Will Polypropylene Prices in the US Witness a Hike During October 2022?
- 10-Oct-2022 6:00 PM
- Journalist: Patrick Knight
The polymer prices in the US were dull during September 2022, and Polyethylene, like LLDPE and LDPE, prices were stable for the last five weeks, whereas Polypropylene (PP) prices have been on a constant decline for the last seven weeks. The difference in the pricing between PE and PP emphasizes a fundamental change in approach between selling PE and PP from the producers during the current scenario of polymer over-supply in the US.
Trading in Polypropylene was highly sluggish as a deluge of resin continued to flood the market while buyers largely stood by and effectively baited providers with ever-declining bids. Low demand brought attention to the significant inventory overhang and kept spot and contract prices under downward pressure. PP spot contracts were highly available, ensuring buyers that prices would likely remain low.
PE producers have cut back on production while mainly relying on the export market to reduce record-high inventory levels. They have been somewhat effective in lowering their resin stockpiles and stopping the fall in prices that are already marked down, and despite the above measures, price continues to decline even as contracts are following the same trend. Dow is the latest manufacturer to join the decision behind increasing PE prices in the US after Chevron Phillips. Contrarily, makers of Polypropylene increased their production in July and August, pushing up stocks to nearly record levels just as new production began. Although there was a noticeable decline in PGP monomer costs in September, indicating a decrease in PP operation cost, PP prices in the US have already reached a point where further easing prices is improbable.
According to ChemAnalyst, the prices of PP stopped their declining trend and were recorded as stable in the first week of October 2022. Our sources stated that manufacturers take several measures to decrease operation costs, such as lowering production rates and consuming fewer upstream resins and monomers. If the manufacturers stick to these new changes in production, there are high chances of a hike in PP prices in the US.