The contract price of propylene in Europe for June supplies was agreed at the level of EUR1,032 per tonne, which is EUR80 per ton higher than the level of May, the market participants told ICIS on Wednesday.

The contract price was approved on the terms of delivery of FD NWE (with delivery to North-Western Europe).

This contract price (an increase of 8% in relation to the previous month) was directly confirmed by two manufacturers and two consumers of the material, which is the minimum necessary configuration for the approval of the contract price of propylene.

The increase in the contract price of propylene for the next month was expected due to a sharp increase in the prices of naphtha in May compared with April.

In addition, the supply of propylene in the European market is limited, and players have to deal with high spot prices for the material if they want to get additional amounts of propylene from Asia or the US.

Earlier it was noted that the May contract price of propylene in Europe was approved at the level of EUR952 per ton, which is EUR25 per ton higher than the April price.

Propylene is the main raw material component for the production of polypropylene (PP).

According to the DataScope of the company MRC, the total volume of PP production in Russia grew by 7% in January-April 2018 compared to the same indicator of 2017 and amounted to slightly more than 496.1 thousand tons. At the same time, not all manufacturers showed an increase in output.