Polypropylene continues at record-high prices in Europe

20-Apr-11

European polypropylene (PP) buyers continue to pay record-high prices as relief from a relentless round of price increases fails to materialise, as per ICIS. The expected flood of imports from new production in the Middle East has still not arrived, and sources do not expect this situation to change in the short term. Supplies from the Middle East are not expected shortly because of plant shutdowns in the region: Rabigh Refining and Petrochemical (Petro Rabigh) plans to shut its 700,000 tpa PP at the end of April for approximately two months of maintenance. Egypt's Oriental Petrochemical Co (OPC) is running its 160,000 tpa PP unit at about 80% because of a lack of propylene supply from Libya. Net homopolymer injection prices are currently trading on either side of €1,400/ton (US$2000/ton) FD (free delivered) NWE (northwest Europe), recording an almost constant price rise from a low of €600/ton at the end of 2008. Pricing in Europe for April PP has been mixed, with producers taking a different approach to the market depending mainly on their stock position, but there has been no hint of a price reduction from European suppliers. The market awaits settlement of the May propylene contract price, which is expected to give some direction to the PP market. The April contract rose by €25/ton from March to €1210/ton FD NWE. A decrease in the propylene contract may not be seen despite easing availability, as crude and naphtha prices remain strong.