Europe PP sellers mull record high prices for July

28 June 2007 16:12  [Source: ICIS news]

LONDON (ICIS news)--Polypropylene (PP) producers in Europe were preparing their customers for record high prices in July after Wednesday’s third-quarter settlement of propylene monomer was settled up €28/tonne ($37.70), several confirmed on Thursday.

 

Most PP producers would be attempting to cover fully the monomer hike and major polymer producer Saudi Basic Industries Corp (SABIC) had already announced a €75/tonne hike for July PP last week.

 

Third-quarter propylene was settled at €878/tonne ($1,186/tonne) FD (free delivered) NWE (northwest Europe), up €28/tonne from the last quarter.

 

Most converters dismissed SABIC’s target for July business as overambitious, particularly as the majority of producers were aiming for a much more modest increase next month.

 

Several were concerned that they would have to pay more in July.

 

“July offers have already increased by €20/tonne,” said one buyer of commodity PP. “I don’t expect to be paying more than that.”

 

“We will go for the full propylene monomer increase and will not do business below this,” said a major producer, who reported particularly low stocks after some severe production issues.

 

Producers’ inventories were low and a couple reported that their buyers had not yet fully realised the extent of the tightness in the market.

 

“Random copolymer is not tight, it is short,” said one European producer. “I simply cannot cover the demand from the market.”

 

Availability of copolymers, used in car and truck bumper manufacturing and also in medical applications, was generally considered to be tighter than homopolymer, but here too, the closure of two PP plants in Europe by the end of June, and some cracker issues, product was quickly becoming less available.

 

Major plastics producer Basell’s 240,000 tonne/year PP unit at Pernis in the Netherlands, and INEOS Polyolefins’ 200,000 tonne/year PP1 unit at Geel in Belgium would stop production as planned by the end of the month.

 

The loss of the two plants would mean a loss of 35,000 tonnes of PP monthly, according to one PP producer.

 

PP prices moved up by €20-30/tonne in June, leaving most homopolymer prices above €1,200/tonne FD NWE. Further increases will see PP prices reach a record high.

 

 

($1 = €0.74)

 

By: Linda Naylor
+44 20 8652 3214

< previous article(ICIS Podcast: Chemical News Central 2 November 2009)

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