For the Quarter Ending June 2025
North America
• The Polypropylene (PP) spot price decreased by approximately 10.9% quarter-over-quarter in Q2 2025, reflected in a declining Price Index
• Low demand conditions from the primary construction, automotive and packaging sector continued to impart a downward pull on the prices
• Procurement activity remained as per need only basis due to lower offtakes from the paints and coating sector which kept the bearishness of the market mostly intact
• Post the tariff fallout, buyers from importing Canadian, Mexican and Brazil market continued to remain low which caused ample availability of stocks across Texas warehouses
• Low consumer confidence continued to negate demand conditions from the packaging sector
• Sellers mostly moved existing inventories at lower prices and converters mostly resorted to drawdown inventories from existing stock piles
• Polypropylene (PP) prices tracked the quarterly losses in feedstock Propylene (Polymer Grade) which fell by approximately 14% easing production costs
Why did the price of Polypropylene change in July 2025 in the US?
• In July 2025, the Price Index of PP was reported to increased as some buyers seen stocking up inventories ahead of the Hurricane season
• Leading manufacturers such as LyondellBasell and Braskem Americas were reported to have increased their quotations
• Lower run rates reported amongst PP manufacturers were reported to have caused a shortfall in July 2025 in mid-July 2025
Europe
• The Polypropylene (PP) spot price in Europe declined by 6.9% quarter-over-quarter in Q2 2025, reflected in a softer Price Index.
• Lower production costs witnessed as indicated by drop of 14% in the prices of feedstock Propylene.
• Low demand conditions from the primary construction sector continued to remain the prime factor for the downward pull on the prices
• Export demand and conditions remained sluggish amidst the Euro appreciation, congestions witnessed across the Northwest European ports which continued to impart a bearish pressure on the prices
• A tiered pricing structure remained largely in the European market with European produced PP commanding the highest prices, Middle East originated cargoes occupying the middle band and Asian origin inventories commanding the lowest band as a result Asian and Middle East origin continued to undercut European produced PP.
• Supply remained well supported despite European PP producers having kept run rates low and outages in the market, as influx of Asian and Middle East inventories continued to keep spot availability ample in the market
Why did the price of Polypropylene (PP) change in July 2025 across Europe?
• In July 2025, the Price Index of PP was reported to have been stable and unchanged in July 2025.
• Suppliers were to have been moving backlogged inventories at stable prices leading to a broadly stable market fundamentals.
• Market players have mostly expressed pessimism in the demand conditions from the construction industries and in the automotive, packaging and construction sectors
• Market participation from the both the buy and sell-side was reported to have been low amidst seasonal summer holidays
• Domestic producers across the Eurozone were reported to have maintained lower run rates amidst seasonal summer holidays
Middle East
• The Polypropylene (PP) spot price in Middle East declined by 0.5% quarter-over-quarter in Q2 2025, reflected in a softer Price Index.
• Lower production costs witnessed as indicated by drop of 1.8% in the prices of feedstock Propylene.
• Low demand conditions from the importing market markets such as Europe, Southeast Asia and Turkey continued to impart a downward pull to the prices
• Export conditions remained unfavourable amidst unfavourable exports amidst renewed geo-political conditions and security concerns at The Red Sea led port inventories being accumulated, resulting in the downward movement of the prices
• Middle East originated inventories continued to face competition against the South Korean duty-PP cargoes resulting in prices to witness a downward movement
• Buyers in Turkey remained on the side-line amidst Lira devaluation, unfavourable macroeconomic conditions and margin squeeze resulting converters operating at low operating rates thus lowering consumption as resulting in lower enquiries to Middle East suppliers
Why did the price of Polypropylene (PP) change in July 2025 across Middle East?
• In July 2025, the Price Index of PP was reported to have declined in July 2025.
• Suppliers were to have been moving backlogged inventories at lower prices leading to a broadly bearish market fundamentals.
• Market players from importing countries have mostly expressed pessimism in the demand conditions from the construction industries and in the paints and coating sectors
• Import demand from the prime European and Turkish markets remained subdued amidst the seasonal summer holidays.
