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PP sellers soften stance in Europe, July outlook evaluated

  • 21/06/2016 (03:40)
Many distributors across the European PP market stepped back from their prices last week due to pressure from muted demand despite higher propylene contracts. As a result, spot PP prices softened in Italy and high-end PP prices disappeared in West Europe. Players are continuing to comment on the July outlook.

A distributor in France concluded some June PP deals with rollovers to decreases of €10-20/ton from May last week. “Demand hasn’t recovered while supply appears to be comfortable. We expect to see decreases of around €20-30/ton in July,” he commented.

In Germany, a distributor sold Central European and locally-held Middle Eastern PP with decreases between €10-30/ton from May this week. The seller reported lowering his prices to attract buying interest amidst slow trading activities, adding that he is doing back to back business in anticipation of decreases for July. Another distributor also applied discounts of €30/ton on his June PP deals with respect to May. The seller commented that demand is quiet and he expects to see a downward trend in July.

Several distributors in Italy concluded some June PP deals with rollovers to small decreases of €10/ton from May at the beginning of this week. One of the sellers stated that European producers aren’t stepping back from their prices and discounts are only available in the distribution market while another distributor reported hearing about new decreases for July. A converter bought some West European PP with decreases of €10/ton for June from his regular suppliers while purchasing Indian homo-PP injection from the import market with larger reductions.

Despite weak expectations for the approaching month in the downstream market, spot propylene prices on an FD NWE basis inched up at the end of last week and they are now standing above early June levels. The recent gain in propylene costs was attributed to supply problems at BASF’s PDH. However, players are not so hopeful about the short term outlook considering the return of Dow, BP and Total’s Naphtachimie crackers.
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