18 January 2010 14:58 [Source: ICIS news]
LONDON (ICIS news)--Polypropylene (PP) buyers in Europe are paying price increases in January but buying is being done on a hand-to-mouth basis ahead of the February propylene settlement and amid concerns over the outlook for the year, market sources said on Monday.
Regional differences and a wide spread of prices were reported by market sources.
“Customers are still reluctant to start buying. You can sell single trucks, but they want the material within 48 hours,” said one seller in
“They know that they have to pay higher prices and accept it, but if you can’t deliver immediately they will go somewhere else,” said the seller.
Prices had risen by a minimum of €50/tonne ($71/tonne) compared with the end of December, sources agreed, with some producers still looking for an increase of €80/tonne.
Homopolymer injection prices were reported between €950-1,020/tonne FD (free delivered) NWE (northwest
“We are seeing very careful purchasing behaviour,” said a seller based in
The February propylene contract has been a major talking point in the PP market, and sources said they expect any increase in the new monomer contract to be passed on to the PP market.
Monomer was tight due to production issues, but there were also cutbacks at the cracker and refinery levels for commercial reasons.
The lack of propylene meant that PP output was also curtailed, leading large buyers no option but to accept increases targeted by their regular suppliers.
Some monomer sellers had mentioned price increases of as much as €90/tonne for February propylene. But the weakening in upstream crude oil and naphtha prices was likely to affect the new propylene contract price in February, sources said.
Brent crude oil rallied slightly on Monday morning, trading at $77.30/bbl, but it was still below the plus $80/bbl plus level trading when big hikes were discussed for February propylene contracts.
Naphtha was down on Monday, at $706-716/tonne CIF (cost insurance freight) NWE.
“We still expect an increase [for the February propylene contract]. But if crude doesn’t rally, expectations will be lower than before,” said a market observer.
The PP market was still waiting for new capacities in the
“We have been waiting for these imports for so long,” said one large buyer.
Sources said that new product from the Middle East and beyond was destined mainly for
But sources in Europe said they expect the minimum impact for
“A lot depends on how
PP producers in
($1 = €0.70)
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