PP buyers in Europe face price increases for sixth consecutive month

14-May-10

Polypropylene buyers in Europe face hikes for the sixth consecutive month in June on restricted supplies due to production and feedstock issues, as per ICIS. In the meantime, May is still under discussion for many accounts. Sellers are seeking an additional €30/ton supplement for May prices over and above the €50/ton already paid. Buyers, unable to absorb these increases, are frustrated that suppliers are talking of increases for June, irrespective of propylene trends. They estimate that June PP prices will go up on tight supplies. Production issues were further exacerbating PP shortages caused mainly by a snug propylene monomer market. Market sources reported Total Petrochemicals’ Feluy, Belgium site which, at 850,000 tpa is the largest PP production plant in Europe, is down. The company has declared Force majeure on supplies. Previous production problems at INEOS’ Grangemouth, UK and SABIC’s Geleen, Netherlands facility also left these operators’ supplies tight. High cost of spot propylene resulted in the reduction of PP at several sites. Cutbacks due to monomer tightness had been in effect for several months.