European PP Market on a Roller Coaster Ride: Will April Bring Stability or More Uncertainty?

The March month might have ended with a dull start for April, as some people have anticipated this market trend for Polypropylene (PP), while some players are not agreeing with this. The output from European PP plants was still at a low level but it was enough to fulfil all contractual obligations. Contrary to predictions, import material was not as abundant as expected particularly from the Middle East. The feedstock naphtha contract was fixed roughly 10% lower in mid-March, which prompted distributors to reduce stockpiles and provide special offers in anticipation of April pricing pressure. Yet, because demand remained flat throughout the month, these actions did not garner much attention and slightly rose PP costs in the later weeks of March.

During the reporting period from 12th February to 19th March, spot markets for PP continued to be in an uptrend, with price gains varying from little to significant. Although just a small number of transactions were settled overall, the market condition after 19th March was almost balanced in Europe.

Polymer Grade Propylene (PGP) reference prices for April have also decreased by around USD 40-50/t as anticipated. Moreover, manufacturers have disclosed plans to scale back or do away with energy price surcharges. Selling prices will probably see significant pressure in anticipation of either one or both. A huge PP facility in Poland would increase supplies if it were to start operating this month as long rumored and start generating material as required. However, imports of PP from the Middle East are likely to remain low due to reduced production rates caused by Ramadhan.

According to ChemAnalyst, in their predictions of European market for the coming weeks, market participants PP are divided. A greater group anticipates that PP prices will increase by 1-3% in the next uptrend. However, the little more pessimistic faction stated that it expects a range between a rollover and a modest fall in PP prices because of persistent weak market fundamentals and unresolved banking concerns.