The US Polypropylene Market gets a respite from softening Feedstock Prices
The US Polypropylene Market gets a respite from softening Feedstock Prices

The US Polypropylene Market gets a respite from softening Feedstock Prices

  • 14-Apr-2022 8:47 AM
  • Journalist: Patrick Knight

The first two weeks of April saw crude oil prices soften on the back of deadlock in the Russia-Ukraine war and IEA members promising to release 60 million barrels of crude oil over the next six months. The WTI benchmark index has gone below the USD 100 mark in the first week of April after peaking out mid-week at just about the USD 103/b level. Most polypropylene (PP) producers have initiated their planned cost-push for the April forward month contracts by the last week of March in response to a 20% rise in crude oil prices in a span of one week.

Feedstock Polymer Grade Polypropylene (PGP) spot market saw increased offtakes in the first week of April, with transactions priced as high as USD 0.73/lb at the start of the week before falling to USD 0.67/lb by the end of the week. The Natural gas market, however, showed no signs of softening as higher coal demand, global supply concerns and tightness in supply have all combined to lift the prices well over the USD 6/MMBtu mark by the end of the first week of April. The Natural Gas Liquids (Market) responded to the cost pressure from upstream Natural gas prices with propane and Ethane making substantial gains over the week.

High volatility in the monomer market and supply constraints had an impact on the polypropylene spot trade volumes in the first week of April. Spot trade volumes of Homopolymer PP (HoPP), Copolymer PP (CoPP), and Random Copolymer (RCoPP) reached their highest values in more than a month. Prime PP prices saw a decline of USD 0.10/lb in the first week of April. While imported Prime PP stocks were sparse, most resin transacted during the week ended up being off grade.

The coming weeks could see spot prices improve in expectation of an uncertain energy market (natural gas) combined with global supply concerns. Crude oil prices too are expected to maintain healthy range limits of (USD 95/b to USD 105/b) for the month of April. With producers hesitating to implement further price push in their April offers, prices of PP are expected to follow the monomer market for the next couple of weeks.

Related News

Grace Licenses Innovative UNIPOL Polypropylene Technology to BPCL
  • 20-Jun-2024 11:49 AM
  • Journalist: Sasha Fernandes
LyondellBasell Enhances Polypropylene Compounding Capacity in China
  • 18-Jun-2024 5:08 PM
  • Journalist: Harold Finch
Global Polypropylene Price Trends: Decline in US, Increase in Europe, Stability in Asia
  • 28-Mar-2024 3:05 PM
  • Journalist: Emilia Jackson
US and Asia PP Prices Rise Amidst Rising Demand and Freight Charges
  • 05-Jun-2024 5:30 PM
  • Journalist: Patrick Knight