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 Q1 2020
Production outages in the Middle East, Europe and Egypt, both planned and unplanned, limited availability across the whole quarter. Novel sources of PP became available in March, from southeast Asia, that eased shortages to some extent. Allocations from Middle East remained low until the end of the quarter.
Demand rose steadily at the start of the year, as the lack of supply put upwards pressure on prices. This reached a steady but unspectacular level through the remainder of the quarter before collapsing towards the end. The acceleration in the spread of coronavirus brought lockdown measures in many countries, drastically reducing demand.
PP domestic production volumes in Q1 increased compared with that in last year, even though part of domestic producers cut their running rates in February to control their inventory levels. New capacities from Zhejiang Petrochemical and Hengli Petrochemical in Q1 made domestic supply more ample.
Demand remained weak in Q1. The coronavirus pandemic saw downstream factories delay the resumption of production for a month because of logistics restriction and regional lockdowns in February. Downstream demand improved a little bit in early March. However, domestic downstream producers purchased on a need-to basis as they were wary about the outlook amid the overseas coronavirus outbreak.
The Chinese and southeast Asian import market saw an influx of duty-exempt cargoes from supply sources that do not actively and regularly engage in discussions in the export markets. The main priority for many of these producers is to clear off as much on-hand stock as possible. Suppliers feared that inventory levels would accumulate on slow demand and were seeking to minimize storage costs. Hence, most opted to slash offers aggressively to offload the cargoes.
Coronavirus-related lockdowns across Asia dampened sentiment and led to severe demand erosion. Only demand for limited non-woven and random copolymer grades was supported by a sudden surge in buying of essential products, stemming from consumers’ panic-buying trends. Most other grades saw reduced demand on shrinking downstream consumption of non-essential finished goods. Some converters requested to reduce contractual obligations with their suppliers, while others requested to move some allocation volumes to later months.
Supply for critical sectors such as food packaging, health and hygiene, and medical supplies, is available, but has tightened as the pandemic has led to very strong demand. However, this has been offset by very weak sectors, such as the automotive industry, which was already weak and has suffered further hits with recent closures. By the end of Q1, some suppliers were considering switching PP destined for the automotive sector to more critical sectors.
PP demand for critical sectors such as food packaging, health and hygiene and medical supplies has been very strong. Automotive and rigid industrial applications have been very weak, given the recent closures, on top of already weakened demand. Horticultural demand has also been soft, along with most non-essential applications.
Middle Eastern supply emerged tight early in the year, owing to a busy maintenance schedule among a majority of regional producers that limited supply volumes for most of Q1. A delay in the start-up of some new plants in Asia further curbed Middle Eastern supply as Asian markets competed for Middle East volumes. Supply levels improved towards the end of the quarter following the completion of maintenance at some producer units.
Q1 demand emerged strong, propped up by a need to replenish stocks early in the new year. A need to restock ahead of Ramadan also upheld demand. Demand fell from H2 March as a spike in the number of coronavirus cases within Gulf Cooperation Council countries caused them to restrict the movement of people, goods and services. A drop in consumer and household goods purchases has affected demand, although grocery, foods and medication continue to be sought.
Production outages and a lack of ready materials meant that availability was limited in the first quarter. A two-month-long planned maintenance period at Egyptian producer EPPC caused major damage to supply levels in Turkey. High season for fibre grade PP drove sentiment, as players anticipated the seasonal spring sales peak. Availability was bolstered later in the quarter by offers from southeast Asian suppliers.
Demand grew steadily in the first half of the quarter, especially for fibre, which has a seasonal sales peak in Spring, driven by the rug and carpet manufacturing sector. Limited availability also probably encouraged buyers to secure material, especially with planed maintenance periods set for February onwards. Demand stalled and then dropped later in the month as Europe began to close it’s borders, cutting off a major export destination.
US polypropylene (PP) supply tightened during the first quarter on some unexpected production issues along with some improvement in demand during January and February. Several plants in the US experienced unexpected shutdowns or production issues during the quarter, resulting in the market tightening after several consecutive quarters of sufficient supply levels.
PP demand was healthy during January and February on some early indications that 2020 might have seen a stronger macroecnomic environment than 2019. However, demand slowed significantly in March as the coronavirus outbreak and subsequent containment measures resulted in a sharp decline in economic activity. Food packaging and medical applications saw strong demand while automotive and consumer applications weakened.
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
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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