Category

Countries

Propylene Prices Soared in Europe Amidst Supply Constraint during February 2024
Propylene Prices Soared in Europe Amidst Supply Constraint during February 2024

Propylene Prices Soared in Europe Amidst Supply Constraint during February 2024

  • 06-Mar-2024 2:08 PM
  • Journalist: S. Jayavikraman

February 2024 witnessed a continuous uptrend in the European Propylene market due to a confluence of supply chain disruptions and limited availability. This situation has been ongoing since the beginning of 2024, with no signs of immediate relief. Not only the force majeure at Moerdijk PGP production facility in the Netherlands but also the maintenance shutdown at Total Petrochemicals in Gonfreville, France have been attributed to the tight spot flow during February.

As per the prevailing sentiments, the already tight spot market of Propylene experienced a continuous bullish trend during February to settle at a hike of 3.3% and assessed from 1061 USD/tonne to 1097 USD/tonne for Propylene FD Hamburg, Germany during this timeframe. Several production issues were the pivotal reason for the constrained availability in the Propylene market. A major contributor to the tight supply was the force majeure declared by Shell at their Moerdijk PGP production facility in the Netherlands. This facility boasts a capacity of 510,000 mt/year, and a breakdown in their liquefaction compressor has halted polymer-grade propylene production. Likewise, a planned maintenance at Total Petrochemicals' Gonfreville plant in France having a capacity of 10833 MT/yr further restricted propylene availability during February 2024.

In terms of an overall logistical challenge, the resumption of train driver strikes in Germany in January significantly impacted the movement of goods within the European market. This disrupted inland transportation and limited coastal transactional activity due to a lack of available vessels. Nonetheless, the ongoing attacks by Houthi rebels in the Red Sea are causing delays and increasing freight costs for maritime shipments originating in Asia. This vital trade route is crucial for propylene imports into Europe, and the current situation is pushing transporting prices upwards. Henceforth, the combination of limited supply and logistical bottlenecks has created a bullish market trend that restricted the availability of propylene as buyers have competed fiercely for the limited stocks available. This fierce competition has driven prices higher throughout the market. Traditionally, spot materials were offered at slight discounts compared to contracted supplies. However, due to the tight supply situation, these discounts have shrunk significantly which resulted in soaring Propylene costs within Europe.

As per ChemAnalyst, a further rise in Propylene prices in Europe is expected as the ongoing situation in the Red Sea will continue to influence import prices.  Moreover, the higher Propylene costs could potentially translate into increased production costs and ultimately, impact product prices for consumers in the upcoming weeks.

Related News

US Propylene Market Slumps Amidst Supply Glut During April 2024
  • 23-Apr-2024 2:10 PM
  • Journalist: Shiba Teramoto
Clariant Launches Advanced Catalyst for Propane Dehydrogenation
  • 19-Apr-2024 11:37 AM
  • Journalist: Gabreilla Figueroa
Enterprise Restarts Propylene Production Operations in Texas
  • 16-Feb-2024 4:24 PM
  • Journalist: Stella Fernandes
Enterprise Halts Propylene Production in Texas for Maintenance
  • 12-Feb-2024 4:33 PM
  • Journalist: Rene Swann