Europe’s PP market hits fresh lows as May drops unfold

PP markets in Italy and Northwest Europe kicked off May on a visibly softer note, driven by a €65/ton drop in the propylene contract. The cost pressure has pushed regional and non-European suppliers to revise their PP offers down for another month, with spot prices in Italy slipping to their lowest levels since January 2024, according to ChemOrbis Price Index data.



Sellers try to protect margins as monomer drop sets the tone for May

Despite the steep monomer drop, European producers in both Italy and West Europe attempted to apply smaller reductions of €20-50/ton on initial May offers, aiming to recover margins. Meanwhile, distributors offering non-European cargoes, particularly from South Korea and Saudi Arabia, applied sharper decreases of up to €70/ton.

Players hinted at the possibility of further concessions from regional suppliers amid weak buyer response, as converters mostly push for obtaining the entire monomer drop considering abundant supplies and stagnant downstream sectors.

Buyers cautious, eye further discounts

Converters in both regions approached the market cautiously, resisting early offers in anticipation of additional reductions later in the month. While demand in Italy showed modest improvement over April—when many buyers skipped replenishment—overall appetite remained limited. “Demand was not so bad in early May as many converters are inquiring for material,” commented a distributor handling both local and imported grades in Italy.

In contrast, demand in West Europe was described as stagnant in the first week of May, partially due to the post-holiday lull. Many buyers were still waiting to receive fresh offers or expressed ideas for decreases in line with the monomer drop, while some preferred to limit their purchases given bearish expectations for the upcoming term.

Downward pressure to persist through May

Both markets are likely to remain under pressure for the remainder of the month. As suppliers seek to clear excess stocks and demand recovery remains tepid, deals with reductions matching or even exceeding the monomer drop may become more common. High availability, particularly for non-European cargoes, will further weigh on market sentiment.

Imports remain a drag on prices

In Italy, South Korean PP offers were quoted at €1030/ton CIF for July/August delivery, suggesting that competitive imports may continue to shape the price landscape in the near term. If global PP markets cannot stabilize or recover soon, major PP suppliers—particularly Saudi Arabia and South Korea—may continue to target Europe to divert excess stocks and address waning demand.

Meanwhile, the freight market continues to inject uncertainty into the polymer outlook, with short-term rate hikes emerging amid a wave of pre-tariff demand, particularly from non-China Asian exporters. While this front-loaded activity may temporarily support freight rates, the sustainability of these gains remains questionable. Should ongoing trade negotiations stall or deteriorate, the upward momentum could quickly reverse, reviving bearish pressure on shipping costs. Compounding the fragility of this outlook is the potential redeployment of container vessels to the Red Sea route following recent ceasefire developments. A return to this passage would release substantial idle capacity back into the market, likely triggering a renewed slump in freight rates.