Category

Countries

American Polypropylene Manufacturers are Banking on Improving Margins during March 2023
American Polypropylene Manufacturers are Banking on Improving Margins during March 2023

American Polypropylene Manufacturers are Banking on Improving Margins during March 2023

  • 09-Mar-2023 2:07 PM
  • Journalist: Jacob Kutchner

On Monday, LyondellBasell and ExxonMobil each proposed a price increase for their Polypropylene (PP) products sold in North America, which would take effect on March 1, 2023. In addition to any modifications made to the next March Polymer Grade Propylene (PGP) contract, an increase is recommended.

Despite the fact that February PP contracts are still being settled, at least two significant resin makers have already announced a pricing initiative for March 2023 in response to the jump in spot PGP monomer costs last week brought on by continued production problems. This comes after the spot price of PGP monomer increased by over 20 cents last week. The growth of PP costs was prompted by continuing production problems at Invista's Propylene dehydrogenation (PDH) unit in Houston and by traders' short cover positions.

However, there were significant spikes in demand for PP, while the supply rate in the US was not as steady as it usually is. The sales of CoPolymer (CoPP) improved steadily during February, whereas HomoPolymer (HoPP) business was dull comparatively. The PP grades that the buyers seek are getting harder as the continuous limits on prime and off-grade railcars in the US are increasing. A large portion of the procurement activity of PP that did occur was judged urgent since buyers had depleted their stock and were more vulnerable to railcar delays without a buffer.

According to ChemAnalyst, many purchasers have chosen to buy what they need to ride out the elevated pricing witnessed so far in 2023, which was caused by fast-rising monomer costs. However, PGP supplies remain extremely scarce, and the cost-push increases persist. While our analysts predicted that the PGP and PP markets would collapse in February, all signs now point to the increased monomer costs continuing and driving up PP costs at least through March and, most possibly, into April.

Related News

Asian Polypropylene Market Turns Bearish in Early November Amid High Inventories and Weak Export Demand
  • 07-Nov-2024 12:00 AM
  • Journalist: Phoebe Cary
Grace Boosts Polypropylene Capacity in India with Nayara Energy
  • 30-Oct-2024 6:05 PM
  • Journalist: Nina Jiang
US PP Market Turned Southwards in Mid- October despite challenging supply conditions
  • 21-Oct-2024 7:00 PM
  • Journalist: Stella Fernandes
SABIC’s Circular PP with Ocean-Bound Plastic Powers Sustainable Food Vacuum System Containers
  • 15-Oct-2024 11:36 AM
  • Journalist: Gabreilla Figueroa