March propylene rises in Europe, Med PP markets begin March with price hikes

As an initial March propylene contract price was settled in the European market last week with an additional increase of €35/ton from the February contract settlement, price hikes have emerged in Italy’s spot PP market for the month of March, as per Chemorbis. Due to persistent supply worries stemming from unexpected propylene outages and the approaching maintenance season for propylene units in Europe, PP players were already seeing firm spot propylene prices as an indicator of higher March contract prices and firmer initial March PP offers in turn. Over the week, PP sellers reported seeking increases of €30-75/ton on their March spot PP offers, with price hikes of €70-75/ton coming officially from the regional producers. A source at a West European producer reported that their PP availability is limited due to the tight propylene supplies in the region, and are supported to ask for larger increases to not hurt their margins. European sellers had suffered from lackluster demand from Italian buyers over the month of February, with most deals reported on hand to mouth basis as buyers were mainly in a waiting stance due to low end-demand. Taking their main support from claims of low supply levels and the upcoming high season, sellers hope to achieve better sales this month, although Italian buyers argue that only small hikes in line with propylene would be obtainable this month as demand still does not show a spectacular performance in Italy. In Egypt, where the slow performance of PP end-product markets had also brought widespread complaints about poor market activity over the course of February, a major Middle Eastern producer nevertheless revealed their March PP offers with increases of US$20-30/ton, which was followed by another regional producer who elected to lift their March PP raffia, injection and fibre offers by US$20/ton, bringing their prices to a similar level. Another supplier from the region, who had been offering relatively competitive prices compared to other regional producers last month, came with a larger increase of US$70/ton for March. Although converters started to voice better demand for their end-products, some buyers objected to higher March levels pointing to competitive offers in the distribution market and comfortable availability. Meanwhile, the country’s PP market also saw an upward revision from the domestic producer yesterday. The company raised their prices by EGP220/ton (US$40/ton) from last month.
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