Updated to mid-November 2009
Asian market review by Chow Bee Lin, ICIS pricing
Asian average weekly prices of injection and yarn grade polypropylene (PP), block copolymer, imported isotactic polypropylene (IPP) and biaxially oriented polypropylene (BOPP) prices fell by 1.7-3.9% from $1,120-1,280/tonne CFR (cost and freight) China/SE Asia (southeast Asia) in mid-August to $1,060-1,220/tonne CFR China/SE Asia in mid-November.
Prices fell through most of September as importers retreated to the sidelines, in fear that new capacities in China, India and the Middle East would weigh down on prices.
European market review by Linda Naylor, ICIS pricing
Production of PP in Europe had been cut back significantly, and while prices drifted down, there was no significant price movement and the market was considered to be in a fine supply/demand balance by mid-November.
Propylene was fairly tight as crackers had been cut back mainly to curtail availability of ethylene, and there was still no oversupply of propylene. The new Middle Eastern capacities had not yet made the splash that many observers thought they would by the end of 2009 and many were now expecting a strong start to 2010 with no real influence from new capacities to be felt for some time.
Asian prices had not increased to the extent that some polyethylene (PE) prices had and there was less opportunity for PP sellers to sell abroad at time of writing.
US market review by David Barry, ICIS pricing
PP prices in the US peaked in September with bulk prices for small-volume consumers topping out at around 70-72 cents/lb on a delivered basis. Prices tumbled by 10 cents/lb the following month, and buyers went into hiding, expecting a similar plunge in November. However, rising crude oil and gasoline prices turned around the upstream propylene markets, and PP prices were expected to see a small rise in November of 2-3 cents/lb.
Producers were forecasting an uptick in domestic sales in November based mainly on large end-users returning to the market after working off inventories in September and October. Export activity was very quiet, even into Mexico, because the tight supply and high value of US propylene feedstock made PP from the US unattractive in foreign markets.
The outlook was uncertain, but PP prices in the US have decoupled from resin supply/demand fundamentals and moving forward will depend more on upstream factors such a propylene supply and alkylation values, sources said.
Latin American market review by George Martin, ICIS pricing
The August-November period showed PP prices in Latin America moving up at a steady rate in most countries. Venezuela, which runs a closed commerce system with a fixed dollar exchange, was the exception.
The recovery was more pronounced in Brazil, where prices were noticeably higher than those of most other countries in the region, thanks in part to the PIS/Cofins tax that is built into their prices and adds about 9.5% to all values.
In Argentina, the rebound was steady but not as fast as Brazil’s. PP prices in Argentina were more compatible with those of Chile, Colombia and Mexico.
Chile had the lowest prices in the region due to intense competition among regional and US Gulf producers. Asian product was seen as too expensive.
PP prices increased more quickly in Colombia than in any other country except Brazil. Revaluation of the Colombian currency versus the US dollar was also a factor that helped prices rise faster.
PP prices in Mexico followed the path of US imports, rising steadily during the period.
Venezuelan PP prices have been steady throughout 2009 due to a fixed US dollar exchange and long inventories of high-priced material in the hands of the local producer. Venezuelan transformers continue to pay the highest prices in the continent.
The above-described scenarios can be applied to all homopolymer grades. The price increases on PP were related to higher feedstock costs rather than gains on demand.
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Polypropylene
Uses and Outlook
Polypropylene's (PP) intrinsic properties of high stiffness, good tensile strength and inertness toward acids, alkalis and solvents, plus its cost advantage over other thermoplastic polymers, has secured its position in a wide range of consumer and industrial products, manufactured by several high-volume forming methods. In addition, its low density and cost advantage over other thermoplastic polymers make it suitable for applications that are weight and cost conscious.
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Polypropylene
Process Technologies
The first commercial production of polypropylene was in the 1950s following the discovery of Ziegler-Natta catalysts. It was produced initially in a slurry process where propylene is reacted in the presence of a catalyst in solvent to produce a mixture of crystalline and amorphous polymer. The disadvantage of this route was that the catalyst had to be treated with alcohol to deactivate and extract it, while unwanted atactic polymer had to be extracted and removed.
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