06 March 2009 11:34 [Source: ICIS news]
LONDON (ICIS news)--Polypropylene (PP) prices in Europe are facing upward pressure this month, but buyers are resisting increases of €50/tonne ($63/tonne) against a backdrop of faltering demand and hesitation, sources agreed on Friday.
Spot PP prices were clearly up, and levels below €700/tonne FD (free delivered) NWE (northwest ?xml:namespace>
Deals as low as €650/tonne, which were common in February, had disappeared from the European market.
Inventories were reported to be low down the chain. Producers had cut back, and some sources estimated that production was running at 80%.
Strong export opportunities, particularly to
Only propylene-linked business was fully confirmed at an increase of €42/tonne over February.
“It won’t be €50/tonne. They will be lucky to get €30/tonne,” said a buyer who negotiated business freely.
Food packaging remained the most buoyant sector in the PP market, but even here production lines were sometimes cut.
“We are lucky that we are in food packaging. People still have to eat. But even so, some of our lines are idle,” said one converter.
Sectors with links to the automotive industry were weak, and industrial applications were also flat.
Most players watched developments in
In addition to the new capacity start-ups, Asian markets were also nervous about persistent bearish sentiment in the key Chinese market.
Sources said they expected European activity to pick up next week as more business was discussed.
“There is a feeling that producers might get nervous soon and start retreating from their current plus €50/tonne positions,” said a trader, although producers said they were adamant that this would not happen.
PP and PE producers in
($1 = €0.80)
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