25 July 2013 21:10 [Source: ICIS news]
HOUSTON (ICIS)--US polypropylene (PP) contracts for July settled mostly flat, despite efforts by some producers to expand margins during the month, sources said on Thursday.
US PP contract prices for July were at 76-78 cents/lb ($1,675-1,720/tonne, €1,273-1,307/tonne) DEL (delivered) for homopolymer-injection- and raffia-grade material for medium- to small-volume buyers as assessed by ICIS.
Much of the PP market has a monomer-based contract that follows the monthly PGP price, which settled flat at 65.00 cents/lb for July.
However, the July PP pricing scenario was confused by efforts among some producers to implement an additional 2 cent/lb margin bump for PP.
While some smaller buyers who buy from distributors, rather than directly from producers, said they have seen some of the additional increase be implemented, most sources agreed those situations were more on a case-by-case basis rather than a market-wide move.
"Pricing is all over the board," said one distributor, who said different producers have pushed for the increase, while others have not.
Other producers have announced similar plans to attempt to push through a 2 cent/lb margin increase in August. Sources said they see these announcements as more of an effort by producers to alert buyers to expect an increase when contract talks begin at the end of the year.
"This whole idea of increasing margins over monomer in the middle of the year is wishful thinking," said one market participant. "As they negotiate contracts at the end of the year, [producers] may be able to push an increase through at that time."
Producers have been able to push through increases in the spot market, sources said, adding that in some cases even wide-spec material is more expensive than prime contract material. Those increases have been based on tight supply.
However, market participants said only those customers most desperate for material are willing to pay those prices. Most are willing to wait in the belief that spot prices will eventually come down, sources said.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa Plastics, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
($1 = €0.76)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections