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Initial June PP sell ideas from sellers emerge in Europe

  • 01/06/2017 (04:04)
Early sell ideas for June have emerged in the European PP market, moving in lockstep with the lower settlement of propylene, which was fully agreed with €40/ton decreases from May. The return of the crackers from maintenance shutdowns had created a downward pressure on the propylene market, which kept PP activities limited on the buyers’ side due to their expectations about seeing decreases in June. Accordingly, sellers have started to voice lower sell ideas in the distribution market this week.

A distributor of a West European producer in Italy reported, “We are mulling over offering with decreases in line with propylene contracts. However, we expect even larger drops from some traders.”

Affirming this comment, a distributor of a Middle Eastern producer reported his June sell ideas with decreases of up to €70/ton, saying, “We think that our supplier will give larger discounts considering their high price levels in May in order to match the market level.”

Meanwhile, a compounder said, “There were aggressive offers from traders especially for non-European origins. However, buyers prefer not to source imported material due to the unfavorable delivery times amid bearish expectations. Plus, our stocks are low.”

A buyer pointed to the poor sales performance of sellers due to the bearish June outlook and noted, “We limited our purchases to a hand to mouth basis given our comfortable stock levels. We expect new decreases due to the sales pressure on the side of sellers and we are confident about finding lower prices in the local market.”
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