Europe's PP market turns soft after four months of firming
In addition, buyers justify their decrease expectations by pointing to high inventory levels on the sellers’ side due to limited buying activities in the previous month. Sellers also admit that even if buyers will make some purchases this month, buying amounts will be limited to their basic needs due to the expectations of seeing lower prices.
A producer revealing its new May offers with rollovers from April commented, “We think that discounts can be seen over the near term if demand does not show any improvement. Converters either purchased limited quantities or held their purchases in April. This caused highs stocks on the sellers’ side, which is putting pressure on prices.”
Affirming the producer’s comment, a household manufacturer in France said they are planning to buy in small quantities in May like they did in April as they think that the sentiment has turned down and PP prices may post some discounts as the month wears on after four consecutive months of firming.
A converter in Italy also said that one of their West European suppliers has already decided to apply slight discounts for May compared to April due to ongoing weakness in demand. Lack of supply concerns is also cited as another reason for the shift in market trend.
Meanwhile, the PP market is also under pressure from feedstock costs. Naphtha prices are weak in line with the energy complex. Spot propylene prices are also bearish. According to ChemOrbis Price Wizard, they are currently at their lowest levels seen since late November given weak demand from downstream markets as well as the return of some crackers and propylene units from turnarounds.
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