Higher polypropylene prices in Europe PP lead to a flood of import offers

The level of polypropylene (PP) prices in Europe, that are currently higher than any other region in the world, has led to a flood of import offers. Sellers from other regions attempt to take advantage of price levels unseen elsewhere globally, as per ICIS. Price of PP homo polymer from European producers have increased again in June rising to €1240/ton FD (free delivered) NWE, on persistently tight availability. Several large buyers complained that they were short of product, despite the fact that demand has not been particularly buoyant. A Middle Eastern producer’s netbacks into Europe are US$80/ton higher than into China. Homopolymer injection PP is being offered from the Middle East at €1100/ton CFR Antwerp, 3% duty applicable. Saudi PP is being bid at US$1390/ton CIF Barcelona. At current offer levels, and at current exchange rate, imported material is working out to be cheaper than domestic products. However, a lead time of four weeks could be significant if prices fall in the interim. European PP producers seem confident of their own position in July. A new propylene monomer contract price is on the cards, expected to dip from record high level set in May and rolled over into June of €1,000/tonne FD NEW. A very miniscule fall is expected as PP producers have spelt out that they intended to pocket any propylene advantage. Producers are confident of an upper hand on account of several production issues that have resulted in tight avails throughout Europe- Force majeure from SABIC at Geleen, Netherlands, and INEOS from Grangemouth, UK, were now cleared up, but new cases of legal restrictions had been applied by Total Petrochemicals from Feluy, Belgium, INEOS had declared a new case of force majeure from its join-venture Lavera, France, PP site.
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