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 2019
New Asian and Russian-based production capacity eased repeated issues with shortness in the second half of the year. PP prices fell as supply levels improved. Changes to regulations on imports in Algeria scared away some suppliers, limiting availability towards the end of 2019. Limited access to foreign exchange in west Africa left some buyers unable to pay for deliveries.
Demand remained low and flat in the final quarter of 2019. Stock levels were healthy through the quarter. Poor end-user demand meant that there was little pressure on inventory. West Africa suffered from heavy rains, which limited consumer demand, as it kept people off the streets. Demand was generally down across the region, due to economic and political uncertainty.
In China, concerns over oversupply weighed on the polypropylene (PP) market in mid-to-end 2019. Three new PP plants started commercial operations before end-August 2019, and another two new PP plants were running at full operating rates in October. In southeast Asia, supply was ample relative to demand. Some producers reduced operating rates towards the end of the year in view of increasingly squeezed margins, as firmer upstream feedstock values failed to prop up prices further downstream.
Demand across Asia was tepid for most of the last quarter of 2019, with a fragile economic climate limiting converters’ buying appetite. Converters have also adjusted their replenishment patterns in order to cope with trade tensions. Buyers generally shunned the prospect of building up stocks. Many strove to keep inventory levels as lean as possible and accomplished this by opting for shorter replenishment cycles – procuring smaller volumes more frequently.
There was ample PP supply in Europe by the end of 2019. Demand was lower than expected and buyers aimed to end the year with low stocks. New production capacity in Russia has not made much of an impact so far in Europe, and product that has been offered is at current price levels, not below. High rates at the cracker and no impact from planned cracker closures left propylene, and hence PP supply, long.
PP volumes have grown in 2019 in Europe, at a lower rate than usual, but well above 1%. Lower demand and increasing supply mean that end-year contractual pricing discussions were taking place at more advantageous conditions for buyers for the year ahead. December PP volumes were weaker than expected. This can be put down to many buyers aiming to end the year with low stocks, for accounting purposes, but also to a slowing global economy.
Polypropylene (PP) supply levels stayed healthy. An additional pile-up in inventories emerged on the back of limited demand amid uncertainty surrounding the US-China trade war. Attempts to maintain lean inventories at the end of the financial year also left sellers flushed with stocks late in the quarter.
The uncertain economic climate amid the China-US trade war led to purchases done only on a need-to basis, as buyers were not keen to build stocks. Regional demand was also largely flat with little growth seen, amid sluggish economic performance that continued to weigh on packaging demand.
Production expansions in Asia and Russia led to increased length in the market in 2019. Russian raffia was pushed heavily into Turkey, leading to a weakening of price levels. The increased length led to reticence from buyers, who knew that prices were falling, meaning there was little competition for purchases. The attack on Saudi infrastructure had little effect on supply, due to poor demand levels, although prices spiked briefly in reaction.
Demand weakened before staying low and flat. The increasing prevalence of Russian-origin material affected sentiment, as buyers saw prices tumble. The attack on Saudi infrastructure caused an initial interest in buying but this died away once it became apparent that supplies would not be disrupted significantly. Demand dropped off in December as players focused on clearing their stocks for the end of the year.
US polypropylene (PP) supply remained long even as average operating rates declined. Two extended plant shutdowns limited production while some plants were heard to have reduced operating rates. Inventory levels remained close to multi-year levels despite the drop in operating rates. Overall capacity rose due as some debottlenecking projects were concluded during the quarter.
Demand for PP remained sluggish amid an ongoing slowdown in the manufacturing activity in both the US and around the world. Data from the Institute for Supply Management (ISM) showed that US manufacturing activity contracted in October, November and December, with December being the fifth consecutive month of contraction. Interpolymer competition created some new demand outlets for PP as PP displaced polystyrene (PS) in some applications.
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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