Houston, Aug. 27, reported that U.S. polypropylene (PP) exporters are facing some logistical delays as packaging facilities along the U.S. Gulf Coast are close to full capacity.
Domestically sold materials are mainly transported by bulk trains, while serving export buyers in Mexico and Canada.
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For exports outside North America, materials must be shipped to the U.S. Gulf Coast for packaging. Export goods are usually sold on container ships in 25 kg bags.
Packaging facilities along the Gulf of Mexico are experiencing delays as they try to keep up with the large volume of new polyethylene exported from the Gulf Coast.
Therefore, packaging facilities and warehouses have limited capacity to handle polypropylene exports, as polyethylene exporters and packers have much larger business volumes.
The U.S. polypropylene market is abundant, and there is a tendency to increase output in export channels to reduce domestic supply length.
Exports are piling up on bulk trucks in chemical plants, but there is insufficient supply of bagged materials for immediate shipment, so there is a delay of two to three weeks before the bags are officially sold.
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As the current quotation level is considered too high to take advantage of international arbitrage opportunities, the export price of polypropylene is facing some downward pressure.
Propylene contracts in August were extended for delivery, which may limit the upward trend of polypropylene prices.
American polypropylene goods are usually priced on the basis of unit premium.
ICIS assessed that the U.S. Gulf FOB for polypropylene bagged exports was 46-49 cents per pound ($1014-1080 per ton) in the week ending August 23.
Polypropylene is mainly used for packaging, rope, carpet, plastic parts, loudspeakers and automobile parts.
Major polypropylene producers in the United States include Brazil National Chemical Corporation, ExxonMobil, Formosa, Inlis, Leandebaser, Philips 66 and Dodall Petrochemical.
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