Europe PP volumes hold up despite lower propylene expectations

LONDON (ICIS)–Polypropylene (PP) volumes are holding up well in June, and business is continuing in spite of expectations of a lower propylene contract for July, sources said on Thursday.

“PP guys have woken up again,” said one trader, “after a pretty poor period.”

“PP [supply] is not so long,” said a distributor, “and June demand has been OK.”

Some buyers also said that supply was not long, and that some grades were even tight.

Much depended on the grade of PP in question, said sources. Several commodity homopolymer grades had been offered at low levels, but not all PP grades were available at low prices.

In early June, some homopolymer volumes from South Korea were available at €1,050/tonne FD (free delivered) NWE (northwest Europe), according to several sources, but new offers were said to be higher than this for future deliveries.

“I think we’ll see another drop in July,” said the distributor, “but then I can see stability in the PP market.”

A lower propylene contract was widely expected for July, based largely on a drop in upstream feedstock prices.

Expectations are for an imminent settlement.

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