20 November 2012 21:28 [Source: ICIS news]
US PP contract prices for November were at 68.00-70.00 cents/lb 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 the monthly polymer grade propylene (PGP) cost. PGP prices settled higher at 57.00 cents/lb for November.
The increase was somewhat larger than was expected, according to some market participants, who said they saw no fundamental reason for the higher prices, based on crude oil prices below $90/bbl and strong propylene inventories.
The higher prices are expected to curb buyers' appetite for material, according to one trader, who believes already weak domestic demand will be even weaker for the balance of the month.
"It's going to be a tough month," the trader said.
Some market participants have said they expect prices to fall right back down in December, which is causing some buyers to hold out on purchases until then.
One buyer said if there was a price drop in December, it probably would be no more than 1.5-2 cents/lb. However, the buyer is not convinced that there will be any price drop, because material remains somewhat tight.
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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