Asian PP buyers unwilling to pay higher April prices

03 April 2005 10:13  [Source: ICIS news]

SINGAPORE (CNI)--Asian polypropylene (PP) buyers were resisting April price hikes for China and Southeast Asia destinations during the week ended 1 April, industry sources told CNI.

Producers had sought to sell April injection, yarn and biaxially-oriented PP at $1,120-1,170/tonne and general-purpose block co-polymer PP at $1,180-1,230/tonne.

All offers were quoted on a CFR China/Southeast Asia basis. These offers are $20-70/tonne above earlier sales.

A few April injection/yarn PP transactions were reported at $1,140-1,150/tonne CFR China in the Shandong area, where a plant was said to be experiencing production problems. These levels are $20-30/tonne above earlier deals.

Despite the marginal increase, the high end of the price range is still not widely accepted in Asia, market players said.

Earlier in the week, PP injection/yarn deals were done at $1,115-1,120/tonne, and most buyers are still hoping to repeat deals at that levels, market players said.

For the general-purpose block co-polymer PP grade, importers have raised their buying ideas by $10-30/tonne to $1,150/tonne CFR China, but this is still $30/tonne below the best April offers.

Southeast Asian PP importers are generally unwilling to commit to April purchases, preferring to wait for a clearer price direction from China, industry sources said.

Market observers expect the forward PP market to be relatively firmer due to concerns that propylene feedstock prices would rise on the back of tighter supply in April-May. Several crackers and fluid catalytic crackers are scheduled for turnarounds in the second quarter.

A few PP producers had indicated that they might cut output if propylene feedstock cost rises further. A potential upside for PP is that export-oriented converters in the region could ramp up production in April-May to cater to markets west of Suez, where demand for end products is usually higher in the summer months of June-August, market sources said.

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly