For the Quarter Ending March 2024
North America
The first quarter of 2024 has been marked by a significant decrease in Polypropylene prices in the North America region. Several factors have influenced market prices during this period. These include cheaper imports from overseas, subdued demand from downstream industries such as automobiles and construction, and increased interest rates affecting consumer demand.
Additionally, the ongoing Red Sea crises have disrupted global trade, leading to constrained domestic supply and elevated freight rates. Within the North America region, Mexico has experienced the most significant price changes. The market has been stable overall, with a moderate level of demand from the downstream automobile industry. However, the price of Polypropylene in Mexico has seen a notable decrease of 22% compared to the previous quarter in 2024.
There has also been a 7% price decrease between the first and second half of the quarter. The latest quarter-ending price for Polypropylene Homopolymer Grade CFR Veracruz in Mexico is USD 1050/MT. Overall, the pricing environment for Polypropylene in the North America region during the first quarter of 2024 has been negative, with prices experiencing a significant decline. This is primarily due to factors such as cheaper imports, subdued demand, and disruptions in global trade.
APAC
In Q1 2024, the Polypropylene (PP) market in the APAC region exhibited moderate volatility, primarily influenced by fluctuations in raw material costs and geopolitical tensions. The price trends across the region were shaped by a complex interplay of factors, including rising feedstock propylene costs and changes in crude oil prices. Notably, countries like Japan, South Korea, and Singapore experienced incremental price increases, driven by costly imports and strategic hikes in propylene prices. These adjustments were further compounded by logistical challenges and disruptions in critical shipping routes, such as the Red Sea, which escalated freight and insurance costs, thus impacting the cost structure of PP. China's PP market displayed relative stability despite facing supply chain constraints due to multiple plant shutdowns and the ongoing geopolitical strife, which occasionally tightened supply but did not significantly disrupt market equilibrium. In contrast, India maintained a balance between demand and supply, which helped stabilize prices despite the broader regional trends of increased raw material costs. The overall market dynamics were also affected by seasonal demand variations and the strategic stockpiling of materials in anticipation of future price increases. This behaviour was particularly evident as traders and manufacturers navigated the uncertainties of international trade and raw material availability. The resultant pricing environment in the APAC PP market was characterized by careful adjustments, reflecting a responsive approach to both external market pressures and internal supply-demand alignments. This period highlighted the region's resilience and strategic market management in the face of evolving economic and geopolitical landscapes, setting a precedent for cautious optimism in the face of potential future volatilities.
Europe
In Q1 2024, the polypropylene (PP) market in Europe experienced various price fluctuations, primarily driven by a complex array of factors. Initially, the prices were influenced by disruptions in supply chains and geopolitical tensions that impacted the availability of raw materials, notably propylene. As these issues began to stabilize, the market saw some price adjustments reflecting a slow return to normalcy in logistics and production. However, the relief was short-lived as new environmental regulations introduced across the European Union led to increased production costs for manufacturers, pushing prices upward once again. Additionally, the ongoing energy crisis, spurred by fluctuating natural gas prices, continued to exert upward pressure on production costs. Demand patterns also played a crucial role, with fluctuations observed in key sectors such as automotive and consumer goods, which are significant consumers of PP. Towards the end of the quarter, prices showed signs of stabilization, thanks to improved supply chain efficiency and a slight easing of energy prices, coupled with manufacturers' efforts to adjust to new regulatory environments. This period highlighted the PP market's sensitivity to external economic and political factors, demonstrating how quickly prices can change in response to shifts in supply stability, regulatory changes, and broader economic conditions.
South America
In Q1 2024, the polypropylene (PP) market in South America exhibited dynamic pricing influenced by various factors. The quarter began with stable prices due to consistent import levels, primarily from the USA and Saudi Arabia, which helped maintain a balance in the supply-demand equation. However, the market soon faced volatility, partly due to fluctuations in global feedstock propylene prices and geopolitical developments, such as the resolution of the Red Sea crises which lowered freight costs and impacted import pricing. Furthermore, the reinstatement of antidumping duties on US PP by Brazil introduced additional costs, affecting regional price structures. Economic conditions within the region, including inflation and significant currency depreciation against the dollar, further complicated the pricing dynamics by increasing the cost of imports and affecting purchasing power. Demand patterns also fluctuated, with sectors like automotive and construction showing variable demand, which influenced polypropylene consumption and pricing. Additionally, global market conditions, including a temporary easing of supply chain disruptions, allowed for periods of reduced import prices, although this was not uniformly felt across all South American markets. Trading activities remained cautious towards the quarter's end, as businesses anticipated potential economic shifts and adjusted their strategies accordingly. The combined impact of international market dependencies, local economic policies, and broader economic uncertainties led to a complex and fluctuating pricing environment for polypropylene across South America in Q1 2024.
