Polypropylene (PP) prices are rising in Europe this month on higher feedstock costs that lead to a further reduction in margins, according to ICIS. The June propylene contract is now fully established at €565/ton ($796/ton), up by €45/ton from May and by €110/ton since February. Prices are rising to the level where it will not be possible for producers to recover their fixed costs. The past few weeks has seen stable PP prices despite successive price hikes in upstream propylene contracts. Producers said there was more of a sense of urgency in June compared with recent months as naphtha and crude oil prices rose amid decreased cracker margins. European demand remained flat and cracker output was estimated to be at 75-80% of capacity. Domestic market in Europe is still supported by strong export volumes and June order books were full. July is also now presenting unexpectedly good opportunities for sellers, as prices began to rise again in Asia.