07 April 2009 12:03 [Source: ICIS news]
By Linda Naylor
LONDON (ICIS news)--European polypropylene (PP) buyers are resisting proposed hikes for April in sharp contrast to the export situation, where strong demand has led to higher prices over the past few days, sources said on Tuesday.
“We have got rollover on all our April business,” said one buyer. “One of our suppliers started off with a €30/tonne ($40/tonne) increase, but that went down to plus €10/tonne yesterday, and today they have done a rollover.”
“We have still not settled March, let alone April,” said another large buyer. “We are closing another line in April so we are in no hurry to buy more product.”
Sellers acknowledged that demand was poor.
“April was always going to be a weak month,” said a major PP producer. “We have cut back production and are prepared for a short month. We are still looking for increases but have done rollover at some higher-priced accounts.”
PP production had been widely cut back in ?xml:namespace>
Strong demand from
“Netbacks for export are better than in the domestic market,” said a PP producer who had taken advantage of the sharp increases, particularly in the Indian market.
“We are taking a risk by selling so much overseas. If demand comes back in the second half of the month in
Export prices for homopolymer injection were at $1,050/tonne CFR India, while net European homopolymer prices were reported by buyers to be as low as €690/tonne FD (free delivered) NWE (northwest Europe) in some cases.
Inventories along the chain were widely thought to be very low. Many converters were waiting for new capacities in the
“Testing will take time but the new capacities are bound to have an impact on the European market by June at the latest,” said another buyer.
Some producers were still looking for higher prices in April but they admitted that the level of resistance was very high.
PP and PE producers in
($1 = €0.75)
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