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A heavy maintenance season sees spot polypropylene prices increase 14% since New Year

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A heavy maintenance season sees spot polypropylene prices increase 14% since New Year

Houston — A mixture of polypropylene plant maintenances and outages have pressured pricing upwards 14% and tightened supply since the start of the new year, sources said Wednesday.

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"There are suppliers having planned and unplanned outages that have been limited on availability," one seller source said.

At least six producers were heard entering and or completing maintenances further shortening spot supply.

Amid the tightness, spot homopolymer polypropylene has risen $154/mt (7 cents/lb) since January 2 when it was assessed at $915/mt (41.50 cents/lb), according to S&P Global Platts data.

The increase in spot pricing has come amid announced increases by producers.

Formosa Plastics, Lyondellbasell, Braskem America and Total Petrochemicals all previously announced plans to increase their PP prices in the US by 3-4 cents/lb in letters to customers.

Market participants noted that supply constraints should theoretically lend support to higher pricing however this has failed to materialize amid an absence of spot activity as producers sought to meet contractual obligations.

Meanwhile, demand has been weak as buyers are being cautious of the pending impact of the coronavirus domestically and globally, one source said.

Platts last assessed homopolymer polypropylene at $1069/mt FAS Houston on Tuesday, flat day on day.