Europe could face a rise in polypropylene imports because prices elsewhere have fallen in August due to depressed demand in the Middle East and Africa, China's devaluation of the yuan and lower feedstock costs in the US, as per industry sources in Platts.
Import prices into both Turkey and North Africa have fallen steeply in recent weeks with the lack of demand seen in July carrying over into August.
As a result offers from the Middle East have fallen over US$100/mt to both regions this month. Homo injection prices were assessed at US$1120/mt CFR North Africa Wednesday, down US$20 on the week while CFR Turkey prices were assessed at US$1191/mt, down US$76. Converters in North Africa and the Middle East had purchased no more than required in August, postponing inventory growth on bearish forward expectations.
By comparison, prices in Europe were Eur 1250/mt (US$1395/mt) FD NWE Wednesday.
The Middle East netback price was at US$1001/mt FOB Wednesday, falling US$40/mt since last Thursday. With freight to NWE pegged at US$60/mt, a spread of over US$300/mt may exist. So far, however, traders have not yet capitalized on the arbitrage.
"Supply in Europe is not tight at the moment and will align a little more with these levels," a trade source said. Expectations of a fall in feedstock propylene prices in September in conjunction with the devaluation of the yuan could push prices from the Middle East down further. A weaker yuan has made imports to China more expensive. Import prices have reacted by falling below domestic levels for the first time in six months Wednesday
21-Aug-15 
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