• PP prices tracked losses in feedstock Propylene prices which were also reported to have fallen in July
APAC
• The Polypropylene Price Index across the APAC region declined by 1.7% quarter-over-quarter in Q2 2025, primarily due to persistent weakness in downstream demand, especially from the construction and packaging sectors, which failed to offer meaningful support to pricing levels.
• Supply-side adjustments such as reduced plant operating rates in South Korea and wider East Asia helped prevent a steeper drop in the Price Index, as lower production volumes and strategic stock clearance efforts by key producers helped maintain overall market balance despite lackluster consumption trends.
• Feedstock Propylene prices declined modestly during the quarter, and while this provided some cost relief to PP producers, the benefits were limited by lower Propane Dehydrogenation (PDH) unit run rates and concerns over reduced feedstock availability, which kept production costs relatively stable.
• Export activity showed signs of improvement during May and June, particularly with increased flows from South Korea to Europe and non-traditional destinations such as Brazil and Turkey, but demand from traditional Southeast Asian importers remained muted due to fiscal year-end transitions and seasonal weather impacts, capping upward price movement.
• Despite isolated demand recovery in the automotive sector, broader downstream demand remained soft, as cautious procurement behavior and weak construction activity across the APAC region weighed on the Polypropylene Price Index throughout the quarter, leading to the observed Q2 price correction.
Why did the price of PP change in July 2025 across APAC?
• In July 2025, the Price Index of 2-Ethylhexanol (2-EH) was reported to have increased amidst scheduled maintenance turnarounds across South Korea, Taiwan and China
• Lower imports were reported to have been originated from Middle East
• Restocking activity was reported to have been gaining momentum amidst the hurricane season being largely witnessed
• APAC-origin PP exports gained traction in global markets such as Latin America and parts of Europe, absorbing surplus cargoes and tightening regional availability. Freight rates remained largely stable, aiding cross-border trade flows without eroding margins.
South America
. The South American PP Price Index registered a marginal 0.1% decline on a quarterly basis, reflecting a stable-to-soft pricing environment driven by cautious procurement behavior and ample inventory availability across the region, especially in Brazil.
. Competitive international offers—particularly from Thailand, the Middle East, and South Korea—exerted downward pressure on the Price Index, while Chinese-origin cargoes continued to face resistance due to regulatory and quality concerns despite their pricing advantage.
. Domestic producers such as Braskem implemented upward price revisions during the quarter, but these efforts were largely absorbed by buyer pushback and minimal restocking interest, limiting any sustained bullish impact on the regional Price Index.
. Demand fundamentals remained weak across key downstream sectors; construction activity was restrained by high interest rates and input inflation, while automotive sales saw only intermittent recovery, both of which contributed to the stagnant Price Index movement.
. Supply dynamics were shaped by a combination of steady import inflows, reduced Asian export volumes due to production cuts and geopolitical constraints, and lackluster domestic production, collectively sustaining a tight but balanced market tone across South America.
Why did the price of PP change in July 2025 across South America?
. Tightening Regional Supply: Regional supply tightened due to reduced production rates at key domestic facilities, including Braskem in Brazil, as maintenance activities and high feedstock costs limited output. This coincided with limited availability of imported cargoes, especially from Asia and the Middle East, tightening the market.
. Reduced Import Volumes: Import volumes declined from traditional suppliers such as South Korea and Thailand due to ongoing production curbs and stronger demand in their local and nearby markets, making less volume available for South American buyers and putting upward pressure on prices.
. Improved Demand from Converters: Downstream restocking activity picked up, particularly in the packaging and consumer goods sectors, ahead of seasonal demand in Q3. This improvement in offtake helped support higher transaction levels, driving the price index upward.
. Freight and Currency Volatility: Rising freight costs on transatlantic and intra-Asia–to–LATAM routes, coupled with local currency fluctuations (e.g., Brazilian Real depreciation), added cost pressure to landed prices, prompting price hikes from both domestic and import suppliers.
. Stronger Buyer Sentiment: Market participants showed improved sentiment and a willingness to accept higher offers amid tighter inventories, allowing suppliers to push through price increases that lifted the overall regional Price Index by approximately 3% month-on-month in July.
