Import demand for polypropylene (PP) in the key China market is expected to strengthen, because several local plants are scheduled to be shut down for maintenance in the second quarter.
If China’s demand is robust, PP prices are likely to stay firm in the Middle East as downstream demand is expected to strengthen in the run-up to the summer months and the Muslim fasting month of Ramadan in August.
Indian producers, traders and buyers are keeping inventories low before the fiscal year ends on 31 March. This tight supply will continue, as an Indian PP plant will be shut for 45 days from April.
Demand in Europe’s PP market has improved, but is still below pre-2008 financial crisis levels. Some producers expect propylene feedstock prices to soften and PP prices to fall.
Better pricing in Latin America than the rest of the world has attracted producers in South Korea and the Middle East, who are gaining a foothold in the region.
US PP prices should continue rising until April at least, as supply for propylene feedstock remains persistently tight. However, the price uptrend may lose momentum, as the price hikes deter buyers, weakening overall demand through most of the second quarter.
Listen to the latest ICIS Polyethylene Polypropylene Podcast