MEA
The first quarter of 2024 has been marked by increasing prices in the Polypropylene (PP) market in the MEA region. Several significant factors have influenced market prices during this period. The overall trend has been positive, with prices showing a consistent upward trajectory. This can be attributed to various reasons, such as supply disruptions, increased feedstock costs, and strong demand from downstream industries. In Saudi Arabia, the country that has seen the maximum price changes, the trend has been particularly pronounced. Prices have increased by 12% compared to the previous quarter, and by 4% compared to the same quarter last year. This indicates a significant upward movement in prices over time. The price change between the first and second half of the quarter has been recorded at 6%, further highlighting the increasing price trend in the market. The latest quarter-ending price for Polypropylene Injection Moulding FOB Al Jubail in Saudi Arabia stands at USD 948/MT. Overall, the pricing environment for Polypropylene in the MEA region during the first quarter of 2024 has been positive, with prices steadily increasing. This can be attributed to a combination of factors, including supply disruptions, rising feedstock costs, and strong demand. The market outlook for the coming months remains optimistic, with prices expected to continue their upward momentum.
For the Quarter Ending December 2023
North America
During the fourth quarter of 2023, the North American Polypropylene market faced an unexpected downturn characterized by a substantial oversupply of PP within the domestic market and sluggish demand both locally and internationally.
This confluence of factors resulted in a bearish trend in the USA PP market, with low demand from downstream industries and an excess of supply contributing to a prevailing negative market sentiment. The global surge in upstream Crude Oil supply further influenced PP pricing in the U.S., aligning with a broader global trend driven by record production in the U.S., Canada, and Brazil.
Concerns about oversupply were compounded by worries about a weakening economy in China, signalling potential market imbalances. The marginal 0.1% increase in the consumer price index for November and a 3.1% year-on-year rise prompted trader concerns about the Federal Reserve's ability to control inflation. Adding to the challenges, INEOS Group Limited, a major PP producer in Carson, California, unexpectedly shut down its facility with a production capacity of 19,167 tons per month, impacting the overall market dynamics.
APAC
Throughout the fourth quarter of 2023, the Asian Polypropylene market witnessed an overall bearish trend. Despite supply disruptions caused by planned plant shutdowns, the market found support in stable domestic demand and the availability of affordable imports. In Japan, however, a contrasting bullish market trend emerged, characterized by low supply and high demand, leading to an overall increase in prices. The quarter recorded a significant -22% decrease in prices compared to the same quarter last year and a -17% decrease from the previous quarter. The price comparison between the first and second halves of the quarter showed a -3% decrease. Key players in China's petrochemical industry, including Fujian Refining & Petrochemical, CNOOC Huizhou Refining Project Second Phase, Sinopec Zhenhai Refinery and Chemical (ZRCC), and Jinneng Science and Technology, contributed to supply disruptions through planned plant shutdowns. The bearish trend in the Chinese market, compounded by downstream plastic weaving production operating at approximately half its capacity, contrasted with film materials and injection moulding enterprises operating at over 50% of their production rate, resulting in an overall stable market position. However, caution in purchasing activities by terminal enterprises led to subdued trading on exchanges and a noticeable decline in the wire drawing market. The market's performance reflects a nuanced landscape, where varying production rates across different sectors contribute to an overall steady demand for Polypropylene. Still, cautious behaviour among terminal enterprises and reduced trading activity introduces elements of uncertainty and contraction in specific market segments.
Europe
The Polypropylene (PP) market in Europe encountered significant challenges during the last quarter of 2023, characterized by weakened demand and an excess of supply, fostering a bearish sentiment throughout the period. The market continued to grapple with the trend of offloading inventories, as industry players strategically managed stock levels in anticipation of the upcoming winter holidays. Contributing factors to the market dynamics included the prevalence of cheaper imports of PP from overseas, high production costs, and obstacles in trading activities attributed to the winter season. Among European countries, Belgium witnessed the most pronounced shift in prices, experiencing a notable decrease of 7.1% over the quarter. The trend, seasonality, and correlation price percentage in Belgium indicated a stable market situation with a moderate balance between supply and demand. A closer examination of the first and second halves of the quarter in Belgium revealed a decline of 5% in price percentages. As of the most recent quarter, the price of Polypropylene Injection Moulding FD Antwerp in Belgium stood at USD 1052 per metric ton. In summary, the European PP market navigated challenges stemming from weakened demand, surplus supply, elevated production costs, and seasonal impediments during the final quarter of 2023.
MEA
In the fourth quarter of 2023, the Middle Eastern Polypropylene (PP) market faced a bearish situation marked by a decrease in the price of feedstock Propylene by approximately 12.7% during the same period. In the UAE, PP prices consecutively declined over the three months, with drops of 1.3%, 9%, and 6.2%. Multiple factors contributed to this downturn, including the decrease in upstream energy prices, sluggish buying momentum, and a dip in the values of feedstock Propylene. The market experienced a lacklustre buying sentiment, driven by a scarcity of offers from numerous producers discouraged by unfavourable netbacks. This bearish atmosphere was intensified as buyers hesitated to replenish inventories amid subdued demand for end products. Additionally, the global market saw a reduction in upstream Crude Oil prices due to demand concerns and contrary to earlier expectations of additional cuts from OPEC. China's economic slowdown, as the largest energy consumer, continued to negatively impact demand, while increasing crude inventories in the US, coupled with global economic uncertainties, consistently exerted downward pressure on prices throughout the quarter.
