Polypropylene prices were heard surging on Tuesday as strong demand from European buyers dried up supply, sources said.
Platts assessed PP on Tuesday at Eur1,180/mt FD NWE, a Eur60/mt increase on the day and a rise of Eur105/mt in November alone, representing a seven-week high.
"The current acceleration in prices is happening because its a tight market, not because of outages. Demand is very strong," said one seller on Tuesday, adding that a weak euro had cut off imports from other regions.
The same source said that customers were attempting to build stock for next year: "PP has grown 4,5% this year. Question is, how much of that is actual demand growth and how much is stock building for next year."
He added that the force majeure declared on propylene at Shell Chemical's cracker in Moerdijk was possibly causing bullish sentiment in PP pricing in the short term.
A second market source added that, as PP had been tight before Moerdijk's most recent problems, and now prices were headed towards the Eur1,200s, "there are two big PP turnarounds in March and May last year, and the only opportunity to build stock is now."
Meanwhile, low density polyethylene also showed a significant increase, rising Eur30/mt since Monday to be assessed at Eur1,380/mt FD NEW Wednesday, a high not seen since the end of August.
"The rate of increase is not weakening now we are over the beginning of month resistance," a producer source said.
Polyethylene like polypropylene saw strong demand at the start of November, with order books among some Northwest European producers closed last week, sources said.
"We are seeing a desperate buyers' market," a trade source said, adding that the scarcity of product present allowed for the repeatability of high priced sales through November and even December.
"There are a small number of imports heard arriving in December. Everyone is trying to look for alternatives now," another trade source said.
