European PP, PE players close December business, eyes on Jan

PP and PE players have recently wrapped up their December business given the approaching year-end pause, while they shifted their focus entirely to the January outlook. Deals were closed mainly with rollovers this month, while small up and down variations were also in place in a few cases.

Meanwhile, dwindling availability amid some production issues across the bloc as well as the narrowing gap between imports and local markets triggered expectations for a change of direction in the first quarter of 2025.

December PP dealt stable to slightly lower

Regional producers opened the month with rollovers to small drops, mostly in line with the €10/ton lower propylene settlement. However, demand was reportedly weak as converters avoided fresh purchases in December given slack end-product businesses. Some buyers, meanwhile, preferred to secure extra cargoes with delivery in January, right after Christmas festivities. In the import market, prices lost their competitiveness amid rising freight rates, with fresh offers almost standing at par with local levels.

In Italy, spot ranges were last assessed at €1080-1180/ton for PPH inj., €1180-1280/ton for PPBC inj. and at €1200-1300/ton for PPRC inj., all on FD, 60 days deferred payment basis. In West Europe, spot ranges were €60-70/ton above those in Italy.

Rollovers pass on PE deals; small hikes also present

December PE deals have been mostly concluded with rollovers, as regional producers held onto their offers, defying the €7.5/ton lower ethylene contract. Some traders, meanwhile, offered their allocations with small increases of €20-30/ton for January deliveries. This is because they claim to have low stocks after November destocking activities. Although US material still offers a competitive edge, previous low ends started to disappear for some grades. Overall demand remained subdued for December given high stocks and slack end-businesses. While some converters secured stocks for the first half of next month, others preferred to move to the sidelines.

In West Europe and Italy, price assessments stood at €1150-1250/ton for LDPE film, €1050-1180/ton for LLDPE C4 film and at €1100-1180/ton for HDPE film, all on FD, 60 days deferred payment basis.

Dwindling supply, uncompetitive imports may support sellers

Some regional production issues were reported in late November, although both PP and PE markets are still balanced for now amid weak demand ahead of the imminent year-end. Three force majeures were declared in the PP market by Braskem Europe, Ineos and MOL. In the PE market, meanwhile, LyondellBasell had production issues at its cracker and LDPE unit in France due to technical problems.

As for the import market, rising costs, including fluctuating exchange rates and higher shipping fees, have recently rendered non-European origins less competitive. Traders reported fresh Asian PP offers with increases of around €40/ton compared to the previous price levels, while US offers with delivery in January were also up by $20-30/ton.

Will Q1 prices see a change of direction?

The January PP and PE outlook remained mostly stable, as players will return to their desks around January 7th, after the extended for Christmas festivities. A few players, however, do not exclude small drops in deals as subdued demand is expected to persist after many buyers had secured some cargoes with January deliveries. In addition, the next ethylene and propylene contracts are awaited slightly lower, weighing on the outlook further.

As for February and March, a lack of competitive pressure from imports as well as production issues across the bloc might pave the way for a firmer trend, according to market participants. Overall demand, though, is not likely to see a major improvement in early 2025 amidst low consumption as well as uncertainties related to the economic conditions in Europe.