For the Quarter Ending March 2025
North America
The North American polypropylene (PP) market exhibited predominantly bullish conditions during Q1 2025, with prices increasing by approximately 9%. This was driven by production disruptions, force majeures, and adverse weather conditions. In January, production rates remained below 80% due to the shutdown of LyondellBasell's Houston refinery, contributing to tight supply. Spot prices rose 5.5 cents/lb. as panic buying ensued following announced price hikes of USD 66/MT by major producers. Logistics were strained by severe port congestion and warehouse overflows, further tightening supply.
In February, even as feedstock propylene prices dropped, run rates remained low, sustaining high price levels. Inventory buildup and muted export conditions placed slight downward pressure on prices, although inland trade activity rose. Demand was subdued, with weak consumer confidence and cautious procurement behavior, especially in the packaging and automotive sectors.
March saw continued production discipline, with reactor run rates below 80%. Prime PP remained scarce in the spot market, while propylene prices declined further by 4.3%. Exports stayed weak amid tariff concerns, and domestic demand faltered with declining consumer confidence and spending, leading to moderate overall market activity.
APAC
The APAC Polypropylene (PP) market witnessed a largely stable situation in Q1 2025, with prices fluctuating marginally by around 0.3%, driven by ample supply, cautious demand, and evolving trade dynamics. In January, feedstock propylene prices rose slightly before stabilizing, while container freight rates fell, putting downward pressure on PP import prices. Production in East Asia was subdued, with PDH operating rates dropping to 63.9%. Northeast Asia saw stronger restocking demand ahead of holidays, while Indonesia's market remained cautious amid an anti-dumping investigation initiated by local producer PT Chandra Asri Pacific. February saw continued supply-demand imbalance as Middle Eastern imports faced delays and feedstock costs rose. Maintenance shutdowns in Saudi Arabia limited regional supply. However, buyers remained resistant to price increases due to sufficient inventory levels and subdued end-use demand. Indonesia’s anti-dumping authority proposed duties of 7.17% on imports from South Korea and Singapore. In March, PP prices came under downward pressure due to ample supply from China, higher PDH operating rates, and weak demand. Although Indonesia imposed 6–8% ADD on Chinese, Korean, and Middle Eastern imports, Ramadan-related business closures and conservative procurement behavior further muted buying interest across the region.
Europe
The European Polypropylene (PP) market experienced a predominantly bullish trend in Q1 2025, with prices rising by 7.6% overall. Prices initially fell by around 2% in early January but rebounded with an 8% surge through February and March, driven mainly by tightening supply and rising feedstock costs. In January, supply was ample due to high inventories and low operating rates (60–65%). Despite a 1.1% rise in propylene prices, demand was weak amidst extended holiday shutdowns, muted automotive and construction activity, and pressure from low-priced imports. Port congestion at major European hubs also disrupted logistics. February saw the beginning of a tighter market as maintenance turnarounds in the Middle East and fewer Asian imports led to limited availability. Producers raised prices by €70–100/MT, supported by a 4.5% increase in propylene costs. Restocking activity began, but demand remained weak across the use sectors. In March, supply constraints intensified amid rising propylene costs (up 8.5%), low cracker run rates, and ongoing port congestion. Demand remained subdued, with key sectors like construction and automotive underperforming, leaving the bullish pricing trend largely driven by supply-side limitations rather than demand recovery.
South America
The South American Polypropylene (PP) market witnessed mixed pricing dynamics in Q1 2025, with prices rising by approximately 1.3% in early January but falling around 2.6% in March, resulting in an overall net decline of 1.3% and predominantly bearish market sentiment. In January, Brazilian buyers favored imports from Egypt due to tax advantages, while Chinese exports declined ahead of the Lunar New Year. Supply constraints from the Middle East and subdued Chinese exports lifted prices slightly. Demand improved modestly, especially in automotive and construction sectors, halting the bearish trend temporarily. In February, supply remained ample, buoyed by increased imports from China and South Korea. Braskem maintained stable prices, but declining freight rates and competitive overseas offers limited the scope for price increases. Despite the upcoming supply tightness from Asia and the Middle East, buyer interest remained cautious. By March, prices softened amid improved global supply, a 3.3% drop in North American propylene prices, and sluggish post-holiday demand. Braskem’s slight price hike had limited impact, as buyer resistance to high prices and availability of competitively priced Asian imports kept the market under pressure.
