PP prices expected to fall for a 4th month in Italy
Players are now focused on February, when they expect PP prices to decline for a fourth consecutive month given the weak outlook for the awaited monomer contracts. Propylene contracts, which settled at a 5 year low in January, are expected to post further decreases for the upcoming month.
A distributor sold West European PP €100/ton below last month. The distributor reported that he expects to see decreases larger than €60/ton on the February propylene contracts. Another distributor conceded to larger discounts of €120-130/ton on his January PP deals. “We expect buyers to build some stocks in February when PP prices might reach the bottom before stabilizing. Propylene contracts might settle down €50-60/ton for February,” he commented.
A different distributor conceded to additional discounts of €30-40/ton on top of his initial January PP decreases of €100/ton in the second half of the month due to stagnant demand. The distributor commented that his margins are weak and added that he projects decreases of €50-60/ton for the eagerly awaited propylene contracts.
Most buyers avoided buying beyond their needs this month in anticipation of seeing further decreases in February. A converter reported that he is sticking to the sidelines for now despite receiving West European PP offers at the low end of this week’s ranges.
Another converter made some purchases €110/ton below last month after PP prices posted further slight decreases compared to early January levels. The buyer said that he is waiting for the February propylene contracts to settle, for which he anticipates decreases of €50/ton at most.
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