South America
During the fourth quarter of 2023, the South American Polypropylene (PP) market experienced a bearish scenario, primarily driven by the reduction in product costs in international markets, particularly in the USA. This bearish atmosphere was intensified as buyers hesitated to replenish inventories amid subdued demand for end products. Additionally, the global market saw a reduction in upstream Crude Oil prices due to demand concerns and contrary to earlier expectations of additional cuts from OPEC. This downturn was also a result of a global slowdown in demand for the product. Both international and domestic markets witnessed a decline in PP prices, alongside subdued demand. As winter approached, the South American PP market especially Brazil faced weakened demand, with a noticeable decrease in inquiries. Despite a modest uptick in consumer activity in the last two months of the quarter, this momentum quickly waned. Market participants, anticipating the winter season, chose to secure inventories, leading to a shift towards need-based purchasing. Sellers, in an effort to trim excess inventories before the expected winter demand dip, contributed to the downward price trend. The market adopted a cautious approach, with participants adjusting strategies in response to seasonal patterns and the overall demand landscape.
For the Quarter Ending September 2023
North America
In the third quarter of 2023, the North American Polypropylene (PP) market exhibited a mixed trend. The US market began the quarter on a bearish note, with a 1% decline in prices, attributed to a simultaneous 2% decrease in the price of feedstock Propylene. This decline in feedstock costs helped reduce the overall production expenses, providing a glimmer of relief amidst the prevalent inflationary pressures. Unfortunately, the persistent inflation made it challenging for consumers to fully indulge in activities such as barbecues and their corresponding beverage consumption. During the early months of the quarter, the market saw an oversupply of PP, and both manufacturers and traders were optimistic about robust summer seasonal demand. However, these expectations fell short as demand failed to keep pace with the ample supply, leading to a continued bearish price trend. Nevertheless, there was a turnaround in the last two months of the quarter, with prices increasing by approximately 3% and 3.5%, respectively. This price rebound was influenced by a concurrent 5% increase in the price of feedstock Propylene, providing some much-needed support to the PP market. Moreover, the market experienced a positive influence from the automotive industry, with the price index for vehicles rising by 0.2% in August, following a similar increase in July. This growth was primarily driven by higher prices for vehicle parts and passenger cars, signifying the vitality of the downstream automobile sector in influencing the PP market during this particular month.
Asia
During the third quarter of 2023, the Asian PP market witnessed a bullish trend, particularly notable in the Chinese sector, where prices surged by approximately 2.5%. This upward price trajectory was primarily attributed to a substantial decrease in the overall supply of PP in the country. The primary contributing factor to this supply crunch was the occurrence of multiple plant shutdowns across China. Prominent facilities such as Sinopec Tianjin Lianhe, Zhangjiagang Yangtze Petrochemicals Co, Hebei Haiwei Group, North Huajin Chemical Industry, and Dongguan Juzhengyuan all faced temporary closures, thereby diminishing the available stock. Amidst these supply constraints, there was a modest increase in demand when compared to the preceding quarter. Downstream plastic weaving production remained relatively stable, and enterprises engaged in film materials and injection moulding continued to operate at approximately half their capacity, thereby sustaining a relatively consistent market outlook. Terminal enterprises adapted to the market by stocking based on demand procurement, and the industry exhibited a gradual warming trend as it entered the traditional peak season. Additionally, the third quarter saw a notable surge in the price of upstream Crude Oil, which escalated by approximately 24%. This uptick in crude oil prices played a pivotal role in elevating the production costs of PP, thereby further impacting market dynamics. These various factors combined to shape the landscape of the PP market in the Asian region during the third quarter of 2023, with supply disruptions, increasing demand, and rising production costs being the key drivers of market trends.
Europe
In the third quarter of 2023, the European polypropylene (PP) market experienced a dynamic pricing landscape marked by fluctuations. The Italian market witnessed an initial 3.8% price decrease, primarily attributed to a 1.1% drop in the price of the essential raw material, Propylene, within Italy. This decline was exacerbated by reduced demand from downstream packaging industries due to inflationary pressures across the region, impacting the product's pricing. Simultaneously, the global market saw a decline, compounding the challenges faced within Italy. However, the latter part of the quarter brought some relief, as the price of PP increased by 1% and 2.5% in the last two months. This upswing was driven by an improved global trading outlook, even though domestic demand in Europe remained modest. Meanwhile, a 24% increase in the price of upstream Crude Oil posed a challenge to production costs, further contributing to the bullish trend in the European PP market. The United States, a key supplier of PP to Europe, experienced severe supply chain disruptions during the quarter due to a hurricane. Critical components of the supply chain, such as airports, marine cargo ports, and distribution hubs, ceased operations or reduced activities, leading to supply constraints. Major parcel delivery companies also temporarily closed facilities and experienced ongoing service disruptions, especially in affected areas like Florida and Georgia. These logistical challenges exacerbated supply issues in the European PP market, creating additional obstacles for the industry during the quarter.
