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Low Demand Continues to Drive Down Polypropylene Prices in the US Market

Low Demand Continues to Drive Down Polypropylene Prices in the US Market

Low Demand Continues to Drive Down Polypropylene Prices in the US Market

  • 07-Dec-2022 2:26 PM
  • Journalist: Jacob Kutchner

Polypropylene (PP) prices in the North American region decreased during the start of December 2022, even though the upstream Polymer Grade Propylene (PGP) prices witnessed a slight rise in the domestic market. This ongoing easing of PP prices in the US market has been occurring over the past six months, which is a blatant sign of the poor state of the world economy. PP has more extensive downstream applications than most Polymers, their usage in automotive and new appliances, so when the construction sector is vulnerable, it eases the demand for new devices leading to lower demand for PP in the US market.

Several producers of PP in the US have limited the production rates to counter the oversupply situation in the domestic market, but the weak demand for PP made the decreased production have a low impact on the US market. The start of December brought in a reasonably lackluster trading environment for PP. While the completed volumes were substantial, a large portion of the buyers was focused on a small number of Copolymer (CoPP) and Homopolymer (HoPP) railcar deals, and the regular truckload demand was not as strong as it usually is, despite several Prime HoPP truckloads were sold for the asking price. CoPP truckload supplies are still scarce, and when they are available, the asking prices are very high, further weakening the buying attitude. Off-grade railcar offers decreased, finding supplies to fulfill our transactions required significant work, and buyers had to pay a premium price for them.

According to ChemAnalyst, the prices of PP in the US will continue to drop throughout the month on the back of poor buying sentiments. The holiday season would further drive down the buying sentiments from end-users and cause weak procurement activities from the downstream industries, which will ensure the decline of PP costs in the US market for the rest of this year.

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