The Urethane Blog

Propylene Concerns in Europe

Europe PP sellers prepare buyers for potential 2019 tightness on scarce propylene

27 September 2018 13:31 Source:ICIS News

LONDON (ICIS)–Polypropylene (PP) sellers are informing customers of risks of supply tightness in 2019 due to a large number of planned cracker maintenance outages that could lead to insufficient propylene.

– Propylene to be tight in 2019

– PP likely to be affected by tight propylene supply

– Suppliers warning buyers of tight supply

One smaller PP producer has written to its customers warning them of potential supply issues, while others have been informing clients of a potentially tight PP situation verbally.

“Shutdowns may lead to a scarcity of raw materials in Europe affecting all parties operating within the industry,” wrote the producer.

Buyers said other producers had informed them of the planned outages in 2019.

While crackers – and other propylene manufacturing units – may be down some associated downstream production units will also clearly be offline.

European olefins players have long been focused on the spring 2019 cracker maintenance turnaround slate, preparations for which started very early in 2018.

Several crackers will be offline, with maintenance overlapping from March to June, taking a considerable volume of propylene out of a market already structurally tighter due to recent changes in feed slates.

While there is likely to be some derivative maintenance at the same time, which will offset the lack of production to some extent, not all derivative units will be down or will have taken steps to counteract a lack of upstream supply.

Given Europe’s sometimes poor operational reliability record, some players are concerned that there could be some periods of extreme tightness. With this in mind, there are ongoing discussions regarding import possibilities – either from Asia or the US – but it is not likely to be a cheap option.

PP has been balanced for many months, but producers have not always been able to stop erosion between monomer and polymer in freely negotiated business.

PP is used in packaging, the manufacture of household goods, and also in the automotive industry.


Focus article by Linda Naylor

https://www.icis.com/resources/news/2018/09/27/10262330/europe-pp-sellers-prepare-buyers-for-potential-2019-tightness-on-scarce-propylene/?cmpid=SOC%7CRSS%7Ctwitter%7CFreeNewsFeed