Propylene price outlook hinges on polymer use

Abstract

Merchant suppliers of propylene this week will try to add 0.5 cent to May contract prices. If they succeed, prices will be 15.5 to 16 cents per lb for polymer grade. Their success will depend on a price increase for polypropylene, which accounts for almost two fifths of U.S. consumption of propylene in chemicals and polymers. Following the rapid decline in propylene prices during the last half of 1989 and an inventory liquidation of polypropylene, prices firmed in early 1990 as a result of perceived tightness in supplies. This tightness was caused by temporary shutdowns of plants damaged by unusually cold weather. Prices for propylene, polypropylene, and some other propylene derivatives have been volatile recently because of the difficulties that suppliers have had maintaining announced price increases. The lost production now has been made up, industry sources say. Consequently, factors other than shortterm supply will continue to dominate prices unless another major upset in plant ...