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 2020
Production outages in the Middle East and Asia affected availability running up to Q2. Production issues affected supply in Q1, meaning there was little product stored across Africa. However, low demand in Q2 meant supply was not strained as social restrictions were put into place to combat the coronavirus.
Demand for many sectors suffered through Q2, as night-time curfews closed the leisure industries. Packaging was the strongest of the sectors, but many producers shifted their production to non-woven and BOPP, which are used in personal protective equipment. Demand was down overall, even in the more robust sectors and only improved towards the end of the quarter, as prices started to rise. End-user demand remained poor.
Supply in China was initially ample, with new capacities, including LiHe Zhixin, having come online towards end-March. China’s import volumes rose year on year, as foreign suppliers opted to push as much material as possible to the Chinese market. Export outlets in southeast Asia were limited, with trade in the region hampered by nationwide lockdowns in place. Availability tightened in the second half of Q2, with producers having successfully offloaded large volumes to China.
With signs that the worst from the virus-induced lockdowns may have passed, China’s demand picked up in Q2. The Chinese government loosened lockdown restrictions and encouraged factories to resume production, while implementing a series of policies to stabilise employment and promote consumption. Converters’ operating rates gradually resumed to pre-coronavirus levels. However, demand in southeast Asia deteriorated. Converters cut run rates or shut completely to comply with government-imposed movement-restriction measures.
Updated to Q1 2020
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.
Updated to Q2 2020
Q2 PP supply was balanced in relation to strong demand from certain sectors, but poor automotive demand affected copolymer supply in particular. Imports remained relatively low and had a minimal impact. Strong demand in medical and food packaging kept the market balanced in April and May, but not to the extent seen in the associated PE market. June demand began to wane, and supply was becoming amply available.
PP demand for packaging and non-woven demand for medical applications was strong in Q2. Automotive demand improved a little, but at 10-11% of the total European PP volume, copolymer demand weakened. There was some substitution between grades where possible, but this was not a simple process. Export activity was very good and imports were below normal levels as European prices did not present an attractive opportunity.
Q2 supply was reduced slightly as feedstock propylene availability was limited by reduced refinery utilisation rates amid lacking transportation fuel demand resulting from quarantines and isolation measures. Reductions occurred in Chile and Argentina where lockdowns have been more restrictive.
Latin America’s PP demand from industrial, automotive, appliances and electronics sectors was lower in Q2. Consumption of non-woven and film applications for food packaging, hygiene and medical products maintained its momentum amid the pandemic, but overall demand was lower.
Early Q2 supply emerged higher than Q1, following completion of maintenance at some producer units. The pandemic spread within the region caused some disruptions, with a prolonged outage at one regional unit affecting overall availability. Greater allocations to Asia due to higher demand and netbacks cut regional supply mid-Q2 onwards. Regional producers focused on producing grades that saw robust uptake in food, hygiene and medical packaging sectors and cut back on supply of other grades.
Early Q2 demand weakened as regional countries imposed lockdowns and restrictions in their attempts to curb the pandemic spread. Demand for household and other non-essential goods plunged, though food, hygiene and pharmaceutical packaging demand strengthened. A slowdown during Ramadan and the Eid holiday limited uptake in late April and May. Demand recovery in June stayed gradual and scattered across different grades following a continued pandemic spread, even as countries lifted lockdowns to spur economic activity.
Supply was bolstered at the beginning of Q2 by some buyers cancelling orders for material that was already in transit. This left suppliers desperate to place material. Following this availability suffered, as ready material was short and production capacity at many Middle East suppliers was reduced. Ready material was preferred but rarely available and the closed Turkey/ Iran border provided another barrier.
Fibre demand saw a major drop, as it is mostly used in the carpet and rug production industry and sold for export. All major export markets were closed due to lockdown measures. Many converters closed their plants completely, only opening them up at reduced capacity towards the end of Q2. Raffia demand also fell but still saw some demand from packaging. Demand began to pick up in June, but this has since flattened.
PP supplies remained comfortable in the US during Q2 as overall consumption levels declined due to the economic contraction stemming from the coronavirus outbreak and subsequent containment measures. Some production issues during the quarter caused periods of tightness in promptly available cargoes, but the slump in overall demand prevented any real tightening in the market.
PP demand was down overall during Q2, although considerable variation was recorded between different sectors. Demand for packaging applications was strong while fibre and non-woven grades used to manufacture medical masks and gowns saw an considerable uptick in demand. Demand for applications going into the automotive and appliance sectors was weak while copolymer demand overall fell relative to demand for homopolymer grades.
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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