Initial Jan buy, sell ideas voiced in Europe’s PP market
Weaker expectations are driven by lower propylene contracts
It’s crucial to note that official PP offers are yet to emerge due to the lingering holiday lull and they are more likely to be announced as of next week, when more players will be back in harness.
The lower outcome of propylene contracts and expectations for a slower demand were blamed for weaker projections. Some players expect a slowdown in demand as buyers will be waiting to receive their previously ordered cargoes.
Pre-buyings in November and December may result in slower demand in January
A distributor from the Netherlands reported, “We are planning to apply small decreases of €20-30/ton following January propylene contracts that settled €35/ton lower. January might be a slower month in terms of trading activities as we performed satisfactory sales in November and December.”
Slow end markets are another factor that might hinder better activity, according to players. A buyer noted, “Our end product demand was okay in December while early signs for January are not that brilliant. Therefore, we are in no rush to purchase. PP prices may see €20/ton lower levels.”
Will shutdowns cushion the expected drops?
On the other hand, suppliers might try to hold their prices steady, pointing to the regional PP outages.
In Italy, a distributor reported that he is waiting to receive fresh offers from Far East Asian suppliers. He added, “We expect mostly stable prices as China’s PP market may be supported by limited local supplies.”
Spot propylene somewhat shifted up but will it reflect on PP?
According to ChemOrbis Price Wizard, the weekly average prices for spot propylene turned up from a year-low by around mid-December.
Moreover, upcoming maintenance shutdowns at European crackers will constrain monomer availability in the region. Some players argue that this might help sellers restrain the expected drops especially if spot propylene prices remain supportive depending on the direction of upstream chain.
More free plastics newsPlastic resin (PP, LDPE, LLDPE ,HDPE, PVC, GPS; HIPS, PET, ABS) prices, polymer market trends, and more...
- Low overseas supplies prop up import PP prices in China
- Vietnam’s local PP, PE markets resume firming; LLDPE fails to catch up
- Are European ethylene contracts heading for 3rd straight month of hikes?
- Taiwanese major’s May PVC offers to Asia see larger-than-expected drops
- Asian ABS sellers renew confidence in shadow of volatile styrene
- Bullish run loses steam in Turkey’s PP, PE markets
- Tepid demand caps larger PP hikes in Europe, PE fares better
- Asian PET markets drift higher after explosion at Formosa’s plant
- Will turnarounds eliminate oversupply in China’s local PP market?
- European ABS faces large hikes on heels of costs