11 June 2013 10:17 [Source: ICIS news]
LONDON (ICIS)--INEOS has closed its polypropylene (PP) order book in Europe as demand outstrips supply, a company source said on Tuesday.
“We are closing order books not because of any problems, just strong demand,” said the source.
PP demand improved in May as players saw pricing at the bottom of the cycle, and strong offtake has continued into June.
European production has been cut back for several months in line with poor demand, so inventories with producers have been low. The upturn in May volumes tightened availability considerably.
PP is not yet settled for June but prices are rising. There is no consensus on the level of increase for the month, however.
“I expect to settle at the monomer [plus €15/tonne],” said one large buyer, and this sentiment was echoed by others.
Sellers are looking for more and talk of increases of €40/tonne.
Homopolymer injection spot prices are trading around €1,230-1,250/tonne FD (free delivered) NWE (northwest Europe), from a low of €1,120/tonne FD NWE in early May.
PP is used widely in packaging and the manufacture of household goods. It is also used in the automotive industry.
($1 = €0.75)
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