US PP contract prices in August up US$0.05/lb., in line with propylene contract prices; US producers expected to try to raise margins at end of year during contract negotiations

Allison Oesterle

September 10, 2013 (ICIS Chemical Business (CBNB Abstracts)) – In accordance with polypropylene (PP) price increases, contract prices for US propylene for Aug 2013 were higher by 5 cents/lb, despite attempts by some producers to boost their margins during the month. For small- to medium-volume buyers, contract prices were settled at 81-83 cents/lb DEL for homopolymer-injection and raffia-grade material. The PP market mostly has a monomer-based contract that is in step with the monthly PGP price, which increased by 5 cents/lb to 70 cents/lb for Aug 2013. Attempts by some producers to implement an additional 2 cents/lb margin bump for the month were not implemented. However, efforts to increase margins are expected to be revived at end-2013 when contracts will be renegotiated. Sources are debating whether the 5 cents/lb increase will scare buyers away from the market. A graph entitled, US polypropylene prices, shows homopolymer injection DEL prices (cents/lb) from Aug 2012 to Aug 2013. Original Source: ICS Chemical Business, http://www.icis.com/, Copyright Reed Business Information Limited 2013.

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