12 January 2012 21:12 [Source: ICIS news]
US PP contract prices for January were at 67-69 cents/lb ($1,477-1,521/tonne, €1,167-1,202/tonne) DEL (delivered) for homopolymer injection and raffia grade material, as assessed by ICIS.
Much of the PP market has a monomer-based contract that follows monthly polymer-grade propylene (PGP) costs. PGP settled flat at 56 cents/lb for January.
Market sources had been predicting a slight drop in January, based on softer spot prices in December and propylene inventories that were at a record 5.633m bbl in the week that ended 6 January.
One PP producer pinned the flat settlement on two factors–crude oil prices that have gone as high as $102/bbl and tensions in Iran.
Another market participant said prices could have gone either way, but were given some strength from higher energy prices.
"It just feels like the momentum shifted slightly from negative to more neutral," the source said. "It would have been nice to get more of a break, but I don't think a rollover is the worst thing that could have happened."
The hope, sources said, is that the flat settlement is a sign that PP prices will be more stable in 2012 than they were in 2011, which saw prices swing as high as $1.10/lb in May before sliding down in the third and fourth quarters.
Prices are expected to increase in February, sources said. One source predicted an increase of between 2-3 cents/lb for the month.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa, Braskem Americas, Pinnacle Polymers, ConocoPhillips and Flint Hills Resources.
($1 = €0.79)For more on PP visit ICIS chemical intelligence
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