Volume: Good
Price: Higher
Polypropylene prices were strong this week and can move into new high territory if producers are able to implement their $.03-.04/lb price increases nominated for October contracts. Polypropylene producers need most of this increase just to keep up with rising feedstock costs. October PGP contracts have initially settled up $.03/lb, although so far only on a limited basis. As the October monomer settlement becomes more widespread, we expect the Polypropylene market to firm.
Rising feedstock costs, which are at historically high levels, continue to be the primary driving force behind the Polypropylene market. While costs were forecasted (and started) to ease into the fourth quarter, refinery utilization rates, which never fully recovered from earlier outages, had again been impaired by troublesome, albeit not devastating gulf storms. Again, cost relief seems just around the corner, but as of yet has been elusive.
Polypropylene producers have been able to consistently pass through their higher costs and are expected to do so once again in October. Generic Prime Polypropylene resin has been made available reflecting the fully increased price, and while we have yet to move any fresh railcars at this level, good offgrade cars did trade moderately higher in the spot market.
Even though domestic Polypropylene demand has disappointed for much of the year, spot purchasing activity has improved as downstream inventories have been drawn down. Some processors have been procuring spot loads trying to delay their commitment to higher priced October contracts.
It is our belief that as long as monomer markets maintain their strength, the spot Polypropylene market will also firm to enable around $.03/lb price increase for October resin contracts.
Price: Higher
Polypropylene prices were strong this week and can move into new high territory if producers are able to implement their $.03-.04/lb price increases nominated for October contracts. Polypropylene producers need most of this increase just to keep up with rising feedstock costs. October PGP contracts have initially settled up $.03/lb, although so far only on a limited basis. As the October monomer settlement becomes more widespread, we expect the Polypropylene market to firm.
Rising feedstock costs, which are at historically high levels, continue to be the primary driving force behind the Polypropylene market. While costs were forecasted (and started) to ease into the fourth quarter, refinery utilization rates, which never fully recovered from earlier outages, had again been impaired by troublesome, albeit not devastating gulf storms. Again, cost relief seems just around the corner, but as of yet has been elusive.
Polypropylene producers have been able to consistently pass through their higher costs and are expected to do so once again in October. Generic Prime Polypropylene resin has been made available reflecting the fully increased price, and while we have yet to move any fresh railcars at this level, good offgrade cars did trade moderately higher in the spot market.
Even though domestic Polypropylene demand has disappointed for much of the year, spot purchasing activity has improved as downstream inventories have been drawn down. Some processors have been procuring spot loads trying to delay their commitment to higher priced October contracts.
It is our belief that as long as monomer markets maintain their strength, the spot Polypropylene market will also firm to enable around $.03/lb price increase for October resin contracts.
