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Tight supply keeps Polypropylene prices to record high level in Europe

Tight supply keeps Polypropylene prices to record high level in Europe

Tight supply keeps Polypropylene prices to record high level in Europe

  • 15-Dec-2021 12:04 PM
  • Journalist: Motoki Sasaki

For the December month, FD Hamburg prices of Polypropylene in Germany surged to $2355/ton for Copolymer grade and $2330/ton for injection grade, showing a month-on-month inclination of 5.13% and 4.71% respectively. As per market players, backlog of orders and increased mobility have kept the purchasing activity robust over the past month and rising energy cost has significantly contributed to this bullish run. Downstream purchasing has also seen uptick due to increase in its consumption in food packaging and pharma products. Automotive and construction sector are also driving demand across various segments.

On weekly basis, the market can see a marginal fall in the PP Free Delivered prices at around $2210/ton for Copolymer grade and $2260/ton for Injection grade at Hamburg port. Feedstock Propylene prices have significantly declined this week due to fall in crude futures and improved availability amid returning capacities in Europe. Brent crude oil prices eased to $74.20 per barrel, showing a loss of 0.26% at 06:54 am CDT intraday after gaining pace initially during the week.

According to ChemAnalyst, overseas PP suppliers will likely fetch strong netbacks from European countries in the coming weeks. Improvement in the domestic market will push the producers to increase their prices of Polypropylene. Downstream market is expected to grow in the coming months especially as demand for food packaging picks up. US PP offers are expected to put pressure on the European spot market considering delayed deliveries. The transaction atmosphere is expected to improve, and buyers will show more interest for the bulk purchases of Polypropylene.

Polypropylene is a crystalline thermoplastic which is produced from Propene monomer. It is produced from polymerization of Propene. Majorly there are two types of Polypropylenes namely, Homopolymer and Copolymer. Main applications of Polypropylene are their utilization in plastic packaging, plastic parts for machinery and equipment. They also have wide application in bottle, toys, and housewares. Saudi Arabia is the major exporter of PP sharing 21.1% contribution in the global market. In the European market, Germany and Belgium contributes 6.28% and 5.93% exports to the rest of the Europe.

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