South America
During the third quarter of 2023, the South American PP market witnessed a fluctuating landscape. In the United States, the price of Polypropylene (PP) experienced an initial 1% decline, mainly influenced by decreasing product costs in international markets, particularly within the USA. This drop was further exacerbated by the price fluctuations of Propylene, which had a direct bearing on Polypropylene prices in Brazil. However, despite these challenges, the supply of PP within Brazil remained relatively moderate to high, ensuring a balanced market environment. The demand from the downstream BOPP Film industry remained steadfast, displaying resilience against these price fluctuations. Nevertheless, in the final two months of the quarter, the Brazilian PP market turned bullish, primarily attributed to a substantial 5% surge in the price of its feedstock, Propylene, within the same period. Furthermore, the price of upstream Crude Oil also saw an increase in Brazil, contributing to the overall price trend of PP. Despite these fluctuations, the demand for PP in the country remained relatively stable, although some upward pricing pressures were observed. In terms of economic policy, Brazil's central bank made a notable move by reducing its benchmark interest rate by half a percentage point for the second consecutive time, lowering it to 12.75%. This decision underscores the central bank's commitment to combat inflation, which has consistently remained below its target.
Middle East
In the third quarter of 2023, the Middle Eastern polypropylene (PP) market displayed a mixed pattern. Initially, the Saudi Arabian PP market experienced a 1.5% price decrease, primarily due to increased PP supply resulting from cheaper feedstock Propylene prices and a weaker demand attributed to the economic slowdown. Additionally, lower prices of PP substitutes further eroded its demand. However, the latter part of the quarter saw a reversal, with PP prices increasing by 1.6% and 1.7% due to a bullish trend in feedstock Propylene prices, closely linked to a 24% surge in Crude Oil prices. This shift in oil prices can be attributed to the decision of OPEC+ to maintain production cuts in Saudi Arabia and Russia, resulting in inventory declines and positive implications for the oil market. Notably, the US Energy Information Administration reported a significant 17.049 million-barrel drop in crude oil inventories, reaching a total of 440 million barrels. The reduction in finished oil storage, particularly in gasoline inventories in the US, signifies a positive trend. These developments will likely continue to influence the PP market as we enter the fourth quarter.
For the Quarter Ending June 2023
North America
During the second quarter of 2023, the North American Polypropylene market experienced a decline in prices. In the Mexican market, the price of the product decreased by around 5.5%, 6.3%, and 5.2% during this quarter. This drop was primarily influenced by the decrease in the price of feedstock Propylene, which fell by approximately 17.5%, 13%, and 10% in April, May, and June, respectively. The declining prices of crude oil, the upstream for Polypropylene, also played a significant role, falling by around 9% and 3% in the last two months of the quarter. Global economic concerns and the possibility of interest rate hikes in the United States and Europe further impacted oil prices in June 2023. Despite these challenges, US companies signaled a further expansion of business activity at the end of the second quarter, although the rate of growth slowed to a three-month low. Manufacturers experienced a renewed contraction in production, while service providers saw a slower pace of growth. As a result of subdued demand, firms sought to run down their stocks and reduce input purchasing in June, with input buying falling at the steepest rate since January. Both pre-and post-production inventories declined sharply. Similarly, international demand saw a sharp fall in new export orders for manufacturers, while service sector firms recorded another marked monthly upturn in new business from abroad. By the end of the quarter, the price of Polypropylene Random Copolymer CFR Veracruz (Mexico) was recorded at USD 1377/MT.
Asia
The Asian Polypropylene market experienced a bearish trend during the second quarter of 2023. In South Korea, the price of Polypropylene decreased by approximately 2.8%, 1.4%, and 7% in April, May, and June, respectively. Similarly, in the Singapore market, the Polypropylene market experienced 12% negative growth throughout the quarter. The decline in Polypropylene prices was attributed to low-import costs offered to Singaporean traders, leading to a shift in market sentiment towards sluggishness. Furthermore, the drop in feedstock prices, which declined by approximately 0.5%, 4%, and 13% in April, May, and June, respectively, contributed to the downward pressure on Polypropylene prices. Demand from downstream producers, particularly in the construction and automobile industries, remained low as they refrained from stocking up ahead of the Labor Day Holiday. In China, the price of Polypropylene Raffia EXW Dalian declined by 6% during the quarter. The upstream market for Polypropylene witnessed falling prices across the board, with liquefied gas and crude oil prices dropping significantly. The main downstream BOPP Film also continued to decline, exerting a negative impact on the Polypropylene market. South Korea's economy showed signs of slowing down, particularly in exports and manufacturing, further contributing to the bearish sentiment in the region.
Europe
In the European market, the price of Polypropylene experienced a bearish trend during the second quarter of 2023. Prices for Polypropylene in Belgium, represented by FD Antwerp, declined by approximately 3% and 4% in May and June, respectively. This mirrored the drop in crude oil prices during the same period, influenced by lingering concerns over a slowdown in the global economy and potential interest rate hikes in the US and Europe. The demand from downstream industries, especially the construction and automobile sectors, remained lackluster, leading to an oversupply of Polypropylene in the European market. Supply chains across the eurozone construction sector improved significantly at the end of the second quarter, with notable reductions in average lead times. Additionally, Germany experienced a series of record improvements in vendor performance. Competition from smooth and cheaper imports of Polypropylene from countries like Saudi Arabia and the United States further impacted the European market. The region also faced a cost-of-living crisis that affected consumer purchasing power and demand for energy-related products. However, in April, the price of Polypropylene in the Belgium market increased by around 1% as the price of upstream crude oil rose by approximately 3.75% in April 2023.
