Monday, August 22, 2011

Glad I'm not buying propylene in China

Just look at the first sentence of this news report (courtesy of Plastemart):
"Spot homo-PP prices in China have been trading close to par with spot propylene prices on an FOB Korea basis since the beginning of August, resulting in significantly squeezed margins for non-integrated producers..."(emphasis added)
In other words, some plants have to buy the monomer and sell the processed polymer for nearly the same price. Keeping in mind that the processing includes not only the use of the equipment and the energy associated with it, but also the catalysts, the QC testing, the final packaging, administrative costs, sales costs...Somebody is taking a hit in the wallet and I'm glad it is not me.

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