Europe PP tightness leads to sporadic higher spot sales

LONDON (ICIS)–Polypropylene (PP) tightness in some sectors is forcing some buyers to pay higher prices for supplementary purchases in April, sources said on Friday.

Some biaxially-oriented polypropylene (BOPP) film buyers in Italy were struggling to cover all the material they needed – due to LyondellBasell’s availability issues, linked to the unplanned outage of the Brindisi cracker – and had to pay more. Most buyers eschewed paying increases for extra volumes at the end of the month, however.

The occasional buyer acknowledged that they had had to pay higher prices for supplementary volumes but said that prices remained below €1,300/tonne FD (free delivered) NWE (northwest Europe) on a net basis.

“I have had to pay a higher price this week to get the volumes I need,” admitted one buyer.

LyondellBasell declared force majeure on some film grades from its Brindisi operation in Italy because of problems at the Versalis cracker at the site earlier this month, and while the cracker is now back up, PP availability remains tight.

Other production issues, limited cracker output, fewer imports and better-than-expected demand are expected to maintain tension in the PP market.

Not all PP buyers are faced with a tight situation, however.

“There is enough polymer around,” said another buyer. “If I need an extra load, I [can] get it and the price is not changing.”

“Demand is reasonable but nothing exciting,” he added.

The focus of the market is now the May propylene contract price. PP prices would be expected to follow any movement in the monomer contract. Many sources expect a modest increase in the new contract, but few are concerned about being able to get hold of enough polymer in May.

PP homopolymer injection net prices are trading around €1,260-1,280/tonne FD NWE.