31 May 2011 07:06 [Source: ICIS news]
By Ong Sheau Ling
SINGAPORE (ICIS)--Spot polypropylene (PP) prices in the Gulf Cooperation Council (GCC) fell 2.6% after hitting a 10-month high on the back of softer crude futures and sluggish key China market, industry sources said on Tuesday.
The trend in likely to continue for a few more weeks, they added.
In GCC, PP raffia prices were discussed at $1,630-1,660/tonne (€1,141-1,162/tonne) ?xml:namespace>
Two Saudi producers offered June raffia cargoes at $1,660/tonne DEL Dubai, and a third Saudi maker offered at $1,650/tonne DEL Dubai.
However, bids were received at $1,620-1,630/tonne DEL Dubai.
Saudi makers had to reduce offers for fresh shipments as they acknowledged the fall in crude futures have weighed on buying sentiment, and demand in the key
Crude futures slipped about $10/bbl in mid May and subsequently, futures have been hovering at close to $100/bbl.
“Demand here is unchanged from last month, but converters are expecting prices to fall further. That is why everyone is holding back, waiting for offers to be revised downwards again,” a key converter based in
“It looks like converters are going to buy even smaller volumes, despite stable demand. Sales are going to be harder in this downtrend market,” a Dubai-based trader said.
Nevertheless, most players are uncertain about the market outlook, as crude futures remain volatile, and it is unclear when the demand in
Also, regional supply condition will change in July, as the restart of two major PP facilities based in GCC will ease the existing tight market.
“There is a lower limit to how PP prices will fall, because the spread between the [feedstock] propylene and PP prices has been very narrow,” a Saudi PP producer said.
“We can’t foretell what prices will be next month, but at least for June cargoes, we can see that upside in prices has halted,” a GCC PP maker said.
“Q3 demand in GCC should remain healthy before Ramadan [Muslim fasting month] kicks in from 1 August. So, the conditions of the PP availability and the upstream prices will determine the price trend,” another PP producer said.
($1 = €0.70)
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