European PP approaches half-decade low amid frail demand, long supply

PP markets across West Europe extended their downtrend into late September, with PPH, PPBC and PPRC injection grades sliding to their lowest levels since December 2020—at the height of the first pandemic winter. Market participants cited sluggish demand, oversupply, and mounting competitive pressure as reasons why sellers were forced to concede to further discounts.

September concludes with small drops, slack activity

Most September contracts and spot deals were settled with decreases of €20-30/ton, although some distributors admitted conceding to larger reductions in special cases. Some buyers reported securing PPH well below the €1000/ton FD level, while hearing even lower offers toward the end of the month.

Despite these decreases, trading volumes remained thin. Many converters preferred to stay on the sidelines, covered by earlier purchases and deterred by bleak expectations for Q4. “Buyers prefer to wait as they know that PP prices are likely to drop again. The market is unbalanced amidst weak demand and long supply,” a German distributor commented.

Another distributor stressed that derivative markets, particularly automotive, are unlikely to stage a meaningful recovery this year, keeping PP demand muted.

Ample availability collides with poor demand

Sellers consistently pointed to slack demand and high stocks across the region. Even as some producers remained firm on rollover requests amid curtailed output, competitive import offers and aggressive spot deals from other suppliers kept prices under pressure.

Some buyers opted for near-to-prime and off-spec cargoes rather than fresh prime volumes, citing stable but shrinking end-demand and the need to keep costs down. One Belgian buyer said, “We anticipate around a 15-20% demand decline in Q4. We are not considering prime cargoes for now.”

Distributors confirmed that imports were not particularly attractive either, as offers from Asia were largely aligned with European levels. Still, some South Korean cargoes began to emerge with competitive prices following freight relief, though market feedback was limited.

Outlook: Stability not ruled out, but downside prevails

Market players broadly anticipate a stable to softer trend in October. Propylene contracts are expected to see rollovers or post only minor adjustments, which could help producers defend against deeper PP cuts. However, most acknowledge that persistently weak fundamentals will leave sellers with little choice but to apply further small drops on deals.

Year-end destocking looms as an additional bearish factor. A Belgian buyer noted that October may bring another €20/ton decrease, while November could see stability before further reductions in December as players liquidate stocks.

Regional producers may also attempt to curb operating rates further, while longer-term restructuring plans continue to cloud the supply outlook beyond 2025. Yet, in the short term, sentiment remains downbeat.

Lowest level since pandemic winter

After the sixth consecutive monthly drop, spot and contract prices for PPH, PPBC and PPRC injection have fallen to their lowest levels since December 2020, when pandemic-related disruptions and lockdowns rippled through Europe’s manufacturing chains. The latest multi-year lows underscore how fragile demand remains compared to supply, despite the years that have passed since.

With no significant signs of recovery in downstream demand, especially in the key automotive sector, and amid the prospect of further imports, sellers are preparing for yet another tough quarter. A trader summed it up: “Prices may not have big room to fall, but the market is unlikely to find firm ground until at least early 2026.”