Skip to content

Filter Options
Text :
Search Criteria :
Territory/Country :
Product Group/Product :
News Type :
My Favorites:
 

European PP, PE set for 4th bearish month, is bottom near?

  • 03/07/2017 (08:13)
European polyolefin markets were on a steadily bearish trend since April this year. July is now set to be the fourth month of price falls in a row for PP and PE since new monomer contracts settled down €50/ton as widely expected.

Nevertheless, players in the region started to question whether both markets will bottom out after July decreases pass or not. Accordingly several buyers voiced their intentions of building up some stocks this month as they mostly kept their PP, PE inventories low ahead of July decreases. A PP converter in Italy confirmed, “We have not purchased many volumes as our suppliers told us to wait since prices could drop again in July.”

A packaging converter in Italy expects PE prices to post similar drops to the ethylene decline. “Yet, we feel that producers will try to keep the decreasing trend in check. As we purchased only what we needed during June, we plan to build up some PE stocks in case prices reach the bottom in July and turn up in August and September,” the buyer stated.

A different buyer who paid €50/ton drops in June for PP said, “July will see a new round of price decreases amidst lower naphtha and propylene costs in Europe. However, producers will try to put a cap on strong drops this time.”

A distributor in France underlined that PE prices have already posted decreases on a weekly basis since the beginning of the third quarter of the year and producers have faced squeezed margins. A seller in the Netherlands also anticipates that producers may apply more modest declines than the drop in propylene contracts as he realized that import prices for new shipments are not decreasing and demand is likely to be satisfactory in July.

“We were able to reduce our stocks significantly during June. Therefore, the first weeks of July might be a good time to build some stocks as PP prices may reach the bottom levels,” a distributor in Germany also noted.

According to ChemOrbis Price Index, as of end June, Italy’s local homo PP, PPBC inj. and LLDPE markets hit the lowest levels since January this year on a weekly average. LDPE and HDPE prices, meanwhile, sank to a 28 month low, the data revealed.
Free Trial