Chile PP prices jump amid propylene shortages

28 March 2008 22:59  [Source: ICIS news]

HOUSTON (ICIS news)--Chilean polypropylene (PP) supplier Petroquim announced price increases for April amid raw material shortages that will be aggravated by a refinery turnaround, a company source said on Friday.

Petroquim plans to increase prices by $50/tonne (€32/tonne) in April to a minimum of 1,670/tonne for the domestic market. Domestic PP prices at the distributor level would be set at $1,780/tonne DEL (delivered) and higher.

April export prices would be at a minimum of $1,700/tonne, but it was unlikely that any material would be exported, the source said.

After a month of normal production in January, propylene (C3) supply shortages curbed PP production at the Petroquim plant in February and March, the source said.

Conditions will not get any better in April because ENAP, the local refiner, will stop its C3 production for one month starting on 1 April.

The propylene supply for Petroquim was running 8% below expectations, and this was the main cause of PP shortages in Chile.

Petroquim has been looking for PP imports to satisfy key clients in Chile, even facilitating material at break-even price levels, the source said.

Supply remained tight in the region with an upcoming turnaround by Brazilian PP producer Polibrasil, oversold volumes in Argentina and a similar situation in Colombia.

Small volumes from Ipiranga (now Braskem) have arrived in Chile at about $1,645/tonne CFR (cost and freight) Chile main port, the source said.

Product from India was arriving in Chile at competitive prices but in small volumes. Korean product was still unavailable, the source said.

Petroquim’s Concepcion plant south of Chile’s capital Santiago has a nominal production capacity of 150,000 tonnes/year.

($1 = €0.63)

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By: George Martin
+1 713 525 2653

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