Global Polypropylene Prices Face Downturn Amidst Weakened Demand and Excess Supply
Global Polypropylene Prices Face Downturn Amidst Weakened Demand and Excess Supply

Global Polypropylene Prices Face Downturn Amidst Weakened Demand and Excess Supply

  • 27-Nov-2023 2:58 PM
  • Journalist: Harold Finch

The third week of November 2023 brought about a significant downturn in the global Polypropylene (PP) market as various regions grappled with notable price declines. The intricate dynamics of this trend were shaped by a combination of factors, including a sharp drop in upstream Crude Oil prices, diminished demand from downstream industries, and an oversupply of PP in the market.

In the United States, the PP market witnessed an approximate 7% price decrease, primarily driven by a 6% decline in upstream Crude Oil prices. The API reported a substantial addition of 1.335 million barrels to US Crude Oil inventories, surpassing expectations. This unexpected increase contributed to the overall bearish sentiment in the market. Despite the Biden Administration's efforts through the buyback program, total purchases for the Strategic Petroleum Reserve (SPR) remained below 4 million barrels. This scenario reflects the delicate balance the industry is trying to strike amidst fluctuating energy prices and global economic uncertainties.

Across the Atlantic Ocean, Europe experienced a decline in PP prices, characterized by a bearish pricing sentiment. The PP market was notably influenced by weakened demand as winter approached. Sellers actively sought to destock excess inventories in preparation for the upcoming winter season, a period traditionally associated with subdued demand sentiments. This cautious approach reflects the strategic decisions of market players as they navigate seasonal variations and the evolving economic landscape.

In the expansive Asian market, PP prices exhibited a downward trend in most regions, with the exception of Far East Asia, where prices remained flat. Weak demand sentiments and lower upstream energy values exerted a bearish pressure on PP prices. In Southeast Asia, competitive offers from overseas suppliers contributed to a rapid decline in PP prices, with converters anticipating further decreases in the coming weeks. Indian producers, facing high inventories of PP, explored the option of diverting excess material to export markets in the neighboring region, hoping for better netbacks.

As the Indian subcontinent approached December, high inventories led to lackluster demand for PP. Converters focused on winding down business activities ahead of the holidays, creating a unique set of market dynamics. Market members, however, anticipate an uplift in restocking activities post-Diwali, reflecting the cyclic nature of demand in the region.

In Southeast Asia, the buying mood remained dull for the PP, reflecting the cautious approach of market participants. Similarly, the purchase pulse had slackened in other South East Nations, and fresh offers were observed at lower levels compared to previous market conditions. In Far East Asia, buying sentiment remained weak for PP, with some buyers making bargain purchases and market players eager to offload cargo in anticipation of a further decline in PP prices.

Related News

What Causes Polypropylene Prices to Rise in Europe but not in the US and Asia, Feb 2024
  • 28-Feb-2024 1:44 PM
  • Journalist: Emilia Jackson
AkzoNobel Introduces Primer for OEM Plastic Part Production
  • 23-Feb-2024 6:07 PM
  • Journalist: Rene Swann
Expo-Net's Investment in a New Low-Carbon Warehouse in Denmark
  • 23-Feb-2024 4:41 PM
  • Journalist: Motoki Sasaki
Sinopec Yangzi Successfully Restarts Polypropylene Manufacturing in China
  • 21-Feb-2024 2:14 PM
  • Journalist: Li Hua