27 May 2010 16:49 [Source: ICIS news]
LONDON (ICIS news)--European polypropylene (PP) prices have reached the same level as their record high in August 2008, market sources said on Thursday.
PP prices were currently at €1,250/tonne ($1,524/tonne) FD (free delivered) NWE (northwest ?xml:namespace>
By the end of 2008, PP prices collapsed to a low of €600/tonne. The price fall at that time coincided with a drop in crude oil prices, from over $140/bbl in July 2008 to just below $40/bbl in December.
PP prices have risen by over 30% since January 2010, and buying sources said they were expecting some relief in the weeks to come, despite producers’ plans to target more price increases in June.
Availability of PP for June was tight as a result of restricted output at some sites in
“We will probably have to pay an increase in June,” said a major buyer. “But it shouldn’t be more than €20/tonne.”
PP producers were talking of increases of €25-50/tonne for June PP business, based on the current supply/demand situation.
“I will be aiming for a rollover,” said another buyer. “Propylene has rolled over. We have paid enough this year.”
However, a producer countered: “There is still an upward price momentum in the market. Buyers didn’t order enough for their contracts because they thought they would be able to buy imported spot product, and now we can’t supply more than their contracts and they are all complaining.”
The upward momentum in the European PP market was in sharp contrast to price movements in markets globally.
PP from the Middle East was offered at lower levels in most regions, including for delivery to
Offers of PP from the Middle East to
Sources’ opinions differed as to how far prices could fall. Bullish players argued that PP demand was still solid, and that high crude and naphtha prices – albeit lower than a month ago, but supported in
In support of a significant price fall during the second half of 2010, bearish sources pointed to concern over Europe’s sovereign debt crisis, the unexpected nature of the 2008 price crash and new production capacities in the Middle East and
PP producers in
($1 = €0.82)
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