22 November 2013 10:00 [Source: ICB]
US PP contract prices for November were at 77.50-79.50 cents/lb 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 lower by 1 cent/lb at 66.5 cents/lb for November.
The decrease is a little less than was initially expected. However, sources said it is not likely to impact demand, which was already very strong as buyers attempt to build inventory ahead of anticipated first-quarter price increases.
“There’s a bit of a buying frenzy right now,” said one distributor. “Everyone is saying, ‘We don’t want to have to play [in the first quarter] if we don’t have to. Let’s buy now and get ahead of this’.”
Expectations are mixed for December. Some market participants said they expect another few cents to come out of the price, while others say they expect prices will be flat through the end of the year.
Some buyers have said that even though they expect prices to drop again in December they will make the bulk of their purchases this month out of fear that supply will tighten in December.
One trader said supply is already starting to tighten now, with some producers saying they are sold out of material.
“There are cars out there, but they are not plentiful,” the trader said.
Major North American PP producers include LyondellBasell, ExxonMobil, INEOS, Total, Formosa Plastics, Braskem Americas, Pinnacle Polymers, Phillips 66 and Flint Hills Resources.
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