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European PP market witnesses mixed dynamics prior to October

  • 27/09/2016 (03:35)
The European PP market is witnessing mixed dynamics ahead of October while increases are passing on September deals with respect to last month. Spot propylene prices have slumped by €65/ton at the end of last week due to shutdowns in the downstream market, which caused supply to improve for propylene and weighed down on spot prices in the region.

Still, Borealis’ force majeure declaration on PP from Kallo, Belgium and Ineos’ planned shutdown at Grangemouth might lend support to the PP market amidst weaker propylene.
A distributor in Belgium concluded some September PP deals up €20/ton from August. “Our supplier’s availability is tight for copolymers while their homo-PP supply is good. The market dynamics are balanced considering muted demand. For October, we are anticipating a new round of price increases,” he commented.

In Germany, a distributor sold West European PP with increases of €20-30/ton for September and commented that the outlook is mostly stable. A packaging producer settled their September PP contracts with increases of €20/ton from last month. According to the buyer, demand is good while supply is tight so PP prices might gain further ground in October.

In France, a distributor concluded some PP deals up €20/ton from August, commenting that demand isn’t brilliant and supply isn’t ample. A converter reported paying increases of €20/ton for his September PP deals after his suppliers toned down their initial hike requests. “Producers might seek to lift their PP prices in October citing reduced supply. However, we think that availability is sufficient in the distribution channel,” he noted.

In Italy, a converter reported making some purchases with increases of €20/ton from August after his suppliers stepped back from their initial prices. According to him, producers might aim for higher PP prices in October citing their supply constraints, but distributors are still holding high stocks. Another converter also made some purchases on a needs only basis this month. The buyer noted that supply is comfortable from distributors and he is projecting a mostly stable trend for October. Another buyer also paid increases of €20/ton for his September purchases and commented that the outlook is mostly stable for October.
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