Europe SABIC mulls PP hikes in weak market

10 April 2008 18:01  [Source: ICIS news]

LONDON (ICIS news)--SABIC intends to increase polypropylene (PP) prices by €15/tonne ($24/tonne) for the second half of April, as production issues have affected its supply position, a company source said on Thursday.

The company was also considering another hike in May.

The news came as most PP buyers were actively seeking, and sometimes obtaining, lower prices for April business.

Availability was ample as producers were unable to compete in export markets with dollar-based material and European demand was flat.

“We have already secured a price decrease for April,” said one buyer, “so I don’t see how they can talk about higher prices now.” One re-seller agreed.

“All the sellers are looking for buyers and when they don’t find them, they carry on looking. They are like the rottweiler on the scent of prey.” 

A producer said that the upcoming cracker maintenance programme would tighten availability but the majority did not expect it to have much impact. The programme was mild compared with those of the past two years.

Spot PP was widely offered at hefty discounts from March, and copolymers in particular were weak.

The Italian market reported wide offers of off-spec material at low prices and sources said that this was impacting the uptake of prime material.

Spot homopolymer injection prices were now well below €1,100/tonne FD (free delivered) NWE (northwest Europe), and gross monthly levels were talked just below €1,200/tonne FD NWE, according to global chemical market intelligence service ICIS pricing.

New production in Germany and the Middle East was also having an impact on market sentiment, which was widely described as negative.

SABIC’s 500,000 tonne/year PP production at its facility Gelsenkirchen, Germany, had been running erratically last week, and its 600,000 tonne/year PP unit in Geleen, the Netherlands, was down for five days of scheduled maintenance this week. The status of both plants was not clear on Thursday.

PP producers in Europe include LyondellBasell, Borealis, SABIC, Repsol, Dow and Total Petrochemicals.

($1=€0.63)

For more on PP visit ICIS chemical intelligence

By: Linda Naylor
+44 20 8652 3214

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