Europe March PP prices continue to buck recent volatile trend

Focus article by Linda Naylor

LONDON (ICIS)–Polypropylene (PP) prices in March are rolling over, remaining at the same level since January, following a period of volatility that has lasted several years, sources said on Monday.

 “I have rolled over with all my suppliers, but haven’t had any difficulty getting hold of what I need,” said a buyer.

“We have had a very clear rollover,” said another.

Buying remains cautious, however, as visibility is short term and converters do not want high stocks with pricing so uncertain.

“It’s very quiet,” said one player, “producers are not pushing to sell and buyers are not buying more than they need.”

Some sellers saw the market as tight, because of a series of ongoing minor production issues but also tightness upstream in the propylene sector.

LyondellBasell’s force majeure at Carrington, called on 12 February, has not been officially rescinded, according to buyers, but the situation was described as a headache rather than a crisis.

Some buyers said they had had difficulty with supply from Total Petrochemicals but there was no comment from either company on the status of their operations.

Rollover pricing in the PP market mirrors the upstream monomer movement. The propylene monomer contract has remained at the same level, €1,130/tonne FD (free delivered) NWE (northwest Europe), since January.

European propylene supply is tight because of low operating rates at crackers and better-than-expected demand. Spot prices for polymer grade are on a par with the March contract price of €1,130/tonne FD NWE.

Some monomer sources expect premiums over the propylene contract price to be workable but, on the whole, derivative producers still talk about a lack of affordability at anything above the contract price.

Net copolymer PP prices remain at €1,300/tonne FD NWE and sometimes below. Homopolymer injection prices were reported €40-50/tonne below this level.

Some sources cautioned that PP demand was not particularly strong, and it was reduced output and production issues that kept the market in balance.

The spot market has been steady, and business just ticking along.

PP is used widely in the household goods and packaging sectors. It is also used in the automotive industry.