ICIS Value Chain: Polypropylene

■ PP is used in plastic bags, yogurt cups, ropes, woven fabric, injection-moulded caps and bottles, auto components and storage containers. PP is highly exposed to the auto and construction markets.

■ US and Europe prices have been more stable in 2014 than in previous years with supply and demand in balance.

■ US producers continue efforts to improve base margin over propylene cost with proposed hikes on top of monomer.

■ Europe market is well balanced, not because of strong demand, but because production was curtailed due to propylene shortages in early 2014, and then because of PP production problems.

■ Relative stability in Europe to continue on reduced cracker output. No change in dynamics until Borouge 3 start-up.

■ China expected to add 2.7m tonnes of PP capacity in H2 2014, for a total of 3.5m tonnes/year for 2014.