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 Q3 2020
Availability in Africa was dented in Q3 by the increasingly attractive Chinese and European markets. Many suppliers cut their allocations to Africa, to better service the Chinese market. There were also production outages in the Middle East and Europe that reduced supply.
Weak demand is normally seen in Q3, but coronavirus restrictions up-ended traditional seasonality. Instead, demand grew steadily from a low base as lockdown restrictions were eased and local and export markets were opened up. PPE production drove demand early in the quarter, although packaging and homeware caught up.
Supply continued to increase in China, with relatively limited turnarounds scheduled in the quarter. Moreover, three new PP plants in China were put into operation in September. In contrast, spot availability of non-dutiable origin southeast Asian cargoes was crimped for a large part of the third quarter owing to plant outages. Many producers in the region opted to focus on sales in their respective local markets, leaving reduced volumes available for exports.
Downstream demand in China was relatively healthy in the third quarter, even though converters were reluctant to stock up given ample availability, with new capacities expected to come on stream in H2 2020. Southeast Asia saw weaker demand relative to China. Downstream consumption remained slow, as concerns of a potential second wave of the pandemic dampened sentiment. Competitive local prices in the respective domestic markets in the region further limited interest in imported materials.
Supply was ample in Q3 on reduced demand in some applications. The situation was mixed as some PP production transitioned towards grades where demand was strong, wherever possible, and this was very much application driven. Low prices in Europe meant there was little spot PP availability and most imports were of the structural kind for contracted business from regular importers. Sources described supply as balanced-to-tight or balanced-to-long depending on their position.
Demand began to return to normal in the packaging sector in Q3, following a surge earlier in the year. The automotive and appliance sectors began to pick up, and by the end of the quarter even the weak flooring sector had seen a recovery. August was generally stronger than expected with one producer reporting that demand in August 2020 was the best August for several years. September proved to be weak as buyers had some stock. .
Supply dropped further in Q3 as feedstock propylene availability was reduced amid lower refinery utilisation rates resulting from low transportation fuel demand due to the pandemic. Reductions occurred in Chile and Argentina where lockdowns have been more restrictive. Outages in US markets caused by hurricanes eliminated material exports in September.
Q3 demand from the industrial, automotive, appliances and electronics sectors improved incrementally each month from a dismal Q2. Consumption of non-woven and film applications for food packaging, hygiene and PPE uses maintained momentum amid the pandemic. Overall demand was still lower than last year.
Supply was limited, lending support to prices in the quarter. Availability was curtailed by greater seller allocations to China and southeast Asia, owing to stronger demand and better netbacks. Supply shortages also stemmed from production and logistical challenges at a few facilities in Saudi Arabia, amid the coronavirus pandemic. Prolonged maintenance activities at a major producer’s unit in Q2 further capped inventories and allocations.
Demand recovered in Q3, as restriction measures previously put in place during the pandemic were lifted. Uptake in the food, medical use and hygiene packaging segments was robust, with strong lifting in demand for disposable masks, sheets and single-use food packaging items seen. Products in the non-essential category, such as moulded consumer and industrial goods and packaging, stayed slow owing to largely slow downstream uplift.
Availability fluctuated through the quarter. Shortages at the start of the quarter were created by many supplies having shifted production focus to the few grades that were selling in the previous months. This improved initially but was then affected by the ramping up of interest in the Chinese market, which offered greater netbacks. Allocations to Turkey were cut and Iranian sellers largely abandoned the market until September.
Demand steadily improved. The months at the end of summer and leading into winter are the high season for fibre production. Although this started slowly, converters have gradually increased their production outputs and now most are running at 100%. Raffia has recovered at a slower pace and is still lagging behind fibre in terms of demand.
US supplies became extremely tight in Q3. The market had been tight prior to the impact of Hurricane Laura on the US Gulf in late August, which resulted in additional shutdowns and force majeure declarations from producers of PP and upstream propylene. Several of the hurricane-impacted plants remained down over an extended period. This resulted in very limited availability, especially for spot material.
PP demand rose in Q3 as overall manufacturing activity rose. Packaging and fibre applications had been strong since the onset of the pandemic while demand from the automotive sector and other consumer durable applications picked up during Q3. Year-to-date consumption remains a few percentage points below 2019 while year-on-year demand had mostly returned to pre-crisis levels by the end of Q3.
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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
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP Asia report.
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP China report.
Polypropylene Europe Margin Report Methodology
This document is intended to provide methodology support for customers receiving the ICIS Weekly Margin – PP Europe report.
The ICIS Polypropylene (PP) price forecasting model is a brief monthly publication that can be accessed via the Dashboard.
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.
The ICIS Polypropylene (PP) USA price forecast report is a monthly publication that can be accessed via the Dashboard.
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.
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