Europe May polypropylene pricing still disputed

LONDON (ICIS)–European polypropylene (PP) players are at loggerheads over May pricing, sources said on Monday.

The dispute over pricing stems from varying approaches taken by sellers, as one major producer offers plus €20/tonne over April pricing, with others as high as plus €35-50/tonne.

“[For] PP plus €10/tonne,” said one large buyer that expected availability to be back into oversupply by June, in spite of the tightness of the current situation in some grades.

Several sellers said they were not entertaining such small increases.

“We aren’t able to sell at plus €40/tonne, as we intended,” said one, “but we are getting plus €25-30/tonne. We have limited availability.”

A tight upstream propylene situation had led to reduced PP at several sites in Europe, and the May propylene contract increased by €10/tonne, to €1,150/tonne FD (free delivered) NWE (northwest Europe). Sellers have seen the tightness in the current market as a means of increasing the spread between propylene and PP in May.

Not all buyers agreed that demand outstripped supply in May.

“There are no shortages, none at all,” said another buyer. “I have accepted increases of €10-15/tonne for my PP in May.”

Biaxially oriented PP grades were tight, even short, in parts of Europe in April, particularly in southern Italy, where LyondellBasell had declared force majeure because of propylene shortages linked to Versalis’s Brindisi cracker. This situation has now eased, according to buyers, and the cracker is now fully back on stream, but stocks remain low.

Net homopolymer injection prices at large accounts remained below €1,300/tonne FD NWE during April and so far in May, but spot prices have increased by around €30/tonne over the same period.

PP is used widely in the packaging, hygiene and household goods industries and in the automotive sector.