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European sellers pass propylene hikes on PP deals

by ChemOrbis Editorial Team -
  • 17/01/2017 (10:26)
In Europe, some PP deals started to be concluded with increases matching propylene hikes in line with the earlier expectations. Some suppliers stepped back from their initial hike targets and conceded to €45/ton increases in the end. Players attributed this to the slow buying interest on comfortable stocks on the buyers’ side.

A converter in France reported purchasing from their regular suppliers who were initially seeking larger hikes, paying €45/ton increases from December. The buyer commented, “We ordered smaller volumes than usual as we did some pre-buying in December.”

Similarly, a different buyer in Italy reported to have purchased small volumes only to keep business relationships with their regular suppliers alive with €45/ton hikes despite West European suppliers’ initial hike attempts of €60/ton. “We are holding stocks that will be sufficient for our production needs until March,” added the buyer.

Meanwhile, a distributor from Germany reported to have sold some quantities with smaller hikes of €20/ton from their existing stocks, commenting, “Demand is not strong, so we only secured small fresh quotas to sell for this month.”

However, some sellers are still insisting on larger hikes than that of propylene while some European suppliers have begun to seek additional hikes, blaming tightening supplies.

A West European producer announcing official contract offers with €70/ton hikes reported that they are able to give only €10-20/ton discounts on January PP prices due to their tight availability following a planned maintenance shutdown. A producer source said, “We expect the uptrend to persist in February and March as well.”

A distributor from another West European producer said that his supplier is now asking for additional €10-20/ton hikes on top of the initial increases they applied, pointing to their short supplies. Still, the distributor is planning to push to pay lower prices.

In Italy, prices are reported at €1050-1150/ton for homo-PP and at €1110-1220/ton for PPBC on local terms, while in Northwest Europe homo-PP prices stand at €1065-1170/ton and PPBC prices at €1120-1220/ton on FD NWE, 60 days.
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