PP prices in Europe rose

- Mar 08, 2019-

European polypropylene prices rose in March, but most buyers said the market was not tightening.

- contract price of propylene increased by 25 euros/ton

- pre-brexit purchases, disruption of pyrolysis units

The contract price of propylene rose by 25 euros per ton in March, and most sellers have managed to get that price -- or at least a significant portion of it -- into the market.

A price increase of up to 40 euros per ton is also under discussion.

Several manufacturers said * quarterly demand was strong, but smaller vendors were not buying the story as some applications, such as cars and bidirectional stretch polypropylene (BOPP), were facing tough conditions.

Stock up

Buying early is one reason demand is strong.

Many buyers have braced for what some upstream suppliers have called a "crisis month" as a series of planned overhauls of the pyrolysis unit could lead to potential supply problems.

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Overhaul plan of 2019 cracking unit

Buying in advance is also common in the UK, where buyers have been preparing for brexit.

In march, buyers and sellers alike began to get nervous as the official date for brexit, March 29, approached and there was no sign of a deal.

Any inventory in the UK will inevitably lead to a period of destocking, which could also affect demand on the continent.

At the same time, the price of polypropylene rose in March, and in some cases the monomer/polymer spread has widened.

Spot prices of polypropylene homopolymer FD have risen to a high of 1,100 euros per ton in northwestern Europe.

"This is the first time in months * we have seen spot prices above net contract prices," said one buyer.

Polypropylene is used in packaging, household goods manufacturing, and the automotive industry.