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PP sellers trim May offers further, prices hit 3-month low in Europe

by Manolya Tufan -
  • 10/05/2023 (09:51)
In Europe, May has been the second straight month of decreases. PP sellers initially approached the market with €15/ton drops as the month kicked off. However, some distributors have conceded to larger decreases of up to €30-50/ton as early as this week to spur their sales, with demand showing no signs of recovery.

Prices on high ends post larger drops, weekly averages dip to 3-month low

West European material generally form the high end of the price ranges, while Central European or locally-held import origins stand on the lower end of the ranges. Distributors holding West European material were seen conceding to larger discounts as their prices remained elevated and failed to compete under current market conditions.

According to ChemOrbis Price Index, spot PPH inj. and copolymer prices hit their lowest levels since late January after initial May offers emerged with decreases matching the monomer drop.


Demand struggles to pick up

With demand showing no signs of recovery, players expect to see further discounts as the month wears on. A distributor said, “Overall demand is weak, and we will decide whether to concede to further discounts or not during the month.”

Confirming low buying interest, a global trader reported, “Buyers are either covered or the uncertain market outlook keeps players on the edge. We do not expect demand to pick up in May while prices are falling.”

Indeed, consumption in downstream sectors may remain subdued during summer, as a buyer put it. The buyer added, “We are limiting our purchases to our basic needs as demand is low. Consumption in construction and garden furniture is slower. There is no point in building stocks as prices wouldn’t rise sharply in June and July. But the volatility is here to stay due to oil markets.”

Non-European PPH prices go below €1200 FD Italy

Non-European PPH prices broke below the €1200/ton FD threshold and deals for Central European, Egyptian and Israeli PPH inj. stood at €1150-1180/ton on FD Italy, 60 days basis.

Last week, spot ranges for PPH inj. were assessed €15/ton lower at €1215-1315/ton FD Italy, 60 days. PPBC and PPRC inj. prices were assessed lower respectively at €1315-1415/ton and €1365-1465/ton with the same terms.

In West Europe, spot ranges were last assessed at €1315-1415/ton for PPH inj., €1415-1515/ton for PPBC inj. and at €1465-1565/ton for PPRC inj. on FD, 60 days deferred payment basis.

It is crucial to note that spot ranges will be subject to changes once weekly assessments are completed on Thursday based on the latest market feedback.

Total lifts PP FM, supplies comfortable

On the supply front, Total Energies lifted the force majeure on its PP output from Lavera, France as of May 4. Market sources reported lingering production issues at Lavera and Gonfreville. However, overall supply is comfortable despite regional production losses as a result of run rate cuts and other operational interruptions. This was primarily due to weak demand and due in part to the import availability. As a side note, imports lost competitiveness over the spot market following recent price cuts from European suppliers.
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