Polypropylene market to remain tight through H1 Sep in USA

12-Aug-10

Driven by strong demand and inventory management, polypropylene markets in USA are faced with tight supplies. The market is expected to remain so through the first half of September and possibly longer, as per Platts. The increase in demand stemmed from the expectations of a decline in July pricing due to which inventory levels were low with buyers. Prices, however, did not fall, creating a frenzy in the market. That associated increased demand ultimately allowed sellers to hike August contracts by 2 cents/lb. While most participants agreed that the supply/demand balance was unlikely to correct itself in the next 30-45 days, some sources said that demand could hold longer. One seller said that demand is beginning to increase, with request for large volumes from a converter, deal for which has not been completed. In exports, the market remained lackluster, as the price was too high to work to deep-sea markets.