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LyondellBasell Provides Clarity For May PP Price Increases
May 27, 2021

LyondellBasell clarified its position today relative to the May polypropylene price settlement and its June PP price increase announcement from yesterday.

In a letter to its customers, LyondellBasell said it will settle its May PP contracts up by $.13/lb in line with the published $.13/lb increase in the May US Gulf propylene monomer price from April. The May PP contract price will have no additional increase beyond the $.13/lb hike. LyondellBasell had previously nominated an additional $.05/lb increase for May aside from the change in monomer costs.

The company's clarification comes one day after it sent a vague letter to customers, which caused some confusion in the market as to whether the company was implementing any price increase in May at all.

Effective June 1, LyondellBasell will also implement a price increase for all PP products sold in North America in line with any published change in the June US Gulf propylene monomer price from May, plus an additional $0.08/lb margin increase as contracts allow.

The price increases come as PP supply remains tight, following weather-related production issues in recent months, which led to lost sales and higher costs. PP production and inventories are improving, but prime-grade PP availability is still scarce. Prevailing industry sentiment suggests any significant disruption to the market could send prices even higher.

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