AKRON, OHIO - Several leading polypropylene producers have announced further price increases based on operating rates that are at sold-out conditions, and demand that has leapt 13-15 percent compared with a year ago. Exxon Chemical Co., Huntsman Chemical Corp., Amoco Chemical Co., Solvay Polymers, Rexene Corp. and Epsilon Products Inc. announced they would increase PP prices by 4 cents per pound, effective July 1.
Meanwhile, Montell Polyolefins announced June 10 it would increase its prices 3 cents per pound on July 1.
PP inventories, by the end of April, dropped to a level of 28-30 days, based on current demand levels, industry sources said June 10. Producers had approximately 940 million pounds of PP in inventories.
A year ago, producers had 1.01 billion pounds of PP in inventories, which then translated into about a 34- to 36-day supply, sources said.
Suppliers attempt to maintain inventory levels at a 38- to 40-day supply, to provide an adequate buffer between order and delivery times.
Demand in 1996 has been boosted significantly by export sales, executives said last week.
Export sales of PP totaled 461 million pounds through April, nearly three times higher than the 157 million pounds exported in the same period in 1995, executives said.
Those sales drove worldwide demand up 13-15 percent over a year ago, while domestic demand rose nearly 7 percent, executives said.
Besides high demand and already-tight supplies, executives said they were keeping a wary eye on a possible PP production outage at Fina Oil & Chemical Co.
The company did not confirm word from competitors that Fina's PP production was put out of service May 23, and may be out for two to three weeks.
Such an outage would take 20 million to 25 million pounds of PP out of the market, executives said.