A planned maintenance period at Sabic's 310,000 mt/year copolymer plant in Geleen in the Netherlands in August could further pressure an already bearish propylene market, trader sources have said.
Sabic plans to shut one of two of its copolymer lines in Geleen for two weeks in August, the company confirmed last week. Its customers have however been told that copolymer volumes will be allocated to customers for the full length of August.
The European spot price of polymer grade propylene was assessed at Eur760.50/mt FD NWE on Wednesday -- at a 3.5% discount to the July contract price of Eur790/mt FD NWE. The spot price is currently at its lowest since January 19.
Last week, propylene traders were heard pegging spot volumes of propylene at discounts as deep as 4% to the July CP.
"[The maintenance] should make the propylene market a bit longer," said a trader source on Thursday morning.
Downstream, derivative polypropylene is currently hovering around its lowest levels since January. "On paper the market should lengthen, everything is up and running and there's a lot of uncertainty on derivatives so people are careful," said a second trader source.
A third propylene trader said he was bearish for both August and September, especially as US prices were coming off. "So if there's any unexpected demand in Europe, the US will fill that," said the third trader.
US propylene spot prices have been on a steady decline since the end of the first quarter and were last assessed at $809.97/mt FD USG, or Eur710.50/mt, leaving the arbitrage from the US currently closed.
