31 July 2013 16:56 [Source: ICIS news]
LONDON (ICIS)--Polypropylene (PP) producers are targeting higher prices in August in Europe following the €50/tonne ($67/tonne) increase in the August propylene monomer contract earlier this week, buyers and sellers said on Wednesday.
“We will insist on getting the €50/tonne [propylene increase], and our intention is to go for more,” said one producer.
“They [producers] will probably try to get more than €50/tonne [up],” said a buyer, “but I won’t be buying at higher than plus-€50/tonne, that’s for sure.”
Not all producers had made their intentions clear for the month of August and were still considering their position following Monday’s initial settlement of the August upstream propylene contract. The contract has now been fully confirmed.
PP spot prices have increased in recent days, but there has been no panic buying ahead of what could be an increase in August.
Net spot prices were said to be trading in the mid-€1,200s/tonne FD (free delivered) NWE (northwest Europe), but some sellers were targeting price levels above €1,300/tonne FD NWE on a net basis.
It is too early to tell where PP prices will land for August, and many buyers said they were not in any hurry to settle the month. Southern European holidays are beginning in the coming days, and production will be cut back fairly heavily at many sites.
Product availability is not long, however, and producers are confident of achieving success with their targets.
“Demand isn’t really there,” said another buyer, “but it has tightened up a bit. I will have to pay more for replacement volumes.”
Discussions were expected to begin in earnest next week, but some buyers had made it clear they would not settle before they came back from holiday in mid-August.
PP is used widely in the packaging and household goods sectors. It is also used in the automotive industry.
($1 = €0.75)
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