Europe PP buyers grab lower prices in September

07 September 2011 11:34  [Source: ICIS news]

Polypropylene (PP) buyers in Europe are pushing producers hard to get a share of the €37/tonne ($51/tonne) drop in the September propylene contract price, and several say they have achieved lower pricesLONDON (ICIS)--Polypropylene (PP) buyers in Europe are pushing producers hard to get a share of the €37/tonne ($51/tonne) drop in the September propylene contract price, and several say they have achieved lower prices, sources said on Wednesday.

“Discussions are still open for September,” said a major PP producer, “but we are facing pressure to drop prices.”

PP buyers built up stock in July and August. Many have returned from holiday but have not been faced with the higher prices that producers had predicted for September.

Order books are not as healthy as they were, say some buyers.

“We have an order book of only 15 days,” said one.

“Demand is limited,” said a PP producer. “Our clients are comfortable. They have stock.”

Most buyers saw minus €20/tonne as the starting point of September PP pricing discussions. However, some already report that they have been conceded the full €37/tonne drop that producers gained in the propylene contract price, and not only those whose prices are linked to propylene.

The propylene contract now stands at €1,078/tonne FD (free delivered) NWE (northwest Europe), down by €37/tonne from its August level. This price is subject to discounts.

Net homopolymer injection PP prices are heard barely above €1,100/tonne FD NWE in extreme cases, with most commodity business done in the mid-to-high €1,100s/tonne FD NWE. Specialty products move at much higher levels, and here decreases of €20/tonne are now seen as the norm rather than the exception.

Demand remains a major concern for European players in September, as fears over the continent’s economy grow daily.

PP September pricing is not expected to be fully settled until the end of this week or the beginning of next, most sources said, but price easing is now becoming increasingly evident.

PP is used widely in the packaging and automotive sectors.

($1 = €0.72)

For more on PP visit ICIS chemical intelligence


By: Linda Naylor
+44 20 8652 3214



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