14 August 2013 12:56 [Source: ICIS news]
LONDON (ICIS)--Polypropylene (PP) prices in Europe are settling at an increase in line with monomer values at most accounts in August, sources said on Wednesday.
The August propylene monomer contract settled up by €50/tonne ($67/tonne), at €1,090/tonne FD (free delivered) NWE (northwest Europe), and sellers have been pushing hard to recover this hike, and sometimes more in certain cases.
“We are working on a pass-through of the feedstock,” said one large buyer, indicating that the increase from July to August would be €50/tonne.
“I have settled almost everything at monomer [up] or monomer plus €5/tonne,” said another, who added that it would not settle at monomer plus €20/tonne, or a €70/tonne increase in total, that one producer was targeting.
Suppliers said demand was good, but some players put this down to a level of stocking ahead of what might be an increase in September, as naphtha prices continued to increase, exerting upward pressure on the cracker.
On Wednesday morning, naphtha was trading at $908-910/tonne CIF (cost insurance freight) NWE (northwest Europe), up from a level of $882-884/tonne CIF NWE during the week that the August propylene contract settled.
Availability of PP has been tightened by production cutbacks, better-than-expected demand in recent weeks and limited imports. Some propylene issues have also led to reduction in output at some sites.
Buyers’ views of European demand differed, as news of stronger growth came out of Germany and France, while the eurozone came out of recession following a record 18 months of contraction.
“I can see it in the volumes,” said one buyer, while another struggled to see any improvement.
“It’s all very nervous. I am not seeing the level of confidence that you hear from the wider market,” it said.
Homopolymer injection spot prices are trading in the mid-to-high €1,200s/tonne FD NWE on a net basis.
PP is used widely in the packaging and household goods sectors and also in the automotive industry.
($1 = €0.75)
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