Polypropylene prices across the global market were seen to have been trending downwards as weak demand and ample supplies largely maintained a presence in their market during the mid-way of August. Prices continued to journey southwards with weak demand conditions being noted across the North American, European and Asian markets with buyers across all of the markets adopting a cautious sentiment in procurement activity as buyers engage on hand-to-mouth procurements
Across the US market, demand for polypropylene remains subdued, with producers aligning reactor output to projected orders resulting in buyers to only engaging with the market to address immediate supply gaps rather than procuring inventories in bulk, thus resulting in a predominantly bearish pricing condition. Sentiments amongst processors remain largely subdued with sellers stating that buyers being hard to come by during the middle of North Atlantic Hurricane season.
Operational discipline among producers is evident, as reactor utilization is maintained at approximately 80% of capacity. Although domestic polypropylene sales witnessed an increase of 263 million pounds compared to the first quarter, uncertainties stemming from the volatile nature of U.S. tariff measures have continued to temper overall demand. Companies and consumers remain reluctant to commit to new orders or investments and continue to focus on drawing down from existing inventories.
Weak demand remained particularly pronounced in the construction and packaging sector as the U.S. Census Bureau has projected a slight decrease in new residential construction activity, anticipating 1.333 million housing starts this month, down from a previous forecast of 1.381 million. This decline, consequently, negatively impacted Polypropylene consumption in construction-related applications. In contrast, the automotive sector exhibited relative strength, with vehicle sales in July rising by 7.1% month-over-month to an annualized rate of 16.4 million units, providing some stability for Polypropylene demand.
European polypropylene demand has contracted amid traditional summer slowdowns. Supply side remained long, supported by ongoing normal operations at TotalEnergies’ crackers in Feluy and Gonfreville. Moreover, there has been a marked increase in exports from South Korea to Germany, with shipments rising from 276.0 tonnes to 329.5 tonnes representing an increment of 15%. The downward revision of European propylene contracts by Euro 10/ton has shifted market sentiment to a more cautious stance. July 2025 exports to Turkey surged from 19,747.5 tonnes to 31,413.3 tonnes representing an increment of approximately 60% as data from Korean Trade Statistics revealed, enhancing the already plentiful supply. Lower priced import from Asia largely continued to undercut domestically produced European Polypropylene with South Korean duty free PP contracts for August 2025 fixed at KRW 30/KG as South Korean sellers were heard being aggressive in pricing aiming towards to maintain leaner inventory levels.
Across the Asian market, particularly China, domestic polypropylene production was reported to have improved, reaching 783,100 tonnes this week, up from 777,100 tonnes the previous week. This increase is attributed to the resumption of operations at key facilities, including Yanchang Coal and Zhongke Refining and Chemical. However, the additional capacity at Daxie has yet to achieve full production levels, which has not significantly affected overall supply conditions. The average capacity utilization rate for polypropylene was heard at 77.91%, with significant contributions from Sinopec and the restart of respective production units enhancing throughput. Despite improvements in production, downstream inquiries continue to remain weak, indicating limited interest in replenishing inventory. This trend has exerted downward pressure on prices, particularly in the food and apparel packaging sectors.
Overall, polypropylene prices have were seen to have declined by 2.7% in North America, 2.4% in Europe, and 1.5% in Asia, largely reflecting losses in feedstock propylene prices midway into August 2025. Expectations for continued erosion of demand persists across all regions, compounded by limited procurement activities in the U.S. This has rendered U.S. polypropylene export prices uncompetitive in the global market, further intensifying volatility in trade conditions.
Market sentiment for Polypropylene is expected to remain subdued, especially in Europe, as seasonal holidays dampen activity, accompanied by adverse weather conditions in Southeast Asia. The prevailing bearish sentiment continues to influence pricing dynamics across the polypropylene landscape.