MEA
The Middle East Polypropylene (PP) market experienced a predominantly bullish trend during Q1 2025, with prices climbing approximately 2.1% over the quarter, driven by supply constraints, maintenance turnarounds, and moderate domestic demand. In January, adverse weather and curtailed production slowed inventory movement across key ports like Jebel Ali, maintaining tight supply conditions. Export interest remained low due to uncompetitive prices compared to Indian and Turkish markets, prompting suppliers to focus on domestic sales. Demand was modest, supported by discounted year-end sales. In February, supply was further constrained due to planned shutdowns at NATPET and PIC facilities, while domestic demand was stable. Stronger packaging sector demand and festive restocking ahead of Ramadan kept the market balanced, although export demand stayed weak, particularly in North Africa and Southeast Asia. By March, limited spot availability, reduced cracker operations, and attempts by producers like SABIC to raise prices led to incremental price increases. Local buyers accepted higher prices amid Ramadan-related delays, while export demand remained soft. Exporters prioritized domestic markets, and sellers achieved better returns in Morocco compared to Egypt, despite pressure from competitive global offers.
For the Quarter Ending December 2024
North America
During Q4 of 2024, polypropylene prices across the US market were reported to have fallen by approximately 8%. Throughout the entire quarter, the US polypropylene market continued to follow the pricing dynamics of feedstock propylene (Polymer Grade), which depreciated by around 20%. Weak demand from the construction and downstream automotive industries remained the primary driver of the market, despite disruptions caused by the hurricane season, which continued until November 2024.
A notable event was INEOS returning to production in late October 2024, which further improved supplies in the domestic market and exacerbated the already bearish market conditions. The US polypropylene market also faced price competition from the primary Middle Eastern and Chinese markets, which kept prices under downward pressure.
Mid-quarter disruptions due to strikes between ILWU (International Longshore and Warehouse Union) and USMX (United States Maritime Alliance) led to empty accumulation across port terminals, making export conditions less favorable as vessels remained backed up.
Towards the end of the quarter, US suppliers were primarily focused on liquidating inventories to avoid tax repercussions at the end of the year. Export conditions worsened again due to the potential of another strike. With inventory liquidation in full swing, some producers tried to lengthen the market by reducing run rates.
Europe
During Q4 of 2024, the European polypropylene market experienced a bearish trend, with prices falling by approximately 8%. Producers mostly returned to production after the summer break, which ended in October 2024. However, underlying demand conditions remained weak, primarily due to the sluggishness in the key construction and automotive industries.
A notable event during the quarter was the return of production at Total Energies' facilities in Gonfreville, France, and Feluy, Belgium, with polypropylene production capacities of 230,000 tonnes/year and 850,000 tonnes/year, respectively. This further supported the bearish trend. Total Energies had previously declared force majeure for polypropylene deliveries throughout Europe in January 2024 due to mechanical issues at Gonfreville, which compounded supply issues already triggered by force majeure at Feluy since July 2023. With these force majeures lifted, the European polypropylene market began to move toward price normalization.
Arbitrage opportunities within and outside of Europe remained mostly closed, which compounded the already oversupplied market. Additionally, during the middle of the quarter, a proliferation of lower-priced import offers was witnessed, mainly from South Korea, China, and the Middle East. This resulted in price competition for domestic producers. Producers attempted to address this issue by lowering run rates.
Towards the end of the quarter, destocking activities continued, with suppliers focusing on liquidating inventories. Trading activities across inland European regions were disrupted due to unfavorable weather conditions in the Northwest European ports, which were further compounded by maintenance works. By the end of the year, the overarching market fundamentals were largely shaped by producers trying to lengthen the market situation through reduced run rates, with the market being largely supported by ample supplies and limited outages.
