NPE ’12: US PP market expecting decrease in near term

03 April 2012 00:15  [Source: ICIS news]

ORLANDO, Florida (ICIS)--The US polypropylene (PP) market is ripe for a decrease after prices have risen by nearly 22 cents/lb ($485/tonne, €364/tonne) since the beginning of the year, but prices are expected to fall much more gradually than they rose, market participants said on Monday.

Market sources are split on whether the decrease will start in April or May, but the price drop is expected to continue through June and July, sources said, speaking on the sidelines of the National Plastics Exposition (NPE) at Orlando.

Prices for injection homopolymer PP are 88.50-90.50 cents/lb.

"We see small stair steps down through June and July," said Eric Williams, business unit manager for distribution at A Schulman.

One market participant who generally agreed prices should come down more slowly than they went up, said the market has been so volatile, it could just as easily go the other way.

"Every time someone mentions this gradual decline, I start to think prices are going to fall off a cliff," the source said.

Recent spikes in spot polymer-grade-propylene prices had some sources suggesting the price could possibly increase slightly in April. However, many sources predicted the prices would stay flat or possibly decrease by 2-3 cents/lb during the month.

The market volatility is expected to continue in the long term, as PP prices continue to fluctuate with the propylene market, sources said.

"We see continued volatility," Williams said. "Inconsistency is the new consistency."

The four-day NPE is sponsored by the Society of the Plastics Industry (SPI) and runs through Thursday.

($1= €0.75)

By: Michelle Klump
+1 713 525 2653

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