ICIS raised its PP contract assessments by 1 cent/lb ($22/tonne), tracking similar movement in the propylene contract.
US PP contracts are generally formula based and are set by polymer grade propylene (PGP) contract values plus an adder.
Sellers have been seeking a 3 cent/lb margin expansion on top of their existing contracts. ICIS implemented a cumulative margin expansion of 1 cent/lb over the months of September and October but did not apply any additional margin expansion for November.
Market feedback suggests that margin expansion proposals have been meeting increased resistance in the face of ongoing increases in propylene prices as the PGP plus pricing mechanism is opening arbitrage windows between other global regions and the US.
So far, no major volumes of imports have been heard arriving in the US, largely because offers from overseas producers have not been found competitive after taking customs duties and inland transportation costs into consideration.
ICIS assessed November contracts for homopolymer PP injection at 68-72 cents/lb delivered in bulk US while contracts block copolymer PP were assessed at 69-73 cents/lb with the same terms.
Major PP producers in the US include ExxonMobil, Chevron Phillips Chemical, LyondellBasell and INEOS.
Image above: Plastic products like these are often made of PP. Photo by Al Greenwood