Polypropylene Prices Surged in the Americas on The Back of Shortage of Supplies

Polypropylene prices surged in North and South America during March 2022 against the backdrop of fewer imports, logistic issues, and a shortage of supplies. Polypropylene prices are majorly mirroring the rise in crude values as manufacturers are left with no option but to transfer the cost pressure upon consumers.

In North America, the values of feedstock Propylene followed the consistent surge in crude values. Polypropylene injection grade prices were assessed at USD 2285 per MT in the week ending 11th March. Crude prices futures rose to more than USD 100 per barrel on 26th February due to the global repercussions of the ongoing Russia-Ukraine crisis. Demand for Polypropylene in the USA has remained firm from segments like packaging and consumer goods with active pickup in the market activities in the region.

In South America, Brazilian Polypropylene Homopolymer CFR import prices have grown considerably since the beginning of the year, reaching new highs. Over the same time, the price of Copolymer grade had also witnessed a minor upward revision of USD 30/MT. During the third quarter of 2022, a spike in Polypropylene prices was noted, owing to the limited availability of upstream Propylene. In January, February, and March, Braskem, the largest local resin manufacturer, announced extra hikes to distributors due to increased raw material bids. The demand for packaging and fibre applications has been strong, which has influenced the rising prices. Polypropylene Homopolymer CFR Brazil prices were quoted as USD 1690/MT, while Polypropylene Copolymer prices settled at USD 1820/MT. Polymer supply restrictions arose because of feedstock shortages and PP maintenance concerns, and because of constrained supply, Polypropylene (PP) has witnessed the most substantial price increases. Furthermore, Brazil's imports of Polypropylene fell 63 percent year-on-year to 11,142 MT, consequently increasing the material shortage in the country.

As per ChemAnalyst, “local demand for PP has consistently increased, but the supply remained at low pace and wasn’t significant enough to satisfy this demand. Therefore, it is expected that the price of Polypropylene will continue to trace an upward trajectory.”