Following a round of noticeable increases on February PP deals, European sellers returned with additional hikes on their March prices to Italy and Turkey, as per Chemorbis. Though demand has not been great over the month, March price hikes have met with acceptance, with increases of €70-90/ton passing on spot deals and gentlemen’s agreements in Italy. The Turkish market saw a similar pattern, with a regular South European PP producer selling out limited allocations in this month’s earlier weeks with increases of €55-60/ton over February. This month, European producers were forced to seek further price hikes under upward pressure from higher propylene contracts, which settled €80/ton higher than February level. Although buyers had difficulty in passing on price increases from February (around €30-50/ton in Italy) higher upstream costs and tight regional supplies as a result of several shutdowns had led to another round of hikes this month. Buyers, however, have been cautious with their purchases both in Italy and Turkey, with the majority refraining from building stocks this month. In Italy, spot done deals were mainly concentrated towards the low end of the overall price range, which was formed by Central European origins for the most part. Sellers offering at the upper end of the spot range admitted that they are not able to achieve deals as some buyers are postponing their purchases to the second half of the month with the hope of finding better prices.
Indeed, the April outlook is a bit foggy as the upstream markets are tracking volatile trends due to the repercussions of the Japan earthquake and the ongoing political turmoil in the Middle East. In Europe, the PP market was under a clear upward pressure during the last four months. Now, sellers who still have limited availability are waiting to see the new propylene contracts before deciding on their pricing policy. There is widespread skepticism amongst Italian buyers that further increases will pass next month as they are stating that current prices are already too high to afford and the supply tightness is not felt so strongly due to restricted demand. The stabilizing trend in other global PP markets, along with lower spot propylene prices in Europe are supporting buyers’ expectations for the time being.