Propylene costs in Asia fell below $900/ton threshold

The propylene costs based on FOB Korea term hit multi years high levels during mid February 2017, bolster by limited availability amid maintenance shutdown season. However, it has been steadily going down since then, and this week fell below the $900/threshold for the first time since more than a month, reaching $885/ton as of Wednesday, 15 March 2017.

Compared to its peak during mid February, propylene based on FOB Korea has plunged by $115/ton and might extent the softening trend in the coming days. Market participants blamed the persistent weak demand condition at the downstream PP market to be the cause of the price decay. However, regional players are expecting prices to stabilise in the near term.

A market source commented, “PP demand in China is on recovery track and might continue to improve in the coming week. This could help to boost PP prices and normalise the price gap between propylene (C3) and PP.” The source added that the on going maintenance shutdown in Japan and Korea might also support the sentiment in the near term.