Global Polypropylene Prices Hold Steady Amidst Geopolitical Tensions
Global Polypropylene Prices Hold Steady Amidst Geopolitical Tensions

Global Polypropylene Prices Hold Steady Amidst Geopolitical Tensions

  • 24-Apr-2024 6:23 PM
  • Journalist: Rene Swann

In the third week of April 2024, Polypropylene (PP) prices remained stable in the global market, showing a period of consistency amidst ongoing geopolitical uncertainties. In Asia, prices were steady with limited spot activity in the region. The persistent geopolitical tensions in the Middle East have increased anxiety among market participants. Some buyers are choosing to wait on the sidelines, anticipating stabilization in volatile upstream feedstock markets before making transactions. On the other hand, other buyers are proactively securing cargo purchases in anticipation of potential price increases due to global tensions. Concerns have been raised about possible disruptions in the Middle East supply chain, which could affect the movement of export cargoes to Asia. Additionally, shipping companies may raise container freight rates to ensure smooth cargo movement, contributing to market uncertainties.

This stability in PP prices reflects a cautious approach by market players amid geopolitical challenges and supply chain concerns. As the situation evolves, stakeholders are monitoring developments closely to adapt their strategies and mitigate potential risks associated with market disruptions and fluctuating freight rates. The global PP market remains dynamic, requiring proactive management and responsive decision-making in response to shifting geopolitical and economic conditions.

In the US and European PP markets, prices also remained unchanged during the week due to a balanced gap between supply and demand. While some suppliers are aiming to implement price increases from month to month, second-quarter prices for major commodity resins are expected to remain largely flat, with a looming correction anticipated for PP. Other resins such as PE, PS, and PVC may experience modest downward movements, potentially reversing increases seen in the first quarter. Factors contributing to this trend include slowed domestic and global demand, static or lower prices of key feedstocks, and high inventories across the supply chain, particularly for PE and PET. Additionally, competitively priced imports of pellets and finished goods have impacted the PS and PET markets.

In the feedstock Propylene market, which is crucial for PP production, prices need to adjust across the propylene chain, especially considering that monomer prices nearly doubled since December 2023, positioning the US as the highest-priced market for propylene and PP. While domestic PP demand showed signs of rebounding in the first quarter, with inventory rebalancing observed for pellets and finished goods, overall demand remains below average, adding further complexity to the market dynamics.

According to ChemAnalyst, the price of the product is expected to trend upwards in the coming weeks. This increase may driven by higher demand from downstream industries and new inquiries for Polypropylene (PP) from overseas markets, particularly due to seasonal demand patterns.

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