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 Q4 2020
African PP supply was significantly down throughout the course of Q4. Sellers reduced allocations to most regions and sent their product to Asia, where prices were very attractive. The global container crisis also exacerbated the shortage, making it too expensive for some sellers to supply to Africa. South Korean players were essentially priced out of the market due to the massive hikes in freight cost.
Demand stayed largely flat overall, spikes in buying interest were caused by lack of availability, rather than underlying demand. Many countries are struggling to recover to pre-coronavirus levels. Those that rely on exports of crude oil and tourism are facing particular challenges to bring their economies back to previous levels. South Africa and Egypt experienced the strongest recoveries in Q4, although sellers in South Africa expect this to be short lived.
Logistics disruptions led to tight supply, especially for deliveries to southeast Asian destinations. In addition, the supply pressure from plant start-ups in China was weaker than expected, with only Yantai Wanhua and Shaanxi Yanchang Coal Yulin bringing their new PP plants onstream, while other projects were delayed.
Downstream demand remained strong and buyers were keen to secure prompt deliveries in order to keep their production running. The pandemic continued to fuel demand for plastic packaging products, although demand for certain PP grades were less robust for other applications such as automotives. Some overseas orders of finished plastic goods were also transferred to China as the pandemic accelerated in other parts of the world.
PP supply tightened throughout Q4, mainly on an increased number of exports as netbacks have been better in other regions. European net prices have been low in global terms for months, so imports have also been lower in volume. The impact of greater export and fewer imports led to tightness, and by the end of the year, once buyers realised that supply had tightened considerably, some producers were already closing their order books for January.
Local PP demand in Q4 2020 firmed as the quarter progressed, as it became clear that there were some supply issues, and feedstocks also firmed. Tightness was down to increased exports and fewer imports, and also increased demand from the UK, where buyers aimed to build some safety stock ahead of Brexit. By the end of the year demand for spot product increased, as supply tightened, but material was not always available.
PP supply remained very tight in Q4 amid shorter propylene feedstocks due to lower refinery rates. Reduced PP production in the region and globally in addition to devalued local currencies, container shortages and increased freight rates are affecting imported trade volumes. Limited export availability for several months from the US due to hurricanes and reduced availability of material from Colombia.
Demand for PP in Q4 was strong in most regional countries resulting from strong recovery of industrial activity and improved durable goods demand for automobiles, appliances, electronics. BOPP film grade demand remained strong on packaging needs for essential goods. Demand increased for films and non-woven material were observed from both the agricultural sector and for personal protective equipment (PPE).
Q4 supply stayed restricted following disruptions at Middle Eastern and Asian facilities earlier in the year, keeping the spotlight on Middle Eastern exports to Asia. Supply disruptions in the US because of back-to-back hurricanes hampered availability there, and created a pull for Asian cargoes, drawing volumes away from Asia and adding to the overall supply gap. Firmer netbacks realised by Middle Eastern producers in Asia further curbed allocations within the Middle East.
Q4 PP demand improved as countries attempted to return to pre-pandemic trade levels and following a post-pandemic recovery in uptake in key demand segments. Food and hygiene packaging demand stayed strong, although some food packaging sectors saw a slight dip from levels during the lockdown months. Demand for household and consumer goods previously considered non-essentials experienced a gradual recovery. Buying sentiment and uptake saw a boost fuelled by tight supply and higher Asian netbacks.
Competition from Asia limited availability throughout Q4. High prices in that region saw sellers shifting allocations east. The lack of global shipping containers also reduced offers into Turkey. Those that did make offers saw their material priced out of the market, if they originated from further afield. Iranian volumes were largely absent from Turkey for October and November, with Iranian producers also preferring the Asian market.
Demand for fibre grade grew significantly in Q4, as the onset of winter combined with many European countries returning to lockdown. This drive sales for carpets and home furnishings. Raffia demand also improved. Shortness probably also drove demand to some extent, as low prices throughout the year prevented much natural stock build in Turkey, leaving buyers unable to rely on domestic capacity when imports ran low.
Supply remained tight throughout Q4 despite expectations that the resolution of hurricane-related plant disruptions in 2020, along with the start-up of Braskem’s new plant, would ease the situation. Monomer shortages limited operating rates in many cases, while some plants continued to experience production disruptions. Inventory levels remained near multi-year lows as the industry struggled to restore regular supply levels.
US demand was strong during Q4, bringing full-year totals for 2020 consumption above 2019 levels. Demand for durable goods applications such as automotive parts and appliances gained strength amid an expansion in US manufacturing activity. Demand for some non-durable applications such as packaging and fibre remained strong as it has been throughout the course of the pandemic.
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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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