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PP market in North America shows volatility

February 20/2012

(polyestertime) -- The North American polypropylene market made it all the way to the second month of 2012 before returning to the volcanic behavior it displayed in 2011.

Prices for the material have surged an average of 17 cents per pound since Feb. 1, according to buyers contacted by Plastics News. Selling prices in the region for PET bottle resin have seen a more modest price increase of 4 cents per pound since Jan. 1.

The PP move is the first increase since May 2011. At that point, prices had climbed 37 cents in the first five months of the year. Prices then tumbled 41 cents before 2011 ended. This extreme volatility Ц as well as longterm supply concerns about propylene feedstock Ц has led a number of processors to consider using other materials instead.
The February move resulted from tightness in propylene supply that was caused by a number of refinery
maintenance turnarounds.

North American PP sales for 2012 totaled about 16.4 billion pounds, with 94 percent of that amount being sold
domestically, according to ACC. Sales into injection molded cups and containers provided a bright spot for the
market, climbing almost 13 percent, but sales into injection molded housewares tumbled by a similar percentage.

Compared to the eruptions in PP prices, the 4-cent increase seen in the PET bottle resin market in January and
February was a gently rolling hill. Some buyers reported seeing increases of as much as six cents in that twomonth period, but four cents was the consensus amount.

Higher prices for paraxylene feedstock were among the primary reasons for the PET increase, which came after
prices for the material fell an average of 5 cents in December. One PET market watcher said that higher
feedstock prices are creating pressure for additional price increases in March as well.
During 2011, average North American selling prices for PET grew by a net of 5 cents per pound, or about 6 percent.

Author:Anna Larionova
Tags:PP, PET.
Category:General News
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