Volume: Growing
Price: Steady
Spot Polypropylene offers are still coming in at mostly steady prices and spot supplies have begun to grow. The offers are accumulating since prices are considered high given that market sentiment is now turning negative. Propylene monomer costs are reported to have settled at least $.025/lb lower to $.455/lb. Considering that during this past year contract Polypropylene prices have closely followed contract Propylene prices, resin buyers are rightfully expecting a concession in September.
In addition to the normal flow of offgrade railcars, we have also begun to see Generic Prime resin made available by multiple producers. The offers initially came discounted for export sale, but Houston traders are already full of supply and have in fact offered their own unsold inventories back to the market. By the end of the week several US producers began offering domestic railcars lower, to levels in which only select producers had previously been participating.
High resin prices and a difficult economic environment have stifled domestic Polypropylene demand. US processors have also been anticipating a top in resin prices to finally form and hopefully reverse. Therefore, they have kept their resin inventories low, trying to limit their exposure to historically high prices. Without a large cushion to lean on, it has made them vulnerable during negotiations, especially when spot resin needs arise. So even as resin prices seem to be topping now, we are still seeing a consistent flow of buy orders.
Since Polypropylene producers have not officially relaxed their stance with regard to the September price increase, some contract buyers have already sought alternative supplies to current contracts. In doing so, they intend to state their commitment to negotiate a price concession for September, rather than the proposed increase. There is still plenty of time to go this month, but at this juncture our view resides with the buyers.
Price: Steady
Spot Polypropylene offers are still coming in at mostly steady prices and spot supplies have begun to grow. The offers are accumulating since prices are considered high given that market sentiment is now turning negative. Propylene monomer costs are reported to have settled at least $.025/lb lower to $.455/lb. Considering that during this past year contract Polypropylene prices have closely followed contract Propylene prices, resin buyers are rightfully expecting a concession in September.
In addition to the normal flow of offgrade railcars, we have also begun to see Generic Prime resin made available by multiple producers. The offers initially came discounted for export sale, but Houston traders are already full of supply and have in fact offered their own unsold inventories back to the market. By the end of the week several US producers began offering domestic railcars lower, to levels in which only select producers had previously been participating.
High resin prices and a difficult economic environment have stifled domestic Polypropylene demand. US processors have also been anticipating a top in resin prices to finally form and hopefully reverse. Therefore, they have kept their resin inventories low, trying to limit their exposure to historically high prices. Without a large cushion to lean on, it has made them vulnerable during negotiations, especially when spot resin needs arise. So even as resin prices seem to be topping now, we are still seeing a consistent flow of buy orders.
Since Polypropylene producers have not officially relaxed their stance with regard to the September price increase, some contract buyers have already sought alternative supplies to current contracts. In doing so, they intend to state their commitment to negotiate a price concession for September, rather than the proposed increase. There is still plenty of time to go this month, but at this juncture our view resides with the buyers.
