27 September 2012 18:06 [Source: ICIS news]
Prices are 62.50-64.50 cents/lb DEL (delivered) ($1,378-1,422/tonne, €1,375-1,109/tonne) for homopolymer injection and raffia grade material, an increase of 1 cent/lb, as assessed by ICIS.
Much of the PP market has a monomer-based contract that follows the monthly polymer-grade propylene (PGP) price, which settled higher at 51.50 cents/lb for September.
The increase came after an extended propylene contract negotiation, which was delayed because of divergent views on price direction among buyers and sellers.
Despite the increase in contract prices, spot prices are still as much as 4 cents/lb higher than contract prices, based on tightness in the market, sources said.
"It's a dry hole – there is just not enough to go around," said a trader, speaking of spot material. "And the price is really out of whack with where contracts are."
US producer Pinnacle Polymers declared force majeure in August following Hurricane Isaac, and LyondellBasell declared force majeure on 13 September after a mechanical failure at one of its units.
The Pinnacle Polymers force majeure remains in effect, but the status of the LyondellBasell force majeure is not clear.
Other production problems have also been heard in the market, sources said.
One market participant said the production problems are fairly normal occurrences, and should not be having a significant effect on the market. However, the source said producer inventory levels remain below the 30-day mark, so any lost production causes tightness.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa Plastics, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
($1 = €0.78)
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