The propylene prices in Germany have again declined significantly during the fourth week of May 2025 on the back of low demand from the downstream polypropylene sector. Overall market sentiment was negative, fueled by ongoing macroeconomic uncertainties, elevated inflation in parts of Europe, and a sluggish recovery in crucial sectors like polymer.

Key Takeaways:

• Due to slower export and domestic demand, propylene prices continued to fall in May 2025.
• The downstream polypropylene market continued to decrease.
• The cost of producing propylene decreased when the price of the feedstock oil dropped.
• The fundamentals of supply and demand were impacted by ongoing tariff uncertainties.

As per ChemAnalyst, the propylene prices in Germany could further decline before the beginning of the third quarter of 2025. The trading atmosphere would decrease due to the lull-shipping season and export orders are foreseen to hamper during this period.  

While doing the recent assessment, propylene prices in Germany dropped by 4.5% till the fourth week of May 2025 when compared with the last week of April 2025. This declining trend has continued since the middle of March when market sentiments have started to fall drastically due to tariff uncertainty.

As participants awaited the settlement of the May monthly contract price, trading activity in the European propylene spot market stayed muted, leading to few transactions and low trading volumes. The cautious purchase tactics used in expectation of smaller contract settlements were primarily responsible for this market behavior. As a result of the downstream polypropylene market's poorer performance, vendors found it more and more difficult to keep their margins.

Additionally, the attractiveness of importing propylene at competitive prices from Asia and the Middle East kept pushing the European domestic market down. Due to their effective cost reduction, increased competitive pressure on domestic European producers, and overall contribution to the decrease in propylene prices.

Additionally, as crude oil is the primary feedstock, a notable decline in WTI and Brent crude oil as May gets underway has lowered the cost of producing propylene. The belief that higher production from Saudi Arabia and other OPEC+ members may maintain low crude prices was a major driver.

However, unexpectedly, have rebounded by 1.1% during the second week of May 2025. This price increase was not attributed to a rise in demand, but the initiation of maintenance work at the Gonfreville steam cracker, operated by the French energy and petrochemical firm TotalEnergies, which resulted in a temporary decrease in supply from this key production site.

Nevertheless, despite this price recovery due to supply-side issues, overall market activity remained subdued, with participants showing a general lack of interest in purchasing.