For the Quarter Ending September 2023
The prices of Polypropylene Glass-filled Compounds have shown a fluctuating trend during the quarter after observing sluggishness in the first couple of months. The performance of the construction industry has been unable to recover in the third quarter, and August output for the construction industry has declined further. The housing, commercial, and other construction activities witnessed a decrease in the European nations. Demand from downstream construction and other derivatives has been continually weak, and the demand outlook also appears to be sluggish for the remaining part of the year. In September 2023, the Eurozone Construction PMI showed a marginal increase. However, this uptick still indicated a significant contraction in the construction sector. Meanwhile, the feedstock prices, including Polypropylene, have declined in the quarter and thus had limited cost support for the product. Weak demand persisted, resulting in the fastest decline in new business since May 2020. This led to substantial declines in both activity and input purchases across all construction categories, with house building being the hardest hit. Notably, Germany continued to experience a sharp decline in overall construction activity.
The Polypropylene Glass Fiber reinforced compound price trend showcased mixed sentiments throughout the quarter in the Asian market. As per the data, prices fluctuated throughout the quarter, demonstrating a consistent fall for the first half of the quarter due to demand dullness owing to the monsoon season in major Asian economies. However, monsoon season started to terminate by the end of the quarter. Thus, consumption improved linearly in the Asian market, helping prices to recover. Further, the rising cost of Polypropylene also supported the overall uptrend during the second half of the quarter, taking a push from escalating global crude oil value. The trajectory of upstream Crude Oil prices remained upward, drawing investor attention to supply constraints amid ongoing macroeconomic uncertainties. Key oil-producing nations, Saudi Arabia and Russia, extended their voluntary oil output reductions by a collective 1.3 million barrels per day until year-end. This decision propelled global crude prices to a 10-month high.
During the third quarter of 2023, the Polypropylene Glass Filled Compound market in North America displayed a robust performance, primarily driven by the US market. This surge was largely attributed to the increase in the price of the feedstock Polypropylene and the growing demand from the downstream automobile industry. Notably, major global automakers witnessed growth in new vehicle sales during this period, reflecting improvements in supply and strong demand, with limited influence from rising interest rates. However, the automotive sector encountered disruptions in production due to pandemic-related supply chain challenges, particularly in semiconductor chips and other critical raw materials, impacting their ability to meet the rising demand for personal transportation. Towards the end of the quarter, the price of the Polypropylene Glass Filled Compound experienced a rapid increase of more than 3%, primarily due to the sharp uptick in upstream Crude Oil prices. The upward trajectory of Crude Oil prices attracted investor attention, given ongoing macroeconomic uncertainties and concerns about supply constraints. Notably, key oil-producing nations, including Saudi Arabia and Russia, extended their voluntary oil output reductions by a collective 1.3 million barrels per day until year-end. This decision drove global crude prices to a 10-month high earlier in the quarter, highlighting the intricate interplay between the energy market and its impact on the Polypropylene Glass Filled Compound industry in North America.