US polypropylene contract prices for October were settling at a 2.5 cent/lb ($55/mt) decrease on the back of a similar movement on feedstock polymer-grade propylene, sources said Friday.
PGP contract prices for October were heard settled at 67.50 cents/lb ($1,488/mt) earlier Friday, down from 70 cents/lb levels for September, and at least one major PP producer was already reflecting the movement in its prices for the month, a reseller source said.
The downward movement, the first since prices fell 1 cent/lb from April to May of this year, surpassed market expectations that centered around a 2-cent/lb decrease based on persistently lower spot PGP pricing, sources said.
Homopolymer injection contracts last settled for September at 79-80 cents/lb ($1,742-$1,764/mt) on a delivered-railcar basis, as assessed by Platts. The October decrease, if accepted marketwide, would leave the homopolymer price at 76.50-77.50 cents/lb delivered-railcar basis.
Polypropylene prices in the US track PGP settlements, given that a majority of PP contracts remain on a monomer-plus basis, with the premium over PGP between 8-12 cents/lb, market sources said.
Domestic propylene and polypropylene prices remained strong through the summer months on the back of healthy demand and tight supply, sources said.
Some PP sellers in the US and Mexico said they expect the decrease to spark demand, which was still being described as decent, although other sources worried that any expectation of further decreases in November might cause some buyers to hold off on purchases.
Source: Platts.com
