31 May 2013 20:50 [Source: ICIS news]
HOUSTON (ICIS)--US polypropylene (PP) producer Pinnacle Polymers announced a 2 cent/lb ($44/tonne, €34/tonne) price increase for all grades of PP effective 1 June, sources said on Friday.
The proposed increase is in addition to any increase in the price of polymer-grade propylene (PGP) contract prices in June, according to a copy of a 29 May customer letter obtained by ICIS.
Much of the PP market has a monomer-based contract that follows the monthly PGP cost. In recent years, there has been a set margin for PP, with PP prices changing according to any fluctuation in the price of PGP. Pinnacle Polymers' announcement represents an effort by the company to increase the base margin, sources said.
Market participants were surprised by the announcement, particularly after PP producers implemented an extra 1 cent/lb margin boost for most contracts in January.
Sources said it is typically difficult for individual producers to achieve such an increase if it is not part of a larger market-wide move.
US PP contract prices for May were at 73-76 cents/lb DEL (delivered) for homopolymer injection and raffia grade material, as assessed by ICIS.
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