Early July expectations emerge softer in Europe’s PP market
PP fares better than PE
Needless to say, PP deals in the contract market are awaited to be closed at a rollover from May.
However, some sellers have decided to offer discounts of only €10/ton to speed up their sales whereas PE decreases reached €30-40/ton in the spot market. This is because PP supplies are relatively more balanced with demand while the PE market is now well-supplied in the wake of fading demand and returning capacities as well as awaited imports.
Buyers in no rush to purchase on weak end markets
Although PP demand is stronger than it is for PE, economic concerns have a knock-on effect on end businesses. Buyers are in no rush to purchase as they are sure that they will be able to obtain small discounts as the month wears on. They are either limiting their purchases to the bare minimum or postponing them to the latter part of the month.
Lower costs, approaching summer weaken July expectations
Early July expectations mostly concentrate on a softer outlook mainly due to lower energy markets. Buyers point to the lower naphtha costs to justify their expectations.
According to ChemOrbis Price Wizard, spot naphtha prices on CIF NWE basis plunged by more than 21% on a weekly average since late April, when they hit around 6-month high. This is widely expected to find reflection on the next monomer settlements despite regional cracker turnarounds.
Spot propylene prices have already responded to the upstream losses and have turned down from nearly 7-month high as of last week, according to ChemOrbis data. Buyers commented, “Lower energy markets might pull prices down in July and we are not willing to buy when prices are on a downtrend.”
Apart from that, demand is not likely to rebound over the near to medium term ahead of the summer season. Unpromising demand particularly from the automotive sector, which has been the case so far this year, also dampens recovery projections.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Turkey’s PE market stuck between weak fundamentals and up pressure from China
- Firming PP trend falters in China’s local market
- European players question if bottom is near for PE
- Asian ABS players turn cautious after recent rally
- July PVC dealt lower in Europe, what lies ahead for August?
- China’s Jan-May total polymer imports hit a record of nearly two decades
- India’s local PVC market soars to 6-month high after customs hike
- China’s export PET market faces correction after rising 10% from two-year-low
- Spot propylene moves in opposite directions in Asia and Europe
- European PS hits year-to-date low on July drops