Middle East
The Saudi Arabian Polypropylene market experienced a bearish trend throughout Q2 2023, with prices decreasing by approximately 1.5%, 1%, and 7% in April, May, and June, respectively. This decline was influenced by the fall in feedstock Propylene prices, which dropped by about 1.5%, 8%, and 6% in the same months, impacting the overall feedstock cost. Saudi Aramco's decision to cut propane prices in June had a cascading effect on the downstream derivative industries, including the Polypropylene market. Additionally, the Middle East faced ample supplies and low demand from China's petrochemicals industry, adding further pressure on market sentiment. The optimism surrounding demand growth faltered as oil prices remained under pressure despite Saudi Arabia's surprise output cut. Concerns over a weak global economic outlook and increased Russian oil flows and US production also contributed to bearish market sentiment. By the end of the quarter, the price of Polypropylene Injection Moulding FOB Al Jubail (Saudi Arabia) was hovering around USD 856 per metric ton.
South America
The South American Polypropylene market experienced a bearish trend in the second quarter of 2023, with prices declining in the Brazilian market by approximately 5.3%, 6.8%, and 5.6% in April, May, and June. This drop in prices was attributed to the decrease in feedstock Propylene prices, which fell by around 18%, 14%, and 10% during the quarter. The downturn was driven by lackluster demand from downstream industries, particularly the construction and automobile industries. Cheaper imported cargoes from the United States and Russia impacted the smooth flow of products into Brazil. The country also faced economic challenges, with an increased inflation rate affecting the demand for Polypropylene during this period. High inflation and a slowdown in the manufacturing sector significantly impacted the chemical industry's operations. Manufacturing contracted for the seventh consecutive month, and the Central Bank of Brazil considered further rate hikes to address inflationary pressures. At the end of June 2023, the price of Polypropylene Random Copolymer CFR Santos (Brazil) was hovering around USD 1282 per metric ton.
For the Quarter Ending March 2023
North America
In the first quarter of 2023, Polypropylene prices experienced an upward trend in the North American region due to strong market sentiments. A decent trading environment was observed due to consistent demand from downstream packaging and textile industries. Meanwhile, the Polymer grade Propylene remained on the higher side amid high WTI crude oil prices, providing cost support to the Polypropylene market. While supplies had tightened, some distributors had material on hand to fulfill the total demand, and the cost-push increases continued to endure. As a result, the prices of Polypropylene for FOB Texas were evaluated at USD 1543/MT for Copolymer Injection Grade and USD 1433/MT for Homopolymer Injection Grade on March 31.
Asia- Pacific
During the first quarter of 2023, Polypropylene prices in the Asia-Pacific region showed a mixed trend. Despite rising Propylene prices, the Polypropylene market in China had a bearish start to the quarter due to a lack of demand in the domestic market ahead of the Lunar New Year holiday. Prices rose after the break as market players replenished available material due to a minor rebound in demand from downstream textile and packaging businesses. With robust operating rates and a constant flow of imports from other Asian nations like South Korea and Singapore at Chinese ports, inventory levels in the domestic market remained high. Towards the end of the quarter, several Polypropylene suppliers were willing to destock their large inventory, due to which they decided to trim the prices. Therefore, the prices for Raffia grade EXW Dalian and Random Copolymer CFR Shanghai settled at USD 1130/MT and USD 1360/MT on March 31.
Europe
Polypropylene prices showed fluctuation in the European region during the first quarter of 2023. In the first two months of Q2, the overall prices of Polypropylene in the German market took an unprecedented decline due to declining demand from the downstream industries. In terms of supply, inventories were relatively adequate due to high operating rates and the continuous flow of imports from the overseas market. Despite this, market participants reported few instances of new orders from packaging industries. However, Polypropylene prices started to follow an increasing trajectory in the final month of Q2 because market sentiment had slightly improved. In addition, operating rates remained stable in the domestic market owing to high consumption from downstream industries. Therefore, the price of Polypropylene for FD Hamburg reached USD 1700/MT for Copolymer Grade on March 31.
For the Quarter Ending December 2022
North America
The prices of Polypropylene (PP) in the American market decreased during the fourth quarter of 2022, mirroring the price trend of PP in the US during Q3 2022. The manufacturer's efforts to increase the commodity cost by decreasing the production rates in the domestic market were not able to increase the prices of PP in the US due to the poor demand from the domestic market. The rising value of the US currency further contributed to the declining price trend by weakening the buying sentiments from the importing countries. The relatively poor performance of the downstream sector in the US abetted the decline of PP prices in the US.
APAC
The prices of Polypropylene (PP) in the Asian markets were recorded to decline throughout the fourth quarter of the Asian markets except for the Chinese market, which witnessed a rise during the last month of Q4 2022. The poor demand from the largest importing Chinese market due to weak economic conditions and poor performance of the downstream industries has been the primary reason behind driving down the prices of PP during Q4 2022. However, the sudden demand hike for melt-blown products in the Chinese market, along with the rise in Polymer Grade Propylene (PGP) prices, led to a slight PP price hike in China during the end of Q4 2022.
