US November PP poised for big drop

30 October 2008 22:33  [Source: ICIS news]

HOUSTON (ICIS news)--Some major US polypropylene (PP) suppliers have lowered offers by more than 20 cents/lb ($441/tonne, €344/tonne) this week in an effort to clear inventory ahead of even larger price drops expected in November, a buyer said on Thursday.

“Producers are trying to get rid of PP today,” a second buyer said. “Unfortunately there are not a lot of takers.”

PP buyers saw bulk prime homopolymer offered in a range from the mid-40s cents/lb to the very low 50s cents/lb this week.

By comparison, US injection grade homopolymer was assessed at 73-77 cents/lb during the week ended 24 October, according to global chemical market intelligence service ICIS pricing.

This week’s price drops were unlikely to raise buying interest because prices have not yet found a bottom, sources said.

“Seems like a race for the bottom,” said one buyer. “We’re keeping inventories tight, but I don’t think you can be tight enough now.”

The discounted PP offers emerged during the last days of October as feedstock propylene market participants adjusted their expectations for the November contract settlement.

Polymer grade propylene (PGP) buyer sentiment was now leaning toward a 30 cent/lb decrease in the November contract, sources said.

Major US PP producers include LyondellBasell, INEOS, Formosa Plastics and ExxonMobil.

($1 = €0.78)

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By: David Barry
+1 713 525 2653

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