US Polypropylene Price Declines Despite Rising Crude Oil Cost

According to representatives of New York-based Polypropylene (PP) supplier Blue Clover LLC, the early 2023 price increases for PP could be temporary. It seems the conditions are right for PP prices to decline as April approaches. The price drop in April is likely to be caused by a combination of falling North American and Chinese demand for PP and rising supply. Officials from Blue Clover also stated that not all places and types of PP will be affected equally. They claimed that U.S.-based Polymer grade Propylene and prime PP resin would experience the largest price drops in April compared to other regions.

Despite an increase in purchasing inquiries when oil prices rose in early April, purchasers of PP chose to take a wait-and-see approach due to a fall in finished goods consumption. A few local traders wanted to sell their excess inventory at the sale price at which business had been completed in the preceding week, while cost pressures forced some exporters to increase their offers. Buyers were reluctant to commit to new purchase transactions because they expected low consumption levels due to the April holiday season.

In Early April, spot trade activity increased as prices firmed due to a jump in PP future contracts. Although early material purchases were made, downstream converters were observed making need-based purchases since demand sentiment remained weak. Reports of plentiful product availability added to the downward pressure on prices in the region. The ChemAnaylyst team anticipates the retracement in resin to be less severe than the break in monomer because spot resin prices did not increase as much during the first quarter of 2023.

According to ChemAnalyst, the prices of PP in April are anticipated to continue their declining price trend due to the demand likely to remain much below average, and producers kept their plants running at a modest run rate. Demand weakness remained as converters only purchased enough material to meet their immediate production requirement.