Europe’s PP buyers aim for €30/t fall in prices

07 March 2008 13:32  [Source: ICIS news]

LONDON (ICIS pricing)--Polypropylene (PP) prices in Europe are under downward pressure for March, market players agreed on Friday, with buyers pushing for a €30/tonne ($46/tonne) drop, while sellers were attempting to limit the damage to a maximum loss of €20/tonne.

 

“All our offers are lower than in February. Some are linked to volume, which we are not keen on taking, but all are lower,” said one large PP buyer.

 

“It is clear that prices are under pressure but with oil at over $100/bbl, they cannot fall that far,” said one PP producer.

  

“It is still early days for March,” said one large buyer, who felt that delaying purchases for the month would be to its advantage.

 

Demand in January and February was weak - with prices in the €1,200s/tonne FD (free delivered) NWE (northwest Europe) range - and while a couple of producers reported stronger offtake in March, others continued to describe disappointing volumes.

 

Propylene was also weak and several upstream players felt that the current spot situation, weakened by competition from dollar-based sellers, suggested a drop in second-quarter propylene.

 

This would inevitably impact PP prices further, market sources said.

 

Export opportunities for PP producers were also limited due to the weak dollar, as competition was generally based on the weaker currency.

 

Production throughout Europe was running well and imports from South Africa and Brazil were also on offer.

 

PP producers in Europe include BasellLyondell, INEOS Polyolefins, Borealis, Total Petrochemicals, Saudi Basic Industries Corp (SABIC) and Repsol.

 

($1 = €0.65)

 

For more on PS visit ICIS chemical intelligence

By: Linda Naylor
+44 20 8652 3214

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