.
Procurement Resource provides latest prices of Propylene. Each price database is tied to a user-friendly graphing tool dating back to 2014, which provides a range of functionalities: configuration of price series over user defined time period; comparison of product movements across countries; customisation of price currencies and unit; extraction of price data as excel files to be used offline.
Procurement Resource provides prices of Propylene for several regions around the globe, which are as follows:
Propylene, an unsaturated organic compound, is basically a colourless gas with a faint petroleum like odour. It can be produced as a by-product from naphtha crackers, among other production methods. It is used as the raw material to produce a variety of products and serves as a significant starting material in the petrochemical industry. It is majorly used to produce polypropylene, a polymer used in various end use sectors.
Chemical Formula of Propylene:
Steam cracking is the dominant technology for producing propylene. The naphtha is one of the major feedstocks used in the process. Propane obtained from these feedstocks undergoes dehydrogenation to finally produce Propylene, where the by-product is hydrogen.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).