Propylene escalate in Asia on tightening supply, uptrend might persist

In Asia, propylene costs have been following the firming trend for nearly three weeks in a row, accumulating a total increase of $60-90/ton compared to early May 2017. Sharp hike is recorded this week with propylene based on FOB Korea term jumped $40/ton on Thursday, reaching the highest level since mid-March 2017. 

Players attributed the recent hike to the fact that supply in Asia, especially from Fareast Asia region is tightening amid several on going shutdown. The following table briefs maintenance schedule at some of regional and international crackers. 

There are at least five major crackers in Japan and Korea with combined propylene capacity of approximate 1.45 million tons/year will be taken off-stream between May and July this year. Therefore, industry experts believed that this could keep market on the firming track throughout June, especially when downstream PP market is recovering, which might generate more support.