After steady decreases over the past four weeks, some sellers have started to take a firmer stance this week in European PP markets, as per ChemOrbis. Bullish talk has emerged for June while an Italian buyer already reported receiving a Central European homo PP offer from his supplier with an increase of €60/ton this week. Spot PP deals for May are being wrapped up with €60-80/ton decreases from April, a fact which is justified by the €80/ton decrease of the May propylene contracts. Nevertheless, recently, sell ideas have started to be pronounced with increases, which are interpreted as efforts to reverse the market trend by some players.
A Belgium based trader reported closing May PP deals with €70-80/ton decreases from April both in Belgium and Italy. However, he said, “We are planning to raise our prices by €50/ton by the end of the month. This is because we are seeing very good demand. Plus, higher naphtha costs should have a reflection on the PP pricing in Europe.” A distributor based in North Italy, on the other hand, reported to sell only very small quantities of PP this month because of weak demand, but acknowledged there are higher sell ideas. “Even though demand remains slow in Italy, our West European supplier has warned us that they are going to raise PP prices in the near term. I cannot understand the reasons why PP prices should rise, however,” he said.
According to ChemOrbis, a buyer manufacturing garden furniture in Italy already received a €60/ton increase request for Central European homo PP when compared to the deal he concluded for the same origin only a week ago in the spot market. “We are caught by surprise by the price hike that has emerged this week, and we cannot see justification for a rising trend in the midst of unsupportive demand and lower May monomer contracts,” he commented.
The shifting trend in the rest of the global PP markets appears to have encouraged European sellers to reverse the market sentiment, according to some players. Naphtha costs have been higher recently whereas spot propylene costs are yet to respond to this amid the persistent weakness in market sentiment, others argue. Players are now waiting to see whether these increase talks will prevail and European sellers will manage to achieve higher prices in line with the global upturn.