Middle East
The Middle East polypropylene market experienced a predominantly bearish trend during Q4 of 2024. Price competition from the Chinese and South Korean markets remained strong, with suppliers aggressively shifting their inventories to prime European markets. Export conditions were further hindered by security tensions in the Red Sea, resulting in inventory accumulation in the region. Export conditions to the Turkish market were also unfavorable, with the historically weak lira discouraging Middle Eastern suppliers from engaging with Turkish traders, which contributed to the overall weakness in the polypropylene market.
Although healthy domestic consumption at the beginning of the quarter helped stabilize prices, the market shifted to a bearish outlook as the year ended, with suppliers liquidating inventories. With the arbitrage window to Europe closing, suppliers from the Middle East were reported to have redirected supplies to the Indian market.
However, at the close of the year, intensified price competition from Indian suppliers, who offered discounts on domestic material, put additional pressure on Middle Eastern suppliers, prompting them to divert their cargoes to other parts of the Indian subcontinent. This, in turn, maintained the bearish market conditions.
South America
The South American polypropylene market, particularly in Brazil, witnessed a predominantly bearish trend during Q4 of 2024, with prices depreciating by approximately 11%. The Brazilian polypropylene market faced continued price competition from suppliers in South Korea, China, and the US, which led to an influx of lower-priced offers from these regions. Chinese and South Korean suppliers were particularly dominant, as their offers remained attractive to Brazilian traders.
Throughout much of the quarter, China's increased polypropylene capacity allowed suppliers from the country to redirect more of their supplies to the South American market, gaining a significant share of Brazil's net imports in November 2024. South Korean suppliers also remained competitive, with duty-free exports to Brazil continuing until October 2024. In an attempt to mitigate this market situation, Braskem, the major Brazilian producer, raised its quotations twice during the quarter, but these efforts were largely unsuccessful in reversing the market trend.
By the end of the year, Brazilian suppliers began exploring alternative markets. Some were reported to have sourced inventories from Egypt, as imports from the region remained exempt from taxes, further improving the supply situation for Brazilian traders.
APAC
The APAC polypropylene market experienced a stable to bearish trend during Q4 of 2024, with prices declining by approximately 1%. The continued expansion of polypropylene capacities in China led to ongoing price competition across the Asian market, alongside aggressive volume pushing by South Korean suppliers. Despite lower PDH rates, the decline in shipments contributed to inventory accumulation across ports in the region.
Demand conditions remained muted, particularly in key sectors such as automotive and construction, which continued to underperform. Weather-related disruptions, such as typhoons in the South China Sea, had minimal significant impact on polypropylene production or supply.
As the year progressed, the liquidation of inventories became a dominant market trend, applying downward pressure on prices. This occurred despite some turnarounds and force majeures in the South Korean market. China, with a reported 88% rise in polypropylene exports in November 2024, continued to push supplies into the Asian market, mitigating fluctuations in intra-Asia freight charges. However, these factors failed to generate significant impacts on market dynamics, with ample supplies circulating across the region.
For the Quarter Ending September 2024
North America
The U.S. polypropylene market experienced a decline of approximately 6% by the end of Q3 2024, driven by excess supplies throughout the market. Domestic producers struggled to compete with lower-priced resin imports, particularly from the Asia-Pacific region. Reports indicated a lack of new offers for polypropylene, with demand remaining mild as end users maintained sufficient inventory.
Additionally, Formosa Plastics Group's new polypropylene unit, initially slated to start in July, has been postponed to late September or October. The situation was further complicated by INEOS declaring force majeure at a U.S. facility on July 23, 2024, affecting the production of polypropylene copolymer products and limiting supplies, which was accompanied by several other outages witnessed in the market. which helped prevent a sharper decline in prices. Although polypropylene exports saw a slight dip from June, they remained elevated, and domestic sales exceeded the 12-month average for the fourth consecutive month, driven by strong processor throughput and ongoing inventory buildup.
However, the market continued to face challenges from inexpensive imports from Asia, as China increased its polypropylene production capacity to enhance competitiveness in the global market. Despite these challenges, the U.S. polypropylene market faced outages, with inventories among U.S. suppliers dwindling as converters worked through existing stock. Spot prices for homopolymer dropped slightly, while copolymer prices fell by a few cents, decreasing their previously inflated premiums. While INEOS and INVISTA remained on force majeure, there were expectations of improved availability as offline reactors came back into production. Spot availability remained tight, particularly for copolymer, leading buyers to slow their purchasing or reduce order volumes in anticipation of lower prices.
