India PP breaches $2,000/t mark on tight supply

12 June 2008 08:46  [Source: ICIS news]

SINGAPORE (ICIS news)--Polypropylene (PP) imports into India touched a new record high of $2,000/tonne, with prices rising by the hour on tight supply and strong demand, suppliers and buyers said on Thursday. 

This marks a 26% or $420/tonne jump from a month earlier. Prices were assessed on a CFR (cost and freight) India basis.

A PP converter said it purchased a 300-tonne raffia grade PP cargo at $2,000/tonne from a global supplier, within hours of sealing a deal for a similar sized cargo from a second global supplier at $1,956/tonne.

"The market is going crazy, and it will be impossible to pass on these costs to my own customers. But I have no option but to buy if I want to continue running my business," the converter said.

Offers were also heard at $2,050/tonne on Thursday afternoon, but no deals could be confirmed at that level.

A converter of PP film said it had booked a 400-500 tonne film grade cargo at $1,930/tonne on Tuesday, but was shocked to see offers climbing by $100/tonne in the space of two days. "If prices jump any higher, it will become impossible to run our factories," it said.

But in a situation of limited availability, buyers have no bargaining power, an end user said.

PP suppliers sought to justify the price hikes, citing high feedstock costs and rising prices in China.

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By: Prema Viswanathan
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