Chile PP prices to rise again in February on higher propylene costs

31 January 2011 23:25  [Source: ICIS news]

HOUSTON (ICIS)--Chile’s only polypropylene (PP) producer, Petroquim, is increasing prices again in February, reducing its production margins to facilitate buyer absorption of steep increases, a company source said on Monday.

Petroquim increased homopolymer prices in early January to a minimum of $1,670/tonne (€1,236/tonne) and raised them again in the second half of January to $1,720/tonne to keep up with the rising cost of feedstock propylene.

For February, the price for high-volume PP customers goes up to $1,790/tonne for homopolymers. Export prices were already at $1,770 during January and at $1,790/tonne effective 1 February.

The implementation of the increases in Chile contrasts sharply with those of other countries like the US and Mexico, where increases amounting to $330/tonne were applied all at once early in January, causing buyer disbelief and a retraction of demand.

Transformers in the US and Mexico have been buying minimal quantities while consuming their own inventories to avoid buying at the current high prices, considered by many to be temporary.

The gradual increases in Chile have been painful for most, but a lot easier to absorb than those in the US or Mexico, according to the sources.

($1 = €0.74)

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By: George Martin
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