30 November 2011 21:57 [Source: ICIS news]
Correction: In the ICIS story headlined “US PP producers nominate December increase” dated 30 November 2011, please read in the first paragraph … will increase prices in December … instead of … in November …. A corrected story follows.
HOUSTON (ICIS)--Two US polypropylene (PP) producers have announced they will increase prices in December, according to customer letters obtained by ICIS on Wednesday.
Braskem announced it would increase the price of all grades of PP by 3 cents/lb ($66/tonne, €50/tonne) on Thursday, according to a letter sent to customers.
INEOS announced it would raise PP prices to match polymer-grade propylene (PGP) price hikes in December, according to a letter sent to customers.
INEOS also said it would require customers to place orders by 9 December, adding that it would only manufacture enough PP to satisfy forecasted needs.
Much of the PP market has a monomer-based contract that follows the monthly PGP cost. The letters indicate that even those customers who do not follow monomer-plus pricing would be subject to an increase.
But while one propylene producer was heard last week to have nominated a 3 cent/lb increase for December, most PP sources said they believe prices will settle flat for the month.
"We do not anticipate PGP or PP going up in December, based on the large C3 inventories," said one buyer.
The buyer was referring to US propylene inventories, which rose by 6% last week to 4.359m bbl - the highest figure since February 2006, according to the Energy Information Administration.
Sources said they did expect PP prices to rise by the first quarter of 2011.
US PP contract prices for November were at 69-71 cents/lb DEL (delivered) for homopolymer injection and raffia grade material, as assessed by ICIS.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa, Braskem Americas, Pinnacle Polymers, ConocoPhillips and Flint Hills Resources.
($1 = €0.75)For more on PP visit ICIS chemical intelligence
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