Europe
In Q3 2024, the European polypropylene market saw significant price increases due to several factors. Supply constraints from plant shutdowns and maintenance limited product availability, intensifying demand for inventory restocking. Geopolitical tensions further tightened supplies, and European distributors struggled to secure bulk cargoes, often only acquiring 1 to 2 truckloads at a time. Import availability was scarce, as suppliers from East Asia and the Middle East refrained from offering material due to high freight costs and long lead times. This made imports less competitive, allowing local suppliers to raise prices. The feedstock propylene market also faced challenges, with prices rising about 6% in late July due to supply pressures and depleted stockpiles. Despite these increases, market participants remained cautious, with notable declines in propylene imports from key suppliers in Asia, North America, and the Middle East. Scheduled plant overhauls in August and September prompted sellers to seek higher prices, although increases were moderate in July. By mid-September, improved supply conditions emerged as maintenance turnarounds were completed. However, intense price competition from East Asian cargoes led to price depreciation, exemplified by SABIC offering discounts of up to USD 30/MT. In contrast, LyondellBasell maintained firm prices despite weak demand. Overall, many polyolefin producers announced price decreases ranging from EUR 60 to EUR 250 per ton, with MOL Petrochemicals citing a EUR 70 reduction for polypropylene. There were also rumours of Middle Eastern offers around EUR 100/MT. Compounding these challenges, Petroineos announced the closure of the Grangemouth refinery in the UK due to significant losses. In Germany, polypropylene prices increased by 2% for the quarter, ending at USD 1,277/MT for injection moulding FD Hamburg, reflecting a more stable market environment despite a 12% year-on-year decrease.
MEA
In Q3 2024, the Middle East and Africa region experienced a notable decline in polypropylene prices, driven by several key factors. The market faced challenges from the global freight industry, supply chain disruptions, and moderate demand from essential industries. These issues contributed to a 7% decrease in prices compared to the same quarter last year, reflecting a tough market environment. Despite strong domestic consumption, unfavourable export conditions due to security tensions in the Red Sea significantly impacted exports. Many suppliers in the Middle East were hesitant to engage with volatile markets in traditional export destinations like Turkey and North Africa, where economic conditions were unstable. Southeast Asia also saw no significant improvement, as seasonal monsoon conditions dampened demand. Following the monsoon season, demand remained below expectations, with most suppliers adopting a "wait and see" approach and avoiding the spot market to secure inventories. Price comparisons between the first and second halves of the quarter indicated a 1% decline, reinforcing the downward trend. By the end of the quarter, the price for polypropylene injection moulding FOB Al Jubail in Saudi Arabia was USD 933/MT, underscoring the negative pricing sentiment in the region. Overall, despite stable demand from certain industries, external challenges continued to hinder a positive pricing environment.
APAC
In Q3 2024, the APAC region saw a significant decline in polypropylene prices due to several factors. Oversupply conditions, driven by increased production capacities and maintenance turnarounds, put downward pressure on market prices. Additionally, weak demand from key industries, such as automotive and construction, further contributed to the negative market sentiment. Japan experienced the most notable price changes, with a 14% decrease compared to the same quarter last year, reflecting the broader declining trend in the region. Across Asia, over 4 million tonnes per year of new polypropylene capacity is set to come online between June and December 2024, with several manufacturing bases already expanding their capacities. Currently, more enterprises are resuming operations than undergoing maintenance, leading to an increase in supply that continues to impact international prices negatively. The quarter-on-quarter change of -2% and the -4% comparison between the first and second halves of the quarter underscored the ongoing bearish market conditions. By the end of the quarter, polypropylene homopolymer prices reached USD 930/MT FOB Tokyo, highlighting a stable to negative pricing environment in Japan.
