European Imports of US-Origin Propylene in April Jump 37% on Month
European imports of propylene from the U.S. in April to date have jumped by 37% from the overall total for March, as supply tightens in the region amid the ongoing Middle East conflict, according to the latest Vortexa shipping data.
Propylene imports into Europe have risen to 59,039 metric tons during April so far, up from 42,854 mt recorded for all of March, the data showed. By contrast, imports of ethylene have shrunk by 36% in the same period, dropping to 81,297 mt in April to date from the March total of 45,887 mt.
Increased propylene imports have found a welcome home at a time when Europe is in second quarter turnaround season, with several crackers and derivative units down for planned maintenance.
In addition, the imports have provided some respite during the supply chain crunch caused by the blockade of the Strait of Hormuz, which has contributed towards shortages of all petrochemicals globally, and forced price hikes amid volatile crude oil futures.
Calculated propylene spot prices surged to a calendar month rolling average price of €1,838.73 ($2,152.42)/mt FD Northwest Europe on April 27, up from €850/mt on Feb. 27, the last day before the start of the Middle East conflict. Coastal vessel average monthly prices have shot up to €1,759.93/mt CIF
Northwest Europe (NWE), up from €800/mt seen on Feb. 27.
Arbs widen as European ethylene, propylene prices rise
Ethylene spot prices have climbed to a monthly rolling average price of €1,917.05/mt FD NWE for material purchased via the European Aethylen-Rohrleitungs-Gesellschaft (ARG) pipeline system, up from €792.40/mt on Feb. 27. Ethylene deliveries via coastal vessels were seen at monthly average price of around €1,425.29/mt for CIF NWE, and €1,459.13/mt for CIF Mediterranean delivered cargoes, up from $582.40/mt for both hub deliveries.
With U.S. propylene spot prices seen at around 52.5 cents/lb or around $1,176/mt FOB U.S. Gulf Coast, and spot ethylene at 32 cts/lb or $705/mt, it is profitable to ship both propylene and ethylene cargoes to both Europe and Asia.
European spot prices are expected to increase further in May, as upstream costs also increase. Average April naphtha prices have increased $45.29/mt from the March average to $877.49/mt, and this is expected to filter into the discussions for the May ethylene and propylene contracts.
May contract prices are forecast to increase by €115/mt on month to €1,580/mt for propylene and by €105/mt to €1,700/mt for ethylene, according to data from Chemical Market Analytics by OPIS.
Looking ahead, while imports will still flow into Europe from the U.S., the region will also likely have to compete with Asian demand, as a number of petrochemical plants across Asia have also been shuttered as the Middle East conflict disrupts feedstocks and other supplies, according to market sources.
Reporting by Miguel Cambeiro, mcambeiro@opisnet.com