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New Polypropylene Manufacturing Units Further Ease the Cost in the US
New Polypropylene Manufacturing Units Further Ease the Cost in the US

New Polypropylene Manufacturing Units Further Ease the Cost in the US

  • 26-Dec-2022 12:03 PM
  • Journalist: Bob Duffler

The most common resin traded this past week was Polypropylene (PP), as purchasers anticipating a new round of price reductions paid a total price to secure stock. Activity accelerated dramatically in the second half of the week, and completed volumes strengthened at the end because of Polymer Grade Propylene (PGP's) approximately 3 cent increase. More significant participants entered the market and made some quick acquisitions believing that greater prices would follow with the New Year, mainly favoring new railcars. While most businesses were completed using HomoPolymer (HoPP), we increased the amount of prime CoPolymer (CoPP) in our market-making stocks.

Late-night truckload requirements and ongoing railcar delays exist in the US but could not raise PP costs. Although PP prices have decreased significantly, and some purchasers are beginning to replenish their stockpiles at these costs, overall demand has remained sluggish. Due to excess, producers have already seen their enormous profit margins start to shrink. As a result, they have aggressively reduced production.

At the polyolefins plant in Baton Rouge, Louisiana, ExxonMobil has announced the successful opening of its new (PP) manufacturing unit. To fulfill the rising demand for high-performance, lightweight, and durable plastics, notably for automotive components that can increase fuel efficiency and lower vehicle emissions, by boosting PP production capacity along the Gulf Coast by 450,000 metric tonnes annually. PP is also utilized to increase the efficiency and safety of commonplace goods like food packaging and medical masks.

According to ChemAnalyst, the US market continues to compel the economy to slow by raising interest rates, there is still a lot of geopolitical and economic uncertainty at present rates, and the prices are expected to ease for the rest of 2022. The reduced production rates and the rising cost of upstream PGP in the US market will increase the PP prices in Q1 2023 despite new manufacturing units.

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