Consistency in the Demand-Supply Gap is leading Polypropylene Prices to Sustain Stability

After a sluggish prior holiday-shortened week, Polypropylene activity picked up again, and the prices of both