US polymers major Formosa Plastics Corporation USA plans to increase prices on all grades of polypropylene by 4 cents/lb ($88/mt) effective August 1, the company said Tuesday in a letter to customers obtained by Platts.
The price increase is in addition to a previously announced price increase, the letter said. Formosa had announced a 3-cent/lb increase effective July 1.
Formosa is not alone in seeking increases for August amid tight market conditions. Producers including ExxonMobil Chemical, LyondellBasell companies Equistar and Mexico City-based Basell Poliolefinas, Total Petrochemicals and Ineos are seeking increases that could total 4 cents/lb ($88/mt) or more, depending on the contract settlement for feedstock polymer-grade propylene and their ability to realize additional increases of up to 2 cents/lb.
Exxon, LyondellBasell and Total first announced their intentions to raise August prices by 2 cents/lb in late June and early July. Ineos announced a similar increase for July.
These hikes would be in addition to any change in the price of PGP. Polypropylene contract prices in the US track PGP settlements, as a majority of contracts remain on a monomer-plus basis, with the premium over PGP between 8-12 cents/lb, as per market sources.
PGP contracts for August have been nominated by at least one major producer at a 2-cent/lb increase to July (65 cents/lb or $1433/mt), although expectations in the market center around a rollover settlement, sources said.
Some polypropylene market sources said that while they doubt producers will be able to incorporate the additional increases into the contract market for the time being, they should have no problem doing so in the spot market, where material has been scarce and priced at a premium in recent weeks, sources said.
Homopolymer injection contracts for July were last assessed by Platts on July 24 at 74-75 cents/lb ($1,631-$1,653/mt) delivered-railcar basis.
Source: platts.com
