Buyers shy as PP prices are termed "unreasonalbly high"

09 Jan '06

2 min read

Polypropylene prices are rising at the back of rising energy prices even as its downstream demands holds a promising prospect on the rise. Reason for the price rally is due to the leakage at crackers in South Korean firm YNCC's No1 and No3 unit. Moreover, Taiwan's leader CPC's Kaohsiung plant No 5 went under unscheduled repairs in its cracker. Thus, last week, Asian markets saw propylene prices cross US $1000 per metric ton mark. However, buyers remained on sidelines on doubts about the gains accounted for, in propylene feedstock last week that elicited no new purchases at $980 per metric ton FOB Korea mark and above. Speculations apart, buyers hope that upstream energy prices will move up that propelled the price rally in final analysis proved one going purely on sentimental basis. But, buyers argue that YNCC crackers going on stream after due repairs, CPC's No 5 cracker starting again, and China enjoying holidays soon, may all end up in Asian buying activity grinding a slow down. All would then witness upstream energy values in retreat that will ultimately neutralize Asian propylene values gains that it has recorded earlier, last week. Besides, non integrated makers of PP and Acrylonitrile have clearly sounded their aim of production cutback if propylene prices do not come down from their unreasonably current high levels.

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