Polypropylene prices fall 10¢/lb
Propylene costs are down, supply is up
Tom Stundza -- Purchasing, 11/5/2009 11:35:16 AM
Declines in domestic spot prices of propylene have spread downstream into polypropylene resin, where transaction prices have slipped by a dime to 53¢/lb this week. With supply of propylene moving from tight to excess last month, the transaction price average slipped to 42¢/lb in October from 53¢ in September. The contract price also slipped to 46¢ last month from 56¢ the month before.
Plastic News magazine says that, with summer driving season at an end, less propylene has been needed as a gas additive, resulting in more of it being available for polypropylene production. A petrochemical cracker jointly operated by BASF and Total Petrochemicals USA in Port Arthur, Texas, also has resumed production, further increasing propylene supply to stockpiles last week of 2.36 million barrels.
Meanwhile, domestic polypropylene demand has dropped by almost 11% through late summer, according to the American Chemistry Council. That's partly due to reduced purchasing by end-use companies and partly because of lower export sales.
ICISpricing.com says the November market price slippage also can be traced to a seasonal drop-off in resin demand from the automotive parts industry. That's primarily why a proposed 2¢-3¢/lb increase in polypropylene contract prices isn't gaining much traction.
See earlier story: Polypropylene prices increase by 8¢/lb
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