Europe PP buyers show little concern over supply problems

27 February 2013 13:20  [Source: ICIS news]

LONDON (ICIS)--Polypropylene (PP) buyers in Europe are not showing much concern over availability, in spite of propylene supply issues, several said on Wednesday.

The status of LyondellBasell’s PP plants is not confirmed, but the company declared force majeure on propylene from its Munchsmunster, Germany, cracker on 21 February, and operations were reduced at its PP sites in Tarragona, Spain, and Brindisi, Italy, according to buyers, leading to some mild supply difficulties.

Several large PP buyers have said that while they have had some delays in deliveries of PP, particularly in the film sector, they have not had to stop production.

“We have had no real supply problems,” said one large buyer. “There seems to be tightness in the market but we have got all we need.”

A buyer in the construction sector said it was having “zero problems with supply”.

The market is on hold, waiting for the March propylene contract to settle.

“I think we will see a €30/tonne ($39/tonne) increase in [the] propylene [contract] for March and that will probably go on to PP,” said a third large buyer.

“They won’t be able to pass anything on to PP in March,” said one of the buyers. “The spread between propylene and PP is too wide.”

The February propylene contract settled up by €10/tonne, at €1,100/tonne FD (free delivered) NWE (northwest Europe). This is subject to discounts that are not disclosed.

PP homopolymer injection net prices from producers are said to be around €1,250/tonne FD NWE.

PP producers have been hinting they will be seeking increases for March PP pricing.

PP is used widely in packaging and household sectors and in the automotive industry.

($1 = €0.77)

By: Linda Naylor
+44 20 8652 3214

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