Volume: Fair
Price: Higher
The spot Polypropylene market continues to drudge higher, adding another half-cent or so this past week. With Propylene costs still hovering in record territory, Polypropylene producers have revised November prices increase intentions to $.08/lb. RGP/PGP players have yet to settle Nov monomer contracts, but the spot market has been strong ever since the Oct settle, so Nov contracts will certainly be marked sharply higher too.
Polypropylene prices have been essentially pegged to monomer costs for the better part of a year. Major indices and "monomer plus" contracts have helped resin producers to maintain minimally acceptable margins, while strong exports have helped keep operating rates high. The overall challenging environment has helped encourage Dow to announce the shuttering of an older Polypropylene plant in Louisiana that has annual production capacity of 500 million lbs.
There had been a price ceiling, somewhere around $.60/lb, for railcars of Generic Prime Homopolymer. The most recent supply disruption at the refinery level helped propel Polypropylene prices into new territory well into the $.60s, and some prime contracts will be in $.70s for November. While prices have been forced higher by costs, demand past the $.60/lb level seems to be suffering.
Most domestic buyers have little choice but to pay the new price. However, some are determined to draw down inventories as low as they can go, hoping to avoid the peak of this rally. Fresh export prices well into the $.60s/lb have found some buyers, particularly south of the border where US resin is heavily relied upon, but high volume transactions are now few and far in-between.
With ExxonMobil's Beaumont FCC restarting Nov 8, the pressure on monomer supply is expected to ease, and processors could soon begin to see some relief after being hurt by high resin costs duing these past months.
Price: Higher
The spot Polypropylene market continues to drudge higher, adding another half-cent or so this past week. With Propylene costs still hovering in record territory, Polypropylene producers have revised November prices increase intentions to $.08/lb. RGP/PGP players have yet to settle Nov monomer contracts, but the spot market has been strong ever since the Oct settle, so Nov contracts will certainly be marked sharply higher too.
Polypropylene prices have been essentially pegged to monomer costs for the better part of a year. Major indices and "monomer plus" contracts have helped resin producers to maintain minimally acceptable margins, while strong exports have helped keep operating rates high. The overall challenging environment has helped encourage Dow to announce the shuttering of an older Polypropylene plant in Louisiana that has annual production capacity of 500 million lbs.
There had been a price ceiling, somewhere around $.60/lb, for railcars of Generic Prime Homopolymer. The most recent supply disruption at the refinery level helped propel Polypropylene prices into new territory well into the $.60s, and some prime contracts will be in $.70s for November. While prices have been forced higher by costs, demand past the $.60/lb level seems to be suffering.
Most domestic buyers have little choice but to pay the new price. However, some are determined to draw down inventories as low as they can go, hoping to avoid the peak of this rally. Fresh export prices well into the $.60s/lb have found some buyers, particularly south of the border where US resin is heavily relied upon, but high volume transactions are now few and far in-between.
With ExxonMobil's Beaumont FCC restarting Nov 8, the pressure on monomer supply is expected to ease, and processors could soon begin to see some relief after being hurt by high resin costs duing these past months.
