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12/18/2014 | 1 MINUTE READ

PP Prices Drop About Twice More From Last Month

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Further major decline in PP prices possible for first month of 2015.

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After dropping by 5ȼ/lb in November, PP contract prices are expected to drop by about 10ȼ/lb this month—all in step with propylene monomer contract price settlements. Scott Newell, director of client services for PP at Resin Technology, Inc. (RTi), ventures that another 10ȼ or more is likely to come off monomer and PP contract prices next month.


Michael Greenberg, CEO of The Plastics Exchange reported earlier this weeks that PP spot prices dropped further because of the steep contract price reductions but noted that material availability was still tight, supporting higher spot price levels.


Both Greenberg and Newell note that while PP suppliers are getting a 10ȼ/lb relief against their contracted monomer this month and are passing along most of the benefit to processors, several suppliers are aiming to fully implement or hang on to the 2ȼ/lb margin expansion from early fourth quarter.


“Tight supplies could very well enable a level of disconnection from monomer, but the markets will likely drop again in January and this could create a challenge,” Greenberg reported. Meanwhile, both sources note that suppliers have been managing their production output in line with demand, making the market fairly tight. At the same time, ‘buying as needed’ appears to be the order of the day as the year comes to a close and more price decline looms in the very near future.



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