Europe
The prices of Polypropylene (PP) in the German markets declined during the first two months of Q4 2022 on the back of poor demand. The poor performance of the downstream textile and packaging sector is the reason behind the declining demand scenario for PP in Germany. However, the prices of PP recovered and showed a slight rise in the German market during the end of Q4 2022 because of the price reaching the bottom in mid-Q4 2022. The rising energy and operation costs in Germany drove up the prices despite de-stocking occurring at the year-end. The rising price trend of upstream Polymer Grade Propylene (PGP) during the end of Q4 2022 abetted the increasing price trend of PP during the same time period.
For the Quarter Ending September 2022
North America
The US witnessed an oversupply condition of Polypropylene (PP) during the start of the third quarter of 2022. The Asia Pacific region's subdued demand had a substantial negative psychological influence on domestic businesses, compelling them to lower their operating rates in the domestic market. The price of PP during the beginning of Q3 2022 was recorded at around USD 2127/MT PP Homopolymer Injection Grade FOB Texas. The market sentiments for PP in the US remained weak for the next two months of Q3, similar to the beginning of the quarter. The unexpectedly weaker demand from the international market led to an overall dynamic in the spot markets to be gloomy throughout Q3 2022.
APAC
In the third quarter of 2022, Polypropylene (PP) prices in the Chinese market witnessed a steep decline throughout Q3 2022. The strong inventory level in the domestic market aided the price drop of PP during the third quarter in China. The prices of PP in exporting Asian markets like Japan, South Korea, and Singapore weakened throughout the third quarter due to poor demand in the major importing market (China). The lower export rates to China drove down the cost of PP in the domestic markets of Japan, South Korea, and Singapore. The price of PP in Japan during the start of the third quarter of 2022 was recorded at around USD 1517/MT Polypropylene - Homopolymer FOB Tokyo.
Europe
Due to resource scarcity and growing raw material costs, the European Union's decision to impose an embargo on the Russian energy supply caused extremely high inflation on the domestic market, further blowing the market dynamics. The producers were obliged to reduce the offerings because there was no discernible growth in demand, causing the demand to decline as consumers become more cautious about the market. The Prices of PP in the European region were low due to poor activities in the downstream industries. The cost of PP in Germany during the start of Q3 2022 was recorded at around USD 2173/MT Polypropylene Injection FD (spot) Hamburg.
For the Quarter Ending June 2022
North America
A couple of Force Majeures, one in Louisiana and another in California, have impacted supply dynamics, but the limited supply did not have much of an effect on the spot market price of PP in the US. Prime quality resin imports were insignificant, with most of the rail cars moving off-grades of Homopolymer, Copolymer, and Random Copolymer in almost equal volumes. Due to this imbalance, the region has shown no signs of recovery in the short term since the first quarter. The demand, especially from importing Asian and European markets, was weak, contributing to decreasing price trend of PP during the second quarter of 2022.
APAC
Polypropylene prices in Asia continued to increase till mid-Q2 on the back of Steady demand from downstream textile and Packaging industries. China's domestic market has moved on a downward trajectory amid the COVID restrictions imposed in northeast China at the end of Q2 2022, which have weighed on the entire value chain across China. Limited market mobility has also impacted overall domestic market demand, reducing the operating rates of domestic power generation facilities. As a ripple effect, the collective mentality of domestic players is less interested in foreign polypropylene supplies, dampening the prices of PP in China. Major Asian PP markets price trend followed China's price trend as China imports from several Asian countries with increasing prices during the start of Q3 but decreased during the end.
Europe
Polypropylene prices in Europe rose throughout the second quarter of 2022 as the overall Polypropylene market in Europe has observed a significant upward trend amid the changing upstream energy value chain. Conflict in Eastern Europe and retaliatory sanctions by the US and EU against Russia. The firm stance of European buyers in procuring Russian Black Sea goods is compounded by higher tariffs on the Suez Canal, which has further supported the price hike of shipments from the Middle East. As a stimulus effect, the price of polypropylene in the European market increased steadily throughout the second quarter of 2022.
For the Quarter Ending March 2022
North America
In North America, the prices of Polypropylene increased in Q1 2022, with a decline at the beginning of the quarter in conjunction with prices hovering around USD 1957/ton PP Homopolymer Injection Grade FOB Texas in the USA due to low demand from the downstream sector and a decrement of 2.4% in the first quarter as compared to the previous. However, the prices were increasing by February against the backdrop of fewer imports, logistic issues, and a shortage of supplies. Due to the rise in crude values, polypropylene prices were majorly growing as manufacturers were left with no option but to pass on the cost pressure to consumers. The USA contributing around 6.15% of the world's total Polypropylene exports, saw an increase in freight charges due to the ongoing Russia-Ukraine war.
