Europe PP prices at highest level since October 2015, in line with global trend

LONDON (ICIS)–Polypropylene (PP) prices in Europe are at their highest level since October 2015, according to ICIS data on Monday.

They are far from their 2015 peak, however.

The upward move is reflected in pricing globally, as Asian prices also showed, rising to their highest level in 18 months in February.

US prices have also soared in 2017, taking a 10 cts/lb hit in January and sources said that February increases could take another big upward hit, suggesting the 6-7 cts/lb nominations in the propylene contract could be a minimum hike for the downstream PP market.

Prices in Turkey and Africa have also risen sharply in February.

The cracker turnaround season, along with good demand and fewer imports, are having a tightening effect on PP supply although not all grades are by any means short, according to buyers.

“I feel I am getting everything I need,” said a large buyer. “[There are] a couple of trucks that are proving difficult to get. It’s balanced to tight.”

This was a sentiment echoed throughout the market – some grades were available, while others were getting tight, according to buyers.

Sellers were bullish.

“PP is flying,” said a producer.

Spot prices have also been moving up, and sellers are very confident.

“PP will be tight for the whole year,” continued the producer.

The European cracker shutdowns, beginning imminently, are expected to affect propylene more than ethylene, and there was talk of tight, even short, monomer supply in April.

PP is used in packaging, the manufacture of household goods, and also in the automotive sector.