Tepid Market Dynamics Oscillate The Prices Of Polypropylene Across The Globe
- 29-Jun-2022 5:20 PM
- Journalist: Jacob Kutchner
Houston, USA- Continued downward pressure from downstream fundamentals results in another weekly decline in Polypropylene (PP) prices. Constant price erosion in the feedstock propylene due to fluctuations in the Natural Gas market resulted in such a price trend.
With all fundamentals indicating that Polypropylene prices should be coming down, producers have no choice but to discount prices to decrease their inventories. Feedstock costs are down, and significant producers face challenges maintaining their sales and revenue. With the week ending on 24th June, the price of Polypropylene in the USA slipped to USD 2220/ton (Injection Grade) FOB Texas.
Despite an explosion in the Freeport LNG terminal on 8th June, the gas availability in the US has increased due to lower demand, leading to a sharp drop in the US Gas prices. With limited natural gas exports to the global market, oversupplies in the US market affected the price.
New production capacity from Inter Pipeline's Heartland office in Canada will likely contribute to an adequate supply overhang. Supply deficiencies for colorants, additives, and corrugate are still along with logistical delays. However, this has not been sufficient to counterbalance the long market run and feeble demand.
EU producers continued to cut prices of Polypropylene as demand has been rather lackluster. Prices of Polypropylene may even be lower with weak market sentiments and sufficient product availability.
Asian Polypropylene (PP) market also saw a price decline as muted demand prompted by a seasonal slowdown resulted in a price revision. With the week ending on 24th June, the price of Polypropylene slipped to USD 1613/ton (Random Copolymer) Ex-Silvassa.
According to ChemAnalyst, the price of Polypropylene in the global market will slip further due to oscillation in Natural Gas prices. Downstream Plastic industries remain affected due to limited purchasing and deterred trading environment. Polypropylene (PP) spot prices will continue to descend, leading to another fall in July contract prices and a decrease in monomer, showing no sign of letting up.