14 March 2013 22:00 [Source: ICIS news]
US PP contract prices for March were at 84.00-87.00 cents/lb DEL (delivered) for homopolymer injection and raffia grade material for small-volume buyers, 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 lower at 73.00 cents/lb for March.
The decrease was less than had been initially expected, with some market participants anticipating a drop of as much as 10 cents/lb.
The March decrease essentially erases the 6 cent/lb increase in February, making prices steady at January levels. However, that has not been enough to spur demand, according to buyers and suppliers.
"Prices go up in January and up in February, and now they are coming down, and that just totally kills the whole dynamics of the business," said a producer. "Buyers are not buying any more than what they have to because they are sure [prices] are going to come back down."
Market participants have begun to speculate about another large drop in April, with some predicting another drop of around 6-7 cents/lb, while others are suggesting prices could drop by as much as 10 cents/lb.
Material is selling at a significant discount in the spot market, according to buyers. One buyer said it was able to purchase generic prime homopolymer PP at 68 cents/lb.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa Plastics, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
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