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PP buyers in Europe are pushing producers hard to get a share of drop in propylene price

September 07/2011

(ICIS) -- Polypropylene (PP) buyers in Europe are pushing producers hard to get a share of the ?37/tonne ($51/tonne) drop in the September propylene contract price, and several say they have achieved lower prices, sources said on Wednesday. “Discussions are still open for September,” said a major PP producer, “but we are facing pressure to drop prices.”

PP buyers built up stock in July and August. Many have returned from holiday but have not been faced with the higher prices that producers had predicted for September. Order books are not as healthy as they were, say some buyers.“We have an order book of only 15 days,” said one.
“Demand is limited,” said a PP producer. “Our clients are comfortable. They have stock.”

Most buyers saw minus ?20/tonne as the starting point of September PP pricing discussions. However, some already report that they have been conceded the full ?37/tonne drop that producers gained in the propylene contract price, and not only those whose prices are linked to propylene.
The propylene contract now stands at ?1,078/tonne FD (free delivered) NWE (northwest Europe), down by ?37/tonne from its August level. This price is subject to discounts.

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