Europe PP spot prices drift as arbitrage window opens to Europe
Linda Naylor
30-Mar-2017
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.
Global News + ICIS Chemical Business (ICB)
See the full picture, with unlimited access to ICIS chemicals news across all markets and regions, plus ICB, the industry-leading magazine for the chemicals industry.
Contact us
Partnering with ICIS unlocks a vision of a future you can trust and achieve. We leverage our unrivalled network of industry experts to deliver a comprehensive market view based on independent and reliable data, insight and analytics.
Contact us to learn how we can support you as you transact today and plan for tomorrow.