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
Updated to Q2 2019
Africa
Production issues in the Middle East limited availability at the start of the second quarter. More attractive netbacks in other regions, such as Turkey and Europe, also reduced available offers in the region. Production was also hit by Ramadan, which sees Middle Eastern producers cut plant working time. Supply has come back into balance with demand in June, as production problems were rectified and buying interest waned during the summer holidays.
Order levels remained healthy but not exceeding expectations, even when strain was placed on supply streams. As June began, the US-China trade war saw Chinese PP prices fall steeply. African players stepped back, as they expected the trend to be repeated in other markets. Buying interest has now fallen away as early June offers began discounts, undermining any attempts by suppliers to maintain price levels.
Asia
Spot availability was tight between April and May amid a heavy slate of both planned and unplanned outages in the Middle East and southeast Asia. However, supply improved in June, particularly in Vietnam where there was an incursion of competitively-priced exports from China. Chinese suppliers turned to the export market to offload more spot volumes, driven by narrower margins in the local market where prices experienced sharp declines due to high domestic inventory levels.
Volatility in global macroeconomic conditions undermined sentiment in Q2, with escalating trade tensions between the US and China the primary cause of weak demand. Poor manufacturing indicators further dampened consumer appetite. Converters were consequently reluctant to commit to deals in early June; keen to hold out for lower prices amid concerns of price erosions down the road. Import enquiries were further limited by a holiday-shortened month in Indonesia and Malaysia due to the Eid ul-Fitr holidays.
Europe
Polypropylene (PP) supply in Europe was ample in Q1, but prices were not affected, with spot only easing back once crude and naphtha began to slip in end-May/June. Imports have not been a feature of the PP market and Q2 was no exception. Price erosion in Asia did not lead to any increased imports, but more began to be heard by the end of June.
PP demand was sustained at contracted accounts in Q2, but spot and distribution activity was poor, particularly at the end of the quarter when crude and naphtha fell. Buyers bought only what they needed on expectations of lower prices to come. Some Q2 demand was thought to be down to stocking as buyers were worried about supply issues due to planned cracker outages. In the end, there were none.
Middle East
Middle Eastern PP supply stayed tight in early Q2, capped by some scheduled as well as unplanned outages at regional units early in the year. Strong demand emerging from Asia capped regional availability going into May that spurred greater uptake of Middle Eastern product, although the tightness was offset to some extent by the Ramadan lull. Availability remained unchanged through June with limited change in supply levels after the Eid ul-Fitr holiday.
Middle Eastern PP demand emerged stable early in the quarter but tapered off May onwards with the onset of Ramadan, a traditionally slow period for most polymer purchases. Downstream demand shrunk, with shorter working hours at regional PP processing units. Demand stayed weak in H1 June owing to the Eid ul-Fitr holiday. Significant uncertainty in the wake of US-China trade war that contributed to a lack of clear market direction further limited uptake in June.
Turkey
Fibre supply was strained at the beginning of the quarter, as the high season saw demand prices climb. A large price gap opened between fibre and raffia prices. The improved netbacks attracted a variety of offers, including China, as demand there faltered. As seasonal demand ended, supply improved as importers chased high prices. Availability has remained constrained but enough for limited demand.
The quarter began with strong demand as production issues in the Middle East affected availability during the high fibre season. This tailed off, following depreciation in the value of the Turkish lira against the US dollar and political uncertainty. The re-run of the Istanbul mayoral election only stretched out unease. Ramadan is traditionally a quiet period anyway but demand remained muted in June as players held their position to observe the market.
US
PP supply remained sufficient during the second quarter in spite of a number of plant issues, including a force majeure at the largest US PP plant. Import availability remained healthy even though arbitrage economics from other regions became less favourable. Sufficient supply for propylene monomer also encouraged higher operating rates at PP plants. Overall production capacity rose year on year owing to some debottlenecking projects carried out during 2018.
PP demand was stable to slower in the second quarter. A drop in global automotive sales limited consumption growth into a key market for PP while signs of a global manufacturing slowdown weighed on the chemical sector more generally. An anticipated up-tick in domestic demand stemming from import displacement failed to materialise as imports continued to move in even as arbitrage economics grew less favourable.
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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 (PP) is one of the most versatile of the bulk polymers. Its intrinsic properties of high stiffness, good tensile strength, good processability and inertness towards acid
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This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP Asia report.
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This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP China report.
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Polypropylene Europe Margin Report Methodology
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP Europe report.
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The ICIS Polypropylene (PP) price forecasting model is a brief monthly publication that can be accessed via the Dashboard.
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The main method of PP manufacture is by using refinery grade propylene (RGP), produced by a refinery, to convert to polymer grade propylene (PGP) through a superfractionation unit.
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The ICIS Polypropylene (PP) USA price forecast report is a monthly publication that can be accessed via the Dashboard.
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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.
Olefins
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Join us at the 8th ICIS European Butadiene & Derivatives Conference (11 – 12 September, Vienna, Austria) to ensure that you get the most relevant information, including regional updates, a new focus on rubber recycling as well as supply and demand trends from industry leaders plus ample networking time during this turbulent time.