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European PP market remains firm, propylene softens

by ChemOrbis Editorial Team -
  • 21/09/2016 (17:31)
Increases are continuing to pass on September PP deals in Europe. October expectations are yet to gain clarity while some players considered further gains to be possible given reports of reduced supply for PP. In addition, spot propylene prices had held firm until recently on the back of short availability, but this situation appears to have changed this week.

In France, a distributor concluded some deals with increases of €20-30/ton from August at €1080-1100/ton for homo-PP injection and at €1150-1200/ton for PP block copolymer injection on an FD, 45 days deferred payment basis. “Demand isn’t strong, but our West European supplier is firm on their prices. The overall PP availability isn’t ample while we have sufficient stocks to meet our customers’ requirements,” he noted.

A converter bought West European material at €1000-1020/ton for homo-PP injection and at €1050-1070/ton for PP block copolymer injection FD, 60 days. The buyer commented, “Our suppliers were initially targeting hikes of €50-60/ton, but we managed to close our deals paying smaller increases of €20/ton in line with the propylene settlements. We think that producers might seek to raise their prices in October citing reduced supply. However, we haven’t observed any availability issues considering that many distributors are still holding high stocks.”

A packaging producer in Germany settled his September PP contracts with increases of €20/ton after his suppliers initially asked for slightly larger hikes of up to €30/ton. According to the buyer, demand is good while supply is limited for the moment so PP prices might gain further ground in October.

Early October expectations called for a firming trend in the PP market, but spot propylene prices on an FD NWE basis have registered a notable decrease of over €50/ton week over week due to a number of PP shutdowns in the region. However, spot naphtha prices are still standing above early September levels despite fluctuating crude prices.
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