Spot PP prices for July in the Middle East drop by US$140/ton month on month

29-Jun-11

Spot polypropylene (PP) prices have tumbled by around US$140/ton (8%) for July cargoes in the Middle East from June. This fresh price drop was triggered by producers in the Gulf Cooperation Council (GCC) region who slashed offers after the recent price fall in the China market, as per ICIS. On Tuesday, PP raffia was discussed at US$1510–1530/ton DEL (delivered) Dubai and at US$1470–1480/ton DEL Saudi Arabia. PP prices have fallen by nearly 12% since a downturn began in mid-May. GCC producers have had to reduce offers in a bid to attract buyers in a bearish market, and to reduce mounting inventories. Regional producers do not intend to reduce operating rates, but target to seek more outlets for their products, such as Africa. Markets of Egypt and Turkey are no longer as lucrative Demand in the Middle East is expected to improve slightly in July, but players agree that there is now no distinct peak season. Saudi Arabia's Petro Rabigh and Natpet are expected to restart PP plants in July, following annual maintenance. Increased supply PP availability in the H2-July will weigh further on prices. Ramadan, the Muslim fasting month, will begin on 1 August, when demand will start to dwindle as downstream converters prepare to slow down their operations.