Propylene Prices Continue to Climb
January 06, 2021
Spot Polymer Grade Propylene prices continued to rally; January levels have reached $.575/lb, which is up another couple cents since the start of 2021.
Based on the forward curve and 35 million lbs of monomer that visibly transacted around this level today, these elevated prices are currently forecasted to remain through the first quarter.
December PGP contracts settled at $.485/lb, which was up $.10/lb from the November price. Assuming the typical $.025/lb premium that contracts generally hold to spot, if PGP did not budge from this level through Jan negotiations, we could expect monomer contracts to jump another $.115/lb to $.60/lb.
Spot Polypropylene prices have been sprinting higher, even faster than monomer. This paves the way for additional margin enhancing increases, which have already been nominated by PP producers for Jan and Feb. This is in on top of the imminent double digit cost-push increase that is at hand.
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