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Will propylene hike be reflected on European PP?

by ChemOrbis Editorial Team -
  • 04/10/2018 (04:09)
The European PP market entered October on a stable to slightly firmer note in line with the expectations. Accordingly, PP suppliers revealed initial sell ideas and October offers mostly with increases following the propylene contracts that settled up €20/ton. Meanwhile, rollovers were seen in the distribution channel. “It is still early to evaluate market reaction,” a trader said.

A West European producer plans to ask for larger increases of €30/ton given their maintenance shutdown that will last until mid-October while other regional producers started to offer with €20/ton increases in line with the propylene hike.

“Unlike PE, supply and demand are in balance in the PP market. On top of this factor, firmer upstream costs and regional PP shutdowns might warrant some PP increases this month,” several players concurred.A few buyers have already paid small increases of €10-20/ton on the low end of the overall price ranges.

On the other hand, some buyers reported to have paid rollovers on initial October deals, noting that prices are already standing at high levels.

Now it is a question of whether tepid demand will hamper sellers’ hike attempts or not going forward. A buyer in Italy said, “Demand is not brilliant, even though sellers are supported by the rising upstream costs. As we are covered, we are not willing to buy in case of hike announcements.”

In Germany, a distributor started to offer with rollovers to €10-20/ton hikes, but he added, “Even though our suppliers aim for €20/ton increases, we push for rollovers as demand is weak. Plus, players will be gathering at the Fakuma fair in Germany by around mid-October. After the fair, we might have a better idea about the state of demand.”

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