LONDON (ICIS)--Polypropylene (PP) spot prices have drifted down this week as offers of imports are made to Europe for end-May/June arrival, sources said on Thursday.
Monthly pricing discussions settled at a hefty increase for March, with prices increasing by a good €60-80/tonne over February- more than the €50/tonne hike in the March propylene contract.
Some PP grades were tight but for April, many buyers expect to be buying less, they said, as they had built up stocks ahead of the ongoing planned cracker closure period that was also curtailing some PP output.
April propylene is expected to remain tight, however, with one major PP producer expecting to have to cut back further on PP production for lack of monomer.
“April will see the peak of the turnarounds,” said a producer.
Europe has seen few imports so far this year, but this week some workable numbers have appeared.
Some sources have said offers of $1,200/tonne CFR (cost and freight) of South Korean homopolymer have been made, with copolymer offered at $1,260/tonne CFR and above.
Such a level would lead to DDP (delivered duty paid) levels of around €1,150/tonne, and while some sources have said this is now current at the bottom end of the market, it was considered too low by many.
"We still see prices of €1,200/tonne,” said a trader, “and this week we have sold at 1,220 [€/tonne].”
A producer agreed wholeheartedly:
“This is a flabbergasting number when seen in the light of what we expect for April,” it said.
PP sellers were expected to be looking for more margin improvement in April, following the settlement of the April propylene contract at an increase of €15/tonne, only if because they had sought margin improvement for many months in the recent past.
April PP discussions are not yet seriously under way.
PP is used in packaging, the manufacture of household goods, and also in the automotive industry.