Supply-demand dynamics pull down PP prices in Europe
A West European producer concluded some July PP deals in the spot market with decreases of €30/ton last week. A source from the producer noted, “Demand is weak while supply is comfortable. We are anticipating a new round of small decreases for August.” Another West European producer concluded some spot PP deals down €30-40/ton from last month. A source from the producer considered further reductions to be possible for the second half of July considering poor demand.
A different West European producer is wrapping up their spot PP business with rollovers from June this week while continuing to give stable offers for their July PP contracts. A producer source commented, “Demand isn’t bad considering that we are sold out by now. We are closing our order books in Italy. One of our production units is experiencing a production issue. We think that an upturn is possible as of September.”
A distributor in Italy sold South European PP with notable decreases of €70/ton for July. The seller commented that most distributors are holding high stocks and he heard about quite low prices in the market. Indeed, players are reporting that the overall supply is considered to be comfortable given the sluggish demand stance.
Another distributor in the Netherlands sold West European PP block copolymer injection with additional decreases of €30-40/ton from his initial July offers. The seller also concluded some deals at quite competitive levels for locally-held Middle Eastern and Russian cargoes. “We heard talks about a stabilization for August while we think that the increasing trend might start as of September,” he noted.
Many buyers are hoping to purchase homo-PP injection at levels below the €1000/ton threshold in the spot market given weak expectations for the short term. For contracts, a converter in Belgium reported receiving July offers with discounts of €20/ton from his regular European suppliers this week.
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