South America
In Q3 2024, the polypropylene market in South America experienced a steady decline in prices, influenced by several key factors. Disruptions in global supply chains, including container shipping issues and high freight rates, significantly impacted market dynamics. A surge in imports and moderate demand from key industries further exacerbated the price drop. By mid-August, the Brazilian polypropylene market turned bearish, with prices decreasing by approximately 2% as arbitrage opportunities from China opened up. Recent changes by the Panama Canal Authority, allowing more vessels to transit, facilitated imports from Mainland China into Brazil. Additionally, some supplies arrived from the US as production facilities resumed operations. While polypropylene copolymer supplies remained moderate, homopolymer supplies were in excess, creating confusion among local suppliers and leading to a cautious "wait and see" approach. Production conditions were challenging due to maintenance turnarounds on feedstock propylene in the US and Asia. Chinese exports remained competitive with US exports and local inventories, prompting market players to hold off on bids in anticipation of further price declines. Despite Brazilian manufacturer Braskem raising prices for polypropylene grades for the fourth consecutive month by R$500 per metric ton, domestic products struggled to compete with imports. Supply conditions improved slightly, but uncertainties persisted, particularly with delays of up to 30 days for imports from Saudi Arabia. Additionally, Brazil's Chamber of Foreign Trade increased import taxes on polypropylene from 12.60% to 20%, likely leading to higher market prices. In Brazil, the most significant price changes were noted, reflecting broader regional trends. Prices decreased by 13% compared to the same quarter last year but remained relatively stable compared to the previous quarter, with a marginal change of 0%. However, there was a notable 4% drop when comparing the first and second halves of the quarter. By the end of the quarter, the price for polypropylene homopolymer CFR Santos in Brazil stood at USD 1,135/MT, marking the culmination of the downward pricing trend.
FAQ’s
1. How does the spread between Propylene and Polypropylene impact profitability and price stability?
The Propylene-to-Polypropylene spread reflects the margin for PP producers and is a key indicator of market equilibrium. A narrowing spread typically signals margin compression, prompting producers to cut run rates or resist price reductions. Conversely, a wider spread indicates better conversion economics, allowing for more aggressive pricing strategies or capacity expansion. This spread often correlates with pricing volatility during periods of feedstock cost swings or demand shocks.
2. In what ways do PDH unit operating rates influence PP market pricing in Asia?
Propane Dehydrogenation (PDH) units are increasingly dominant in Asia’s Propylene production. High PDH operating rates increase Propylene supply, lowering feedstock costs for PP. When PDH margins are favorable (often due to low propane prices and strong Propylene demand), abundant Propylene leads to lower PP costs. Conversely, high PDH costs (e.g., due to propane price spikes or tight LPG supply) can restrict Propylene output, squeezing PP supply and pushing prices higher.
3. How does polymer grade Propylene (PGP) spot pricing influence PP contract pricing mechanisms?
Many long-term Polypropylene contracts are indexed to average monthly PGP spot prices or Propylene contract settlements. Therefore, fluctuations in PGP spot prices, driven by changes in steam cracker economics, refinery output, or PDH production, feed directly into PP pricing on a lag basis. Spot PGP price volatility can lead to monthly pricing volatility for downstream PP buyers tied to feedstock-linked contracts.
4. What impact does polymer melt flow index (MFI) variation have on PP pricing?
PP pricing can vary based on melt flow index (MFI), as it defines the resin’s flow characteristics and suitability for specific applications (e.g., low MFI for injection molding, high MFI for fiber spinning). Grades with specialized MFI or additive packages (e.g., UV stabilizers, nucleating agents) often command a premium. Moreover, during supply tightness, standard grades may see sharper price fluctuations, while specialty grades remain relatively stable due to contract protection or niche demand.
5. How do global arbitrage opportunities influence regional PP price disparities?
Price differentials across regions (e.g., APAC vs. South America) create arbitrage opportunities. Traders exploit these when regional PP prices diverge enough to cover freight and import duties. When arbitrage lanes open (e.g., low-cost PP in Asia exported to tight LATAM markets), this can temporarily stabilize or depress regional PP prices. However, delayed shipments or logistical constraints (e.g., container shortages) can disrupt arbitrage flows and intensify regional price divergence.
