10 January 2013 22:31 [Source: ICIS news]
HOUSTON (ICIS)--US polypropylene (PP) producer Formosa Plastics announced on Thursday it will implement an additional 6 cent/lb ($132/tonne, €102/tonne) price increase on all grades of PP for mid-January, on top of a previously announced 12.5 cent/lb increase effective on 1 January.
The increase would be effective on all shipments made after 15 January, according to a copy of a customer letter obtained by ICIS.
If the price increases are implemented, PP prices by mid-January would be 18.5 cents/lb higher than the December price level.
"I was stunned," said one market participant, speaking of the price proposal.
The announcement comes on the heels of revised nominations from propylene producers, one of which increased its initial January nomination from 11.5 cents/lb to 14.5 cents/lb earlier this week.
The proposed increases come as spot propylene prices surged in the past few weeks following plant outages, including the unexpected shutdown of a propane dehydrogenation (PDH) plant in Texas in December. That unit was restarted this week.
PGP for January was offered at 72.75 cents/lb on Thursday and bid at 69 cents/lb.
US propylene contracts have not settled yet, and some PP market participants have said they do not expect the entire 14.5 cent/lb increase to be implemented.
US PP contract prices for December were at 69-71 cents/lb DEL (delivered) for homopolymer injection and raffia grade material, as assessed by ICIS.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa Plastics, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
($1 = €0.77)
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