Europe PP players treading softly into May, price decreases unlikely

03 May 2018 12:58 Source:ICIS News

LONDON (ICIS)--European polypropylene (PP) buyers and sellers are approaching the market cautiously in May, and the success of sellers’ targets for higher prices depends on the level of demand for the month.

One thing that was clear was that prices are not going down, however.

Buyers said some sellers were looking for spread improvement following the monomer settlement at a €25/tonne increase, but demand has been slightly below expectations for some sellers.

Therefore, for the moment pushback from buyers has been strong.

Buyers at the low end of the pricing spectrum could realistically face some upward movement, but the level was so far unclear.

“Margin improvement is difficult,” admitted one supplier.

PP buyers are fairly relaxed at present as there are no shortages in the market, but nor is there any length.

Buyers have no difficulty getting hold of what they need and upstream propylene shortages have not occurred, so they are comfortable.

However, that does not mean to say they are sometimes not forced to pay higher prices.

“I haven’t paid the full 25 [€/tonne],” said one. “But I’ve had to pay 10-15 [€/tonne].”

Talks were expected to continue into next week, and the level of demand then would determine how prices fared.

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

Picture source: Tom Hoenig/WestEnd61/REX/Shutterstock

By Linda Naylor