The March hike, when combined with increases in January and February, raises PP contract prices by 39% this year.
The increase raises PP prices on all five grades assessed by ICIS to 70-75 cents/lb.
PP has followed feedstock polymer-grade propylene (PGP) in each of the past eight months, returning to a formula – as goes propylene so goes PP - that dominated that market until 2015, when propylene prices began plunging.
Producers expanded their margins during 2015 and into 2016 until a surge of imports prompted a return to the as-goes-propylene-so-goes-PP formula.
In the three of the past eight months, the monthly propylene contract dropped. Polymer-grade propylene (PGP) has been rising this year because of falling inventories, though in recently weeks supply has been rising.
Major producers in the US include Braskem, ExxonMobil, Flint Hills Resources, Formosa Plastics, Indelpro, INEOS, LyondellBasell, Phillips 66, Pinnacle Polymers, Sasol and Total Petrochemicals.
Photo: PP is used to make bottle caps like the ones shown above. Source: Mood Board/REX/Shutterstock