Asia Pacific
Asia saw an increase in the price of Polypropylene (PP) in the first quarter of 2022, with a spike of 6.2% in February and prices hovering around USD 1592/ton-USD 1702/ton Injection moulding Ex-Silvassa. However, there was an overall decrease of 2.3% in Q1 as compared to the last quarter of the previous year. China, which is importing around 17% of the world's total Polypropylene, saw an escalation in the shipment and freight charges. Energy prices have been on the rise, adding to the cost pressure on the Polypropylene market. However, despite an increase in inventories, pricing dynamics for the product did not decline and followed the path of the market price in an upward trajectory.
Europe
During Q1, the price of Polypropylene escalated upwards throughout February and into March, as a shortage of natural gas supplies combined with soaring crude oil prices caused most of the refineries in Europe to run on negative cash margins since the last week of January. Feedstock propylene monomer prices have come under pressure due to higher naphtha prices since the last week of February as the onset of war in eastern Europe. Naphtha crack spreads, too, have come under pressure due to higher energy costs and a rise in feedstock crude oil prices. Polypropylene Injection prices for March were assessed at USD 2020/ton FD Hamburg, with a 6.6% decrease in the prices in Q1 compared to the previous quarter in Germany.
For the Quarter Ending December 2021
North America
Polypropylene market in North America saw a reduction in overall demand for the quarter ending December compared to Q3 of FY21. The propylene to polypropylene spread had narrowed significantly by the closing weeks of December normalizing any worthwhile gain in margins accrued by manufacturers and distributors during the months of September and October taking advantage of the historically high freight charges during that period. The second half of Q4 saw a decline in demand for polymers which is a general phenomenon ahead of the holiday season. As per our initial assessment for Q1 of FY22, the propylene to polypropylene spread had further narrowed due to polymer markets across South Asia, Middle East and North America reeling in doldrums amidst the new wave of pandemic disrupting both domestic and overseas demand. Prices of polypropylene are expected to rebound during the early to mid-February period when North America and Europe typically face disruption in value chains due to higher energy costs as well as the cold snap in Texas.
Asia
The North-East Asian polypropylene market saw a reduction in demand during Q4 of FY21 after having started off on a strong note in the month of October. Spot prices had reached an inflection point during the first week of November and have started falling since. Prices of Raffia, Injection and random copolymer have seen a decrease of 3% on an average from Q3 to Q4. Imports into China had plummeted to the tail end of Q4 when the Chinese government started issuing strict COVID control protocol which led to clogging of major container terminals such as Ningbo. Although production and supply had been tight in the new year leading to a hike in prices, prices are expected to come down by the end of January ahead of the lunar new year holidays. The long-term outlook for Q1 of FY22 however looks bullish. Indian polypropylene market had a similar trend to that of its Asian counter parts as prices reached an inflection point by the second week of November. The down trend in spot prices continued till the end of Q4 and could continue into Q1 of FY22 as the continued clogging at major ports in Northeast Asia means that there could be a further fall overall demand and the surplus produce will have to be channelized into the domestic market. Import prices of Raffia MFI3 from the middle east too had softened by the mid to third week of November FY21.
Europe
European polypropylene market had made marginal gains in Q4 of FY21 compared to the previous quarter as average price for polypropylene copolymer increased by 2% assessed on an FD Hamburg basis. The propylene to Polypropylene price spread widened during Q4 as there was higher arbitrage margin for imports from the middle east compared to prices from the regional suppliers which lead to a surplus of propylene in the European market. The spike in energy costs from the first week of December did not have much of an impact on the prices of polymers as demand reduced ahead of the holiday season in Europe and had offset any upward pressure on the prices. The outlook for Q1 of FY22 remains uncertain as the volatility in polymer market had been remarkably high in the new year due to the onset of the new wave of pandemic which led to disruptions in global supply chains leading to a disruption in market signals. Domestic demand is expected to be the driving force for the upcoming quarter while overseas demand could recover by the end of February Fy22.
For the Quarter Ending September 2021
North America
In North America, surge in the prices of Polypropylene was observed during the third quarter of 2021 backed by the constraint availability of upstream Propylene. Supply of Propylene remained tight in the US market as several manufactures were compelled to shut their production units as a repercussion of Ida hurricane in August across the Gulf Coast in US. For instance, Phillips 66 imposed a temporary turnaround at its Propylene facility in late August as a part of the contingency plan. Moreover, firm demand from the downstream sectors aided the pricing trend in this quarter.
Asia Pacific
In Q3 2021, Polypropylene (PP) market outlook appeared bullish with robust demand and tight supply in the Asia Pacific region. Constant increment in the prices of Polypropylene was backed by surging prices of key feedstock Propylene. In addition, sudden plant outages in the region led to the scarcity of the product that further aided the pricing trend. For instance, Neftekhim Limited in Kazakhstan’s, declared a maintenance turnaround at its Polypropylene plant in September end, for around a month. In India, Polypropylene fundamentals gained edge because of the supply shortage at international levels due to the constraint availability of the upstream Propylene. Ex-Silvassa Polypropylene prices settled at USD 1555.11 in September.
Europe
During the third quarter of 2021, Polypropylene market in Europe witnessed a downward trend backed by the ample availability of the product amidst its dampened demand. In the European region, improved import rates and higher production rates led to the adequate supplies of PP in the region that consequently declined its prices. Moreover, by the middle of the quarter due to the energy crisis across the region various downstream manufacturers were compelled to cut the operating rates which resulted in slowed market activities. Polypropylene prices thus declined to USD 2270 per tonne from USD 2492/MT in July to September time frame.
For the Quarter Ending June 2021
North America
During the second quarter of 2021, the industrial infrastructure recovered from the devastating impact of the winter storm Uri, and all Polypropylene (PP) production units returned online with improved operating rates. As a ripple effect, PP supplies in the North American market surged compared to the previous quarter, however some tightness was seen during April. Several US polymer producers announced positive revision in the prices due to continued tightness of the raw material. Formosa plastics surged the prices of all grades of Polypropylene resin by USD 110 per tonne in May. The demand was bolstered by pick-up in the manufacturing sector and rising requirement of the consumer durable goods. FOB Texas discussion for Polypropylene Homopolymer injection moulding grade settled at USD 2995 per tonne in June.
Asia Pacific
Polypropylene (PP) supplies in the Asia Pacific region surged during the second quarter of 2021, with the industry reporting normal operations and high pressure over the key feedstock Propylene due to the rising inflation rate in Chinese commodities. May Day holidays and power shortage in South China’s Guangdong province further tightened the market supplies. India’s deadly COVID second wave had a devastating impact on the industrial and commercial activities for a larger part of Q2, hence the country reported a much-needed ease in its Polypropylene resin offers. Resurgence of COVID infections and lower offtakes from the southeast Asian markets reduce the demand outlook, sending ripples to the prices of Polypropylene throughout Asia Pacific. FOB Qingdao pricing discussion of PP raffia grade settled at USD 1263 per tonne in June.
Europe
At the start of Q2, the European Polypropylene market faced acute polymer shortage, which hit numerous small and medium enterprises (SME) and around 90% of the European converters. Therefore, PP supplies remained largely tight throughout the second quarter of 2021. The import situation from the US improved but the fewer and high-priced import shipments were insufficient to fulfil the domestic demand. Several consumers headed towards Chinese suppliers to fill-in the supply gaps. Polypropylene raffia grades prices settled at USD 1914 per tonne for the July delivery.
For the Quarter Ending March 2021
North America
In the first quarter of 2020, the supplies of PP became affected as several US producers bound the margins for the downstream converters due to surged demand and limited stock availability throughout the region. Freezing temperatures brought various petrochemical and polymer production units to shutdown including the ones of global giants such as LyondellBasell and INEOS olefins & polymers. Amidst persistent shortage, PP prices witnessed multi-fold surge in February, thereby prompting several buyers to turn to imports from the Asian markets. Rates of PP Injection Moulding grade spiked by nearly 40% between Jan-March. FOB Louisiana (USA) PP IM grade price was recorded above USD 2400 per Mt in the last week of March.
Asia-Pacific (APAC)
The supply of Polypropylene stood balanced in the northeast Asian region during the Q1 2021. The addition of four new facilities in China and the resumption of major key facilities in South Korea, added to the regional supply. However, the southeast Asian region witnessed constrained supplies amidst lack of overseas imports. The demand in India surged due to increased consumption from the downstream market to manufacture surgical masks followed by resilient demand for BOPP films from packaging sector. The increasing trend was further pushed by high crude prices which crossed USD 60 per barrel in March. The CFR prices of Polypropylene Raffia grade in the Indian market was averaged around USD 1633 per tonne in Q1. The emergence of new COVID-19 variants in several parts in Asia, however kept the sentiments raised by the downstream converters.
Europe
During the first quarter of 2021, PP supplies remained constrained, as a ripple effect of the tight supply of feedstock propylene due to the slump in production amid the ongoing pandemic and lockdown restrictions. Whereas the strong consumption from the downstream packaging and automotive sector, surged the demand of PP in the European region. The tight supply amid the surged demand concluded a triple digit rise in the prices of Polypropylene in the Europe.
For the Quarter Ending September 2020
North America
North America remained silent in terms of showing any big move as several US manufacturers remained shut and production loss aggravated. Two major players LyondellBasell and INEOS declared force majeure on polypropylene (PP) production during the quarter while they opted for precautionary shutdowns ahead of the hurricane Laura, thereby restricting global availability of the product. Polypropylene prices took a substantial leap during the quarter with limited export activity with major increases expected in the next two months.
Asia
The Q3 results of the Asian Polypropylene remained lull despite gradual pick up in the economy in the third quarter. In southeast Asia and India, fears of a second Covid-19 wave extended semi-lockdowns in several countries, pressuring the recovery in demand for the finished plastic products. Polymer prices in southeast and south Asia remained suppressed in the mid-August because of weak fundamentals but rebounded in the initial weeks of September when supply tightened due to lesser US-origin PP supplies to Asia backed with robust PP demand in China.
Europe
PP demand seemed to improve during Q3 2020 with the demand in Europe gradually improving towards the end of the year, turning notably stronger than in Asia. Resilient demand from the automotive and medical sector further strengthened the market outlook. Total’s force majeure on the PP plant, announced in early August, did not impact the market negatively, as other producers reported lesser inventories while buying activity seems turning largely to pre-pandemic levels in the upcoming quarter.
