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LyondellBasell nominated a 10 cent/lb increase for April PP contracts

April 04/2011

(ICIS) -- A major US polypropylene (PP) producer nominated a 10 cent/lb increase for April contracts, aiming to keep pace with a potential increase in propylene monomer prices, sources said on Friday. The 10 cent/lb (USD 220/t, EUR 154/t) increase nomination was at odds with another producers announcement to raise April prices by 2 cents/lb in addition to the monomer price increase.

Most US domestic PP contracts are linked to polymer grade propylene (PGP) benchmarks, and PGP has been nominated up 10-11 cents/lb for April.

In mid March, resin buyers and sellers forecast April PGP and PP to increase by 5-8 cents/lb, but tighter propylene supplies have caused expectations to firm.

A PP producer said the shutdown of an Enterprise splitter was contributing to the propylene shortage. Splitters convert refinery grade propylene (RGP) into PGP.

PP demand will weaken with the higher prices in April, but unlike previous price spikes, the market could stabilise at the higher levels, a trader said.

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