US MPG October price hike stalling
23 October 2009 19:43 [Source: ICIS news]
HOUSTON (ICIS news)--A proposed price increase for October US monopropylene glycol (MPG) was headed for failure because of falling feedstock prices and the rapidly approaching end-of-year tax on inventory, sources said on Friday.
Producers proposed a 5-cent/lb ($110/tonne, €74/tonne) increase for October. The proposals were made in September, when the settlement for feedstock chemical-grade propylene (CGP) peaked at 55.5 cents/lb.
In October, however, CGP contract prices dropped 10 cents/lb to settle at 45.5 cents/lb, putting the success of the October increase in doubt, a trader said.
“I made some export deals for MPG, and buyers were not paying above the September price,” the trader said, adding that November prices were likely to be flat with September prices, as well.
Along with falling feedstock values, the looming end-of-year tax on inventory was also eroding MPG price support, a reseller noted, adding that buyer habits were already beginning to change.
“Customers are going to just-in-time ordering, and they are ordering smaller amounts. No one wants to have product sitting around at the end of the year,” the reseller said.
US MPG producers include Arch Chemicals, Dow Chemical, Huntsman and LyondellBasell.
($1 = €0.67)
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By: Gene Lockard
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