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European sellers achieve propylene hike on PP deals in Germany, Italy

by ChemOrbis Editorial Team -
  • 14/06/2018 (09:39)
Although initial June hikes of up to three-digits faced PP buyers’ resistance in the first week of the month, some sellers could pass increases of up to €80/ton on their PP deals this week. Sellers were mainly supported by tight propylene supplies and relatively more balanced supply-demand conditions in the PP market when compared to PE.

A major market participant argued, “PP producers struggle to find propylene, which we think what makes them stand firm on their offers. We even heard that some producers are selling propylene instead of producing PP as it is more profitable.”

“Since the PP market is in a better condition than the PE market in terms of supply levels, we think that larger increases for PP will prove workable on June deals going forward. Moreover, demand for PP is better compared to PE,” claimed several players.

The majority of market players expect to close their deals with increases of €70-80/ton given the support from higher propylene settlement for June, sellers’ firm stance as well as the recent rebound in demand. This, in turn, convinced some buyers to come back to the market to secure their needs. Central and West European PP cargoes were sold with increases ranging between €60/ton and €80/ton in Germany and Italy this week.

However, others, who are not in a rush to source, preserved their expectations to see smaller increases in the latter part of the month. A buyer from Italy reported, “We expect lower prices in the second part of the month. Sellers may concede to some discounts as demand has not substantially changed and supply is sufficient.”

Although not widely confirmed, the rumor has it that some sellers are giving aggressive offers. “It’s still early, but we think that they might be focusing on stock management, supposing that demand will gradually slow down moving into summer holidays,” commented a player.
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