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The Rising Propylene Costs Drive Up Polypropylene Prices in the US
The Rising Propylene Costs Drive Up Polypropylene Prices in the US

The Rising Propylene Costs Drive Up Polypropylene Prices in the US

  • 20-Feb-2023 2:56 PM
  • Journalist: Gabreilla Figueroa

Prices for feedstock Polymer-Grade Propylene (PGP) in North America have increased significantly since  January 2023, driving up prices for Polypropylene (PP) resin. After seven consecutive months of price decreases, the PP price increase is the first for the material. Regional PP costs decreased by 4 cents in December and by a net of 42 cents for the entire 2022 fiscal year. PP manufacturers like LyondellBasell Industries aimed to hike prices by 6 cents in February. Although some PP producers had 3-cent increases planned for February 2023, the PGP price change overshadowed such plans.

Planned turnarounds constrained PGP supplies in the area at Enterprise Products and Invista plants in Texas and lower propylene production from oil refineries affected by the ice storm that slammed the Gulf Coast. As February approaches, "PP supply is limited," according to representatives of New York-based supplier Blue Clover LLC. PP producers have been lowering inventory rates for several months before the January 2023 price spike in PGP. Simply put, there is not much extra product material in the US during February 2023.

Only a small number of volumes of prime-packed resin were available for the entire range of PP grades. This lack of resin demand and skepticism regarding the sustainability of these higher price levels are highlighted by the fact that resin prices have not been able to keep up with rising feedstock costs. In fact, spot PGP prices rose in February due to Propene Dehydrogenation (PDH) outages before dropping by almost a dime as the prospects for the supply of monomers improved.

According to ChemAnalyst, the cost of PP will likely continue to increase as inventories in the domestic market are steadily declining. The moderate demand situation for PP is likely to improve in the coming months leading to a rising price trend of the product in the US.

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