PP, PE markets torn between firmer monomers and poor dynamics in Europe

As the year draws to a close, regional PP and PE players are assessing whether suppliers can hinder the downturn that kicked off two months ago. Pricing dynamics are expected to be heavily influenced by slack demand, ample supply and heightened competition from imports, particularly from the US in the case of PE. However, some sources remain cautiously optimistic, suggesting that firmer monomer settlements could offer some support to prices.

The near-term outlook indicates that both markets may experience rollovers or even reductions as sellers may be compelled to adjust to the softer demand landscape and an influx of competitive import offers. Converters tend to avoid building stocks ahead of the Christmas period and the year-end, let alone the impact of macroeconomic concerns and poor derivative consumption denting resin consumption.

Initial PP offers emerge with mostly rollovers

Some producers have already started to apply rollovers from October, defying €25/ton higher propylene settlement. The overall market remains cautious as demand continues to underperform expectations. This suggests that while rollovers may emerge at the start of the month, they are unlikely to be sustainable unless there is a significant demand recovery.

A major market participant revealed initial offers with rollovers, adding, “We will assess further our decisions over the course of the month as market conditions evolve.”
While some sellers in the distribution channel shared stable offers for European material, they have already applied €30-40/ton decreases for non-European materials to remain competitive.

Buyers adopted a wait-and-see approach, citing lackluster end-user demand and growing competition from imports. They expect further softening ahead unless demand doesn’t improve significantly. Given the current environment, rollovers or even price drops remain the most probable scenario for the month.

PE buyers sideline amid ample supply, competitive US offers

The PE market is following a mixed trend, with some producers initially aiming for slight hikes. However, the weak demand environment and oversupply situation in the market suggest that price cuts may be on horizon, especially if current demand stagnation persists. Moreover, the competitive pricing of US PE offers with January deliveries is enticing buyers to re-enter the market.

Distributors have started offering rollovers to drops, with some suggesting price reductions of €30-40/ton on certain grades. Import sources have been under increasing pressure from competitors and they are facing challenges in maintaining their market share, leading to discounts to attract buyers.

Notably, US PE imports are beginning to influence the PE market more heavily. With US producers offering competitive prices for January delivery, European buyers are increasingly evaluating these imports, which are expected to weigh on European prices in the near term. Regional producers may face downward pricing pressure not only in November but also in the coming months, as the influx of lower-priced US imports may arrive in greater volumes. This would further challenge local sellers, forcing them to reconsider their pricing strategies unless demand picks up.

Where will the markets settle?

In Italy, both PP and PE markets hit their year-to-date lows in October, ChemOrbis Price Index showed. In West Europe, PP grades and HDPE film also hit their lowest levels since January, but LLDPE and LDPE film prices declined to around 5-month lows.



Sellers seem to be open for negotiation, with slowing end demand and traditional destocking activities around the corner amid the approaching year-end. Despite profitability concerns, sellers are willing to sell from their stocks to alleviate the pressure. Buying resistance and competitive import offers will continue to weigh on local sellers, keeping prices at multi-month lows.