2 May, 2018
In Europe, initial PP offers are emerging for May with increases mostly matching the €25/ton hike achieved in propylene contracts while some players question whether demand will be strong enough to digest these hike attempts in the midst of some festivities across Europe.
In addition to higher monomer settlements, firming spot propylene prices amidst the strong energy complex have also prompted sellers to approach the market with increases for May. ChemOrbis Price Wizard reveals that spot propylene prices on FD NWE basis have recently hit more than one-year high, on average.
A regional player argued, “If it were not for the higher production costs, PP prices would be under the pressure of calm demand and sufficient supplies.”
Although official announcements have not been widely made, some PP sellers have started to voice their May sell ideas with increases of €25/ton in line with the propylene hike.
A regional distributor expects to receive €25/ton higher PP offers from his West European supplier, pointing to the fact that PP market is stronger when compared to PE as well as the possibility of seeing some improvement in demand.
In Belgium, a distributor also voiced higher sell ideas for May matching the propylene hike. He claimed that some buyers have already started to do some pre-buying at the end of April as they expected some increases.
Whether demand will improve in response to the firmer PP offers or not is a matter of discussion as demand was previously expected to remain subdued in May due to some festivities across Europe. Limited working days might put a cap on sellers’ hike attempts going forward.
A converter from Italy reported, “Demand is sluggish while supplies are ample. We heard that producers are sitting on high stocks. Therefore, we expect stable PP prices despite the €25/ton hike in May propylene contracts.”