US PP spot offers up, Asia arb closed

04 April 2008 18:32  [Source: ICIS news]

HOUSTON (ICIS news)--US polypropylene (PP) sellers have increased initial April spot offers for export in response to upward movement in propylene monomer prices, sellers and traders said on Friday.

Good netbacks were still available to Latin America in April, a supplier said, but the arbitrage window to Asia has closed.

Initial offers were at 70-71 cents/lb ($1,543-1,565/tonne or €988-1,002/tonne) FOB (free on board) Houston for bagged raffia- and injection-grade material, traders said. By comparison, PP spot export prices were assessed at 67-69 cents/lb, same basis, a week earlier.

“If it weren’t for monomer increases, we wouldn’t be talking about these price increases,” a trader said. US polymer grade propylene (PGP) settlements for April were 3.5 cents/lb higher than March because of tight supplies.

A second trader said the PP market was in a strong position to maintain the higher April prices because high gasoline prices in the US would divert more feedstock refinery grade propylene (RGP) to the fuel sector and maintain tight market conditions for PGP.

Major US PP producers include Sunoco, LyondellBasell, Dow Chemical and INEOS.

($1 = €0.64)

For more on polypropylene visit ICIS chemical intelligence

By: David Barry
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