Higher feedstock cost and increased demand continue to buoy polypropylene prices in Northwest Europe this week, with rises in contract prices exceeding the January feedstock propylene pass-through of plus Eur 20/mt (US$26/mt), as per Platts. Gross contract price settlements have converged at Eur 1265-1270/mt FD NWE for homo injection so far in January, up Eur 30/mt from December and a two-month high.
Several producers have secured increases of at least Eur 30/mt in their January contract prices. The upper end of the price hike range has eased to Eur 50-60/mt from around Eur 70-80/mt last week as converters resisted steep increases on lack of a significant rebound in the end-user market.
Suppliers attributed the higher offtake to some restocking and moderate pre buying in anticipation of a larger price increase in February. The market was well supplied, although some suppliers were heard to be reluctant to book February orders ahead of the monthly contract price settlement, expected before the end of the month. Many converters were reported to have accepted contract price hikes of Eur20-30/mt, arguing that increases beyond this range was not justified by the current demand.
Expectation is growing in the market that producers will push for a larger price increase in February to recoup rising costs and boost margins.