27 December 2011 04:55 [Source: ICIS news]
By Chow Bee Lin and Belle Huo
No capacity additions in the Chinese domestic PP industry are expected next year. However, the start-up of Saudi Polymers’ 400,000 tonne/year PP plant in
The imminent start-up of the Saudi Polymers plant is expected to drive prices in
More cargoes of homopolymer-grade PP are expected to be exported from ASEAN countries such as
In addition, block copolymer PP from
Therefore, the expected increase in supply to
Any price declines in
With feedstock propylene selling at an average of $1,203/tonne (€926/tonne) CFR (cost and freight) NE (northeast) Asia in the week ended 23 December, regional producers have to price the benchmark PP yarn grade at a minimum of $1,350/tonne CFR China just to cover their cash costs.
PP producers need a propylene-to-PP price spread of at least $150/tonne to keep their plants running, but the spread was less than $100/tonne last weak because of weak downstream demand.
The benchmark PP injection and yarn grades were sold at an average of $1,275/tonne CFR China last week, according to data from ICIS.
Some PP producers in
The production cuts in Asia and restocking activities are likely to stem the declines in
Most PP end-users and traders have been keeping their inventories low this year, as a result of
“2011 is a year of destocking in the PP sector, both locally and globally,” an Indian PP producer said.
($1 = €0.77)
Additional reporting by Amy Yu, Angie Li, Lizzie Yu, Dong Yu Ling
For more information on PP, visit ICIS chemical intelligence
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