05 May 2010 23:08 [Source: ICIS news]
By Ivan Lerner
NEW YORK (ICIS news)--Polypropylene (PP) prices in the US and Europe would continue to decline in the long term as operating issues are resolved and imports increase, a consultant said on Wednesday.
The PP pricing trend “will clearly be downward”, said Robert Bauman, director of Polymer Consulting International (PCI).
“Demand growth will continue to be high in developing regions, and demand recovery will occur in developed countries as economies improve,” he added
But extra capacity would be an issue, exerting “strong downward pressure on prices,” he said. “The only question is when - one month, three months, six months?”
Global demand was being driven by Latin America, ?xml:namespace>
A key factor for US and European PP producers would be the ability to maintain high operating rates by exporting surplus capacity, said Bauman.
As the economies of developed countries improved, the severe drop in demand caused by the recession may lead to a short-term burst of demand, with growth rates reaching 5-10% for one to two years, followed by a return to the pre-recession trend of 2-4%, according to the consultant.
Middle Eastern PP has had some issues regarding the quality of its PP, but those concerns “are temporary depending upon the country,” said Bauman. “Every new plant in the
Not being a low-cost producer,
With all the excess PP capacity coming on globally, “
“If this occurs, exports from
The latest spot prices for US-based PP were 64-65 cents/lb ($1,411-1,433/tonne), and European PP was selling for €1,200-1,230/tonne, ($924-947/tonne) according to ICIS pricing.
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