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 2021
PP supply lengthened at the start of the quarter as Chinese origin material was offered for very competitive prices, sometimes $300/tonne cheaper than Middle East origin volumes. As the price gap has closed between the two regions, towards the end of the quarter, Chinese origin material has become unviable. Delivery times and costs from Asia increased throughout the year but jumped significantly in June. Availability has moved into a snug position at the end of the quarter.
Q2 demand slowed, on both seasonal factors and as a result of falling prices. Buyers limited their purchases and waited for prices to hit the lowest possible point. That point had not yet arrived at the end of the quarter. A drought in west Africa also limited availability of power, from hydroelectric power stations, in west Africa. Converters had to reduce their production out by up to 70%.
Supply lengthened in Q2 as new complexes in China began commercial operation and some Middle Eastern producers completed their maintenance plans. In addition, PP consumption slowed down due to weaker demand as a result of corroded margins for converters and pessimism over end-product sales following a resurgence of the COVID-19 pandemic. High freight costs to other regions also saw more PP suppliers push their cargoes to southeast Asia.
Demand weakened as converters struggled to pass on the increase in raw material costs to their customers. Some converters reduced their operating rates as a result. Buying sentiment was further dampened by a new wave of the coronavirus pandemic across Asia, which disrupted production activities and impacted end-product demand. In China, power supply shortages in the southern regions amid rising temperatures caused some downstream factories in Guangdong to either suspend or curtail operations.
Supply remained extremely tight in Q2, but there was some easing towards the end of the quarter as imports began to arrive. Logistical and transport issues have meant fewer imports than initially expected, and local suppliers’ stocks are still very low, with sources expecting it to take several weeks for them to become re-established. Several production issues have continued to maintain tension, and some new cases of force majeure have been called.
Demand was mixed in Q2, with some buyers continuing to report very tight supply. Imports have not been available for many converters whose supply remains tight. As spot prices have fallen, some smaller buyers with stocks were waiting to buy and for prices to fall further, while large packaging buyers bought as normal. Contractual volumes moved normally, and although industry inventory levels are low, volumes are fulfilled. ”
Latin America PP supply remained tight in Q2. Production in Mexico and Colombia faced reduced feedstock imports from the US and utilisation rates decreased. Colombia imports and exports are both lower as sales for exports allocations sell quickly. Availability for PP exports has been mostly unavailable. Import tax relief for homopolyers to Brazil incentivised imports, Imports are also supported by an appreciated Brazilian real after rallying late in Q2, supported by rising interest rates.
PP demand remained strong in Q2 for most regional markets. Industrial activity in Brazil, Mexico and Argentina has stagnated and low GDP projections limit demand upside. Reduced vehicle production in Brazil has slowed significantly after Ford suspended operations and is limiting demand from the sector. Non-woven demand for PPE and film grade demand for packaging remain stronger. Injection grades also have strong demand for bottles, caps and other essential goods packaging needs.
Availability lengthened in Q2 and remained adequate through the quarter. With plants in the US resuming operations after disruptions caused by the polar storm in February, demand for Middle Eastern imports in the US and Latin America declined, releasing material for other markets including the GCC. The completion of turnarounds at a few Middle Eastern units also contributed to better supply from regional producers.
Trade waned in early Q2 with the onset of Ramadan in mid-April. There was some boost to buying driven by restocking after the Eid ul-Fitr holidays in June, but the continued losses in prices and lengthier supply capped bulk purchasing, as buyers kept to need-based buying and avoided building stocks. The absence of any significant demand increase in Asia, a key consuming market further weighed on volumes booked.
Availability lengthened early in the quarter as Chinese origin product was made available in Turkey, significantly undercutting Middle East offers. These are still available but are become unworkable towards the end of the quarter, as the price gap between China and the Middle East closed. Large freight charges and long delays to delivery also put buyers off cargo from Asia.
Demand climbed at the end of the quarter, once price levels flattened out and began rebounding. Prior to this demand levels were nearly non existent, with May being a low point. Sellers struggled to shift their full spot allocations during this month.
Supplies remained tight through Q2, although availability gradually improved relative to Q1, when the mid-February winter storm in Texas caused over 80% of US PP plants to be taken offline, at least temporarily. While average operating rates and stock levels rose compared to the previous quarter, most buyers continued to face material shortages, as strong demand made it challenging for the industry to restore balanced supply levels.
Demand remained strong across Q2 due to persistent strength in manufacturing activity, as well as elevated demand for packaging and fibre applications caused by pandemic-induced changes in consumer behaviour. The ongoing US economic recovery has been primarily driven by increased demand for manufactured goods. Demand remained strong, even as prices exceeded the thresholds traditionally associated with demand destruction.
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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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