ICIS has extensive coverage of the Polypropylene markets and our network of locally-based experts deliver reliable and trustworthy pricing information on a weekly basis. Price reports are published from Africa, Asia, southeast Asia, Middle East, China, CIS, Europe, Turkey, US and Latin America.
There are also weekly margin reports in Asia, China, Europe and the US assessing a short-term three-month view and longer-range view. Forecast reports looking forward a year and 12-month rolling series reports are also compiled for Asia, Europe and the US. This high-value news and analysis is an essential business tool to assist market players when making crucial decisions
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We offer the following regional Polypropylene analysis and news coverage to keep you informed of factors and developments affecting prices in the Polypropylene marketplace.
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Polypropylene: Market overview
Updated to Q2 2018
Supply levels will improve, as suppliers turn their focus from Asia to other regions. Middle East allocations should also improve, following the end of a major maintenance period for many plants. Competition for market share in a relaxed market may see many more offers into Africa. Suppliers will be looking to establish market share before the arrival of US material in Summer.
Demand is expected to remain subdued over summer, as availability improves and buyers are able to choose volumes from a variety of sources. A combination of the summer lull and the rainy season may also weaken buying appetites progressively into the quarter. An improvement in Asian demand levels may cause a similar reaction in Africa, as buyers look to secure material before prices rise.
Supply in southeast Asia is expected to lengthen in the second quarter, as plants in Thailand and Japan have resumed operations after previous turnarounds. However, a heavy turnaround schedule in China may result in more import cargoes diverted there to plug potential demand gaps, resulting in limited import volumes into southeast Asia.
Demand is likely to be subdued at the start of the second quarter. In Indonesia, the government’s efforts to reinforce the country’s tax-collecting base has caused some unease among buyers. Buying appetite for PP resins in Thailand is also likely to remain subdued in the first half of the second quarter due to the Songkran holiday. Buying momentum may pick up in the second half of the quarter, as demand typically picks up ahead of the Eid ul-Fitr holidays celebrated by Muslim countries in the region.
PP supply is expected to remain fairly constant into the second quarter, with the potential for more imports, if Asian prices continue to slip. PP will not face the onslaught of imports that is expected from ethane-based production in North America. Upstream propylene is expected to remain balanced to tight, with sources saying any problems at the cracker could lead to PP supply issues.
PP demand is expected to continue to grow at a steady pace, and supply and demand are expected to remain balanced throughout the year. An increase in imported volumes could change the balance a little, but much depends on Asia, and how prices evolve there.
Supply is about to increase in Latin America for Q2 because Mexico’s producer Indelpro will be finishing the first phase of an expansion. The initial increase will be 30-40K tonnes/year. Additionally, increased production of propylene in the US Gulf is likely to improve production of companies such as Esenttia (Formerly known as Propilco) in Colombia, which receives part of its propylene from the US Gulf. Increase availability of propylene can foster more exports of PP from Colombia.
Latin America’s PP demand is expected to have the GDP-related increases during Q2. The only real variable will be the status of the diverse economies in the region and the impact of presidential elections in several countries. There will be some political uncertainty in Mexico and Brazil while Peru is currently undergoing a change of president. Venezuela remains in turmoil, with soaring inflation and shortages of basic consumer items. Demand in that country has fallen more than 50% in recent months, according to local sources. Brazil is slowly emerging from its constitutional crisis, but demand will likely be flat in the next few months.
Supply in the region is slated to increase in the weeks ahead, boosted by the completion of maintenance activities at regional production facilities in Q1. However, a busy maintenance turnaround season coming up in China and the ability to realise better netbacks there in view of low freight costs would likely limiting sellers’ allocations to other regions, including the Middle East.
A need to build stocks ahead of the peak demand month of Ramadan that begins in mid-May is likely to spur demand from processors in the region in early Q2 and may lend support to prices in the weeks ahead. Demand is likely to see a seasonal slowdown from mid-May with the onset of Ramadan, remain soft until mid-June, and recover after the Eid ul-Fitr holidays in late June.
Supply levels are likely to improve, despite prices falling from their global high. As the Asian market has cooled and Middle East maintenance periods ended, many sellers have turned to face Turkey. PP will likely remain tight for some grades, however, following shortages across the world for most of the year.
Demand will be affected by improving supply levels from the Middle East and potentially the leaving buyers comfortable to step away from the market. Demand for fibre could remain high if it is difficult to source. Demand will drop off completely during Ramadan at the end of the quarter. There may also be a pick up before the associated holiday period, as players stock up.
PP operating rates are anticipated to be higher in the second quarter as declining feedstock costs will encourage PP producers and downstream converters to raise operating rates to rebuild inventories depleted in the first quarter.
PP demand in the second quarter is expected to gain ground as buyers who had using inventories and imports to hedge against higher prices in the first quarter, while raise operating rates and return to consuming domestic material to rebuild depleted inventory levels.
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Polypropylene Asia Margin Report Methodology
Polypropylene China Margin Report Methodology
Polypropylene Europe Margin Report Methodology
Polypropylene Europe price forecast methodology
Polypropylene US Margin Report methodology
Polypropylene US price forecast methodology
Polypropylene (PP) is a colourless, translucent to transparent solid with a glossy surface. It has good resistance to acids, alkalis, inorganic chemicals and organic chemicals with the exception of hydrocarbons and chlorinated compounds.
It has improved impact strength, a higher softening point, lower density, better stress cracking and more scratch resistance than other polyolefins. However, a disadvantage of this polymer is its brittleness at low temperatures.
Polypropylene was first produced in a slurry process using Ziegler-Natta catalysts. Bulk phase technologies were then developed while higher activity catalysts enabled gas phase processes to be used. A combination of bulk phase tubular and gas phase reactors has become a popular process.
PP has key applications in packaging, fibres and automotive parts. PP can be extruded for pipe, conduit, wire and cable, while atactic PP has outlets in paper laminating, sealants and adhesives.