Declining demand fails to pull down NWE spot PP prices from over 9-month highs

22-Mar-12

Spot polypropylene prices in Northwest Europe continued to hover at over nine-month highs this week despite the decline in demand, as per Platts. Buyers have adopted a wait and watch stance. Spot prices for homo injection grade were assessed at Eur1320-1325/mt (US$1746-1752/mt) FD NWE on Wednesday, unchanged from a week earlier, when they hit their highest since June 1, 2011 when they were at Eur1315-1320/mt. Buyers are getting increasingly reluctant to buy more supply as prices head toward record highs of Eur1385-1390/mt hit on April 27, 2011. Most buyers are "comfortable" with their current stock levels after replenishing in January and February, and hence are not in a rush to buy at these levels on worries of a potential repeat of 2011 when demand started to fall as prices peaked. Since crude is relatively stable and there are signals that they could ease up a bit, it is unlikely that the market will crash, and also unlikely that the market will see a significant upward movement.