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March PP hikes go beyond propylene increase in Europe

by ChemOrbis Editorial Team -
  • 07/03/2017 (15:05)
European PP sellers are in quest of higher increases than propylene contract hikes for a third month in a row, citing reduced output owing to the lack of imports and regional shutdowns, higher costs and expectations of better demand ahead of the high season as the main factors. Some sellers started to voice sell ideas with three digit hikes, more than double the $50/ton hike in propylene contracts.

A West European producer revealed March sell ideas with €100-110/ton increases in the contract market. A producer source said, “We are planning to see double of the monomer increase at least. Demand is strong as the peak season begins for many injection applications. Plus, supply is limited due to the output disruptions in many PP plants and crackers.”

Distributors who started to offer with €100/ton increases in line with the guidelines from their suppliers, meanwhile, said that they will slightly revise their requests down to €70-80/ton. A distributor reported to have sold with €80-85/ton increases from February although their West European supplier started to offer with €100/ton increases in the first place.

Regarding demand, sellers and buyers are at odds. Converters are planning postpone their purchases due to the rising trend. “If prices post €100-110/ton increases, we will limit our purchasing volumes to the bare minimum or delay purchasing if possible,” said a buyer. On the other hand, sellers anticipate stronger demand in March owing to the low inventories on the buyers’ side as they had limited their purchases in the previous months.

Considering the ongoing tightness, the uptrend in the European PP market is likely to continue in the medium term, according to market participants. They believe that market fundamentals will ease once imported volumes from Asia will resume in Europe.
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