04 January 2013 17:14 [Source: ICIS news]
HOUSTON (ICIS)--Mexico’s sole polypropylene (PP) producer Indelpro increased the price of all grades by 13 cents/lb ($287/tonne, €221/tonne) in January to offset a potentially large increase in US Gulf feedstock propylene contracts, a company source said on Friday.
Nominated increases for January propylene contracts in the US have been heard in the range of 11.50-13.00 cents/lb.
Settlement is yet to be reached in the US, but sellers appear to be confident the market is tight enough to support an outcome of at least 11 cents/lb premium over December values, an increase of nearly 20%.
The high nominations are attributed to reduced supply of propylene caused by an outage of the Petrologistics plant, the only on-purpose propylene plant in the US.
Demand has been absent this week because many market participants are not expected to return to their normal activities until Monday, 7 January.
Production is normal in Mexico, and there are no shortages of material for any grade.
The January increase will also affect exports, the source said.
Activity at the US border has been subdued this week, while most market participants seek greater price definition.
Prior to the January increase, the price of PP homopolymers in Mexico was in the range of $1,786-2,031/tonne FOT (free on truck), according to ICIS data.
($1 = €0.77)
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