13 January 2011 12:05 [Source: ICIS news]
LONDON (ICIS)--European polypropylene (PP) prices are moving close to record highs in January as producers force upstream increases on their customers, market sources said on Thursday.
“We are discussing an increase of €90-100/tonne ($118-132/tonne) on top of December,” said one buyer.
The January propylene contract price rose by €110/tonne to €1,070/tonne FD (free delivered) NWE (northwest Europe), and producers were targeting increases for PP that would cover this rise.
One major producer said that it was rejecting increases below the full propylene hike of €110/tonne.
“All our business is at plus €110/tonne, and if buyers don’t want it at that, we can sell it next month for €50/tonne more,” said a company source.
Block copolymer net prices were now at €1,300-1,330/tonne FD NWE on a net basis. Levels had been at €1,280-1,320/tonne FD NWE in July 2010, and at €1,340-1,350/tonne in August 2008, when Brent crude oil was at a record high of $147/bbl.
Homopolymer PP prices were also touching former highs and producers talked of more increases for February.
“This will affect demand at the end of the day,” said another buyer. “I am limiting the amount I buy before I am sure I can get it back from my markets.”
PP prices had risen by 25% in 2010, with homopolymer injection gross prices beginning the year at €1,050-1,060/tonne, and ending it at €1,315-1,325/tonne FD, and credit issues were becoming an issue at some accounts.
PP is a versatile plastic used in the manufacture of carpets, household goods and cars.
($1 = €0.76)
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