US polypropylene supplies were characterized as tight this week and were expected to remain so through the first half of September and possibly longer,
sources told Platts this week.
Sources pointed to strong demand and inventory management as the primary drivers behind the market tightness. On participant said the increase in demand stemmed from the expectation that the market anticipated a decline in
July pricing and carried low inventories. Prices, however, did not fall and
many buyers were sent scrambling. That associated increased demand ultimately
allowed sellers to hike August contracts by 2 cents/lb, sources said.
While most participants agreed that the supply/demand balance was unlikely to correct itself in the next 30-45 days, some sources said that demand could hold longer. One seller said that demand from converters was beginning to increase and that he had received a request for large volumes from one converter but was unable to complete the deal.
Domestic prices were talked in the high 60s cents/lb range for homo injection railcars this week however availability was thin. "They’re all sold out. You can’t buy a pound," said one source. In exports, the market remained quiet as the price was too high to work to deep-sea markets. A Colombian buyer was said to have been offered homo injection grade at $1,510/mt CFR however some participants anticipated that the material could be of Mid-East or Korean origin.