Polypropylene prices fall for fourth consecutive month in Europe

04-Feb-15

The downward trend across the European PP markets is seen extending into February as initial prices are emerging lower for a fourth consecutive month after the propylene contracts settled down €80/ton from January, as per ChemOrbis. However, decreases have lost speed following the three-digit drops recorded last month. The overall PP ranges in Italy dropped by €80/ton on the high ends this week after a distributor conceded to the entire propylene drop on his February cargoes in order to match the market levels. The seller did not exclude the possibility of issuing further discounts later in the month depending on his sales volumes. A converter reported receiving initial February offers from his regular West European supplier with decreases of €50-60/ton from last month. The buyer commented, “We are planning to wait for now as we are targeting to obtain further discounts of €20-40/ton in the days ahead. Meanwhile, sellers are not aggressively giving offers for now.” Another buyer received initial February PP offers with decreases between €40-60/ton from different European suppliers and said that he has already ordered some volumes without fixing the final price. Following these initial February reductions, spot PP prices have hit a 5 year low in Italy. In West Europe, initial spot PP prices are being reported with decreases of €50-70/ton while a distributor in Germany reported lowering his new February prices by €80/ton in line with the propylene contract drop. Most sellers expect the latest discounts to entice demand as buyers were keeping low stocks due to their bearish expectations. Another German distributor, who reduced his PP prices by €60-70/ton for February, reported, “We have already received new orders from buyers and we expect to see better demand this month. Meanwhile, our availability is not ample for copolymers.” A packaging producer expressed his February PP buy ideas with decreases matching the propylene drop of €80/ton as per ChemOrbis pricing service. The buyer expects export demand for his end products to slow down due to the Chinese New Year holidays. Another buyer in France received initial February offers for West European PP with decreases of €50-60/ton from last month.