Asian propylene margins turn negative as oil prices rebound

Asia’s propylene cash margins turned negative early Thursday after four months in the black, crushed by soaring crude oil and naphtha prices. At 0348 GMT naphtha-based propylene margins were negative by $29.50/mt, based on a naphtha cost of $542/mt CFR Japan, propylene value of $762.50/mt FOB South Korea and a conversion cost of $250/mt. Propylene margins were positive by $44/mt a week ago.

Propylene prices dropped $37.50/mt over the past week and $87.50/mt from a month ago, after Asia imported unusually large volumes of propylene and polypropylene from Africa, Europe and the Americas. A short-term propylene surplus in Malaysia due to PP plant trouble, and earlier anticipation of substantial new PP supplies from India and Saudi Arabia also caused propylene prices to weaken.

Source: Platts