Europe polypropylene buyers resist September price increases

03 September 2010 11:07  [Source: ICIS news]

PP buyers resist price increasesLONDON (ICIS)--Polypropylene (PP) buyers in Europe are strongly resisting all talk of price increases in September, with several having reported rollover pricing from August, sources said on Friday.

“They are making absolutely fantastic margins,” said one frustrated buyer, complaining about the months of price increases that producers have imposed on the market this year.

Europe has become a cash cow. I really bear them a grudge.”

Some PP producers are still targeting price increases for September, in spite of the €10/tonne ($13/tonne) drop in the September propylene monomer price.

Buyers, however, are keen to reject such advances.

“There will be no increases,” said another buyer. “They might be able to hold on to the €10/tonne that they have saved in the monomer, but they won’t get prices up.”

An undertone of frustration tinged with anger ran throughout the market.

“I can get what I need from importers and resellers this month. I am simply not going to buy from the Europeans in September if they keep harping on about increases,” said a third buyer.

The PP market has been left with limited availability following some production issues and a programme of strict inventory control.

Buyers have also kept low inventories in anticipation of an expected influx of imported volumes from new plants in the Middle East and Asia.

But this material has proved very slow to appear, and there was still limited imported availability in the European PP market.

Homopolymer injection prices were now trading at €1,190-1,200/tonne FD (free delivered) NWE (northwest Europe) on a net basis.

“We expect a firm, steady September,” said a producer, “and we don’t exclude price increases. Product is not long and demand is good.”

PP producers in Europe include LyondellBasell, Borealis, SABIC, Total Petrochemicals, Dow Chemical, Repsol, INEOS Olefins and Polymers, Polychim and Domo.

($1 = €0.78)

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By: Linda Naylor
+44 20 8652 3214



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