The European spot price of polymer grade propylene has risen to be assessed at parity with the contract price for June at Eur652.50/mt ($740/mt) FD NWE, Wednesday, compared with a discount of 1-3% last week, market sources said.

The rise was attributed to planned and unplanned outages which were restricting supply of propylene from steam crackers, refineries and propane dehydrogenation units.

Polymer producer LyondellBasell had declared force majeure on polypropylene production from Tarragona, Spain on Wednesday following an unplanned shutdown at its propylene supplier.

LyondellBasell is primarily supplied by neighboring BASF Sonatrach PropanChem's PDH plant, which has a propylene production capacity of 350,000 mt/year.

Meanwhile, production issues had been heard at Dow Chemical's cracker in Bohlen, Germany, a customer said Wednesday. The cracker has an ethylene capacity of 565,000 mt/year.

BASF's cracker Ludwigshafen, Germany is in planned maintenance this month. Maintenance at the 660,000 mt/year ethylene cracker is expected to last until July, market sources told S&P Global Platts.

Naphtachimie's cracker in Lavera, France, remains in force majeure in response to strike action in the country. A buyer of ethylene from Naphtachimie said at the beginning of this month he did not expect the cracker, which has been under force majeure since the end of May, to restart production until this week.

The Naphtachimie cracker, a joint venture between Ineos and Total, has the capacity to produce 775,000 mt/year of ethylene.

BASF, Dow and Ineos were not immediately available to comment on their crackers.

Strike action in France called by the CGT labor union against changes to labor legislation continues to disrupt refinery and port operations, impacting propylene supply.

Total's refineries at Gonfreville, Donges, Grandpuits and Feyzin had been at a complete standstill since the end of May. Total confirmed Monday that Grandpuits had now restarted and a spokesman for the company said that some units at Gonfreville and Feyzin were also now in a preliminary restart mode.

However, Belgium's labor unions are calling for a nationwide strike June 24 against changes in labor legislation, which could impact refinery production again in NWE.

–Amar Carmody, amar.carmody@spglobal.com
–Edited by Maurice Geller, maurice.geller@spglobal.com

http://www.platts.com/latest-news/petrochemicals/london/european-propylene-spot-price-rises-to-meet-contract-26463633