Europe PP players mull November talks amid €90/ton fall in Nov propylene

05-Nov-14

Polypropylene (PP) buyers and sellers in Europe, on news of the €90/ton drop in the November propylene contract, are considering options ahead of serious discussions, as per ICIS. Buyers were beginning to get ideas of producers’ targets, but little business has been settled, they said. “One of them [producers] came with a rollover for November,” said one buyer, “but I will be disappointed if I don’t get 90 [euros down].” “I have been offered minus €60/ton,” said another buyer. Several buyers said they were concerned over competitors with monomer links getting the full minus €90/ton, while producers were aiming to keep a portion of the price drop in November freely-negotiated business. The supply/demand balance in the PP market is good, with no oversupply in evidence, as importers gain better netbacks in other regions, and European producers take advantage of the strong dollar to export volumes. After a good September that was the strongest month in the whole year, October seems to be looking good. "October is the best month this year,” said another producer. “Why would we give away the whole monomer?” Buyers are fairly confident of getting more than the price decreases that are on offer for November, and prepare to wait before settling prices this month. All PP players are watching how demand pans out in November, to get an indication of how much prices could decrease by this month.