ExxonMobil Chemical aims to increase polypropylene prices in the Americas by 2 cents/lb ($44/mt) effective August 18, the company said in a letter to customers obtained by Platts on Tuesday. The increase, which covers homopolymer, co-polymer and random co-polymer grades, would be separate from any change in the propylene contract price for the month, the letter said.
ExxonMobil Chemical joins major producers Braskem America and LyondellBasell subsidiaries Equistar and Basell Poliolefinas in announcing price increases for August in addition to any change in monomer pricing.
Braskem America last week announced a 4 cents/lb increase effective August 1. LyondellBasell, like ExxonMobil, is aiming for a 2-cent/lb increase. Last month, Total Petrochemicals announced it would seek a 4 cents/lb increase effective July 7.
Market participants have cited supply tightness — the result of multiple production issues — as the main reason for the increases. But despite the supply squeeze, the increase nominations are expected to face resistance from contract buyers, distributor sources said.
Polypropylene contracts, which are settled on a monthly basis, follow PGP contract pricing closely. A majority of contracts remain on monomer-plus formula, with the premium, or the “plus,” at 8-12 cents/lb, market sources have said.
Market sources said the announced increases were likely targeted for spot buyers and distributors without contracts. An end-of-year adjustment for contract buyers was not out of the question, these sources said.
PGP contracts last settled for July 67.50 cents/lb. Platts last assessed homopolymer polypropylene contracts for July at 77.50-78.50 cents/lb delivered-railcar basis, remaining at its lowest level since November 2013.
Platts last assessed homopolymer injection for export Monday at $1,698-1,720/mt (77-78 cents/lb) FAS Houston, up $11/mt from Friday. Domestic market sources, meanwhile, talked spot pricing in the secondary market at levels of no less than 81 cents/lb ($1,785/mt) delivered.
– Platts.com
