Market and product
Europe November PP prices down on monomer fall
There are signs that the full €90/tonne monomer drop is not being transferred directly to the PP market by many suppliers.
“For the moment I have only managed to get minus €70/tonne [versus October],” said one buyer, “but I am hoping for more.”
“We are giving a maximum of €60/tonne,” said a producer, while others admitted they had relinquished a €70-75/tonne drop to the market.
This was not enough for many buyers, however, that had been following monomer and upstream movements very closely in the past months.
“I won’t be happy with only €70/tonne [down],” said one large buyer.
“I will be disappointed if I don’t get 90 [€/tonne down],” said another.
The supply/demand balance in the European PP market is fine. European demand has not been particularly strong, but September and October were stronger than expected, and export possibilities, supported by the strong dollar, have prevented any hint of oversupply.
Imports have also been reduced, because of the strong dollar, but also because traditional importers have been able to achieve better netbacks in other regions, particularly since the import duty on Gulf Cooperation Council (GCC) supply into Europe was increased from 3% to 6.5% in January of this year.
Traders have found it nigh-on impossible to secure product at workable prices, and even if they could buy now, imports would not arrive before the end of the year, leaving the field open for European producers.
Traders are also facing the usual end-year headache of converters sticking to their regular suppliers to be able to achieve volume rebates, and eschewing trader offers. On the other hand, traders have little availability, as imports have been hard to work, and producers are by and large sold out.
Homopolymer injection spot prices have fallen nevertheless, and while levels below €1,200/tonne FD (free delivered) NWE (northwest Europe) on a net basis were talked, prices were also talked in the mid-€1,200s/tonne FD NWE.
At the beginning of August they were at €1,320-1,350/tonne FD NWE. November pricing discussions are ongoing.
PP is used widely in packaging, the manufacture of household goods, and also in the automotive industry.
