July PP sentiment shifts following stable propylene in Europe
Although PP sellers’ July pricing policy has not taken its final shape, some producers were seen approaching the market with modest hikes of €10-20/ton.
A distributor expects to achieve rollovers to some increases on July deals. He claims that demand is not likely to slow down as holidays vary by region in Germany, pointing to the high season for some PP applications.
Meanwhile, some resellers have already issued rollovers on their new offers, bearing a possible slowdown in demand ahead of the summer holidays in mind. Players mostly agreed on the fact that demand is not supposed to improve as players will be leaving the market by mid-July.
A player opined, “Now that propylene contracts settled with rollovers, we believe that sellers’ initial hike attempts will not be absorbed by the market at a time when players are about to leave their desks for holidays. Balanced supply-demand dynamics also support our stable expectations.”
In Belgium, a distributor also thinks that rollovers might pass on July deals, considering the high levels PP prices reached after June hikes of up to €80/ton.
Meanwhile, some players do not rule out the possibility of seeing slight discounts moving forward amid destocking concerns ahead of the summer holidays. A trader, who received new PP offers with rollovers, said, “Prices might go down in the second half of the month as buyers might reduce their stocks before holidays arrive.”
As an exception, a few buyers expects PPBC prices to go up slightly by €10-15/ton in the latter part of July as some specialty grades of this grade are quite tight. One of them confirmed, “Deliveries are frequently delayed.”
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