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Thursday, January 20, 2022

APLA 2016: US polypropylene market to tighten in 2017

After an uncharacteristic 2016, a source with a major North American trading company said Monday he was hopeful the US polypropylene market will tighten in 2017.

“The [US] market should tighten up and balance out after an unusual 2016,” the source said on the sidelines of the 36th annual Latin American Petrochemical Meeting in Buenos Aires.

Producers have been heard reducing production rates and offering contracts at margin reductions in an effort to entice customers to buy domestically and to stay competitive with import material still at play, market sources have said.

In 2016, producers pushed for margin expansions, which drove domestic pricing too high for buyers and enticed high amounts of imports, the source said.

US spot homopolymer injection-grade pricing has fallen $463/mt, or 33%, since the start of this year, according to S&P Global Platts data, with much of the decline attributed to high imports and falling feedstock propylene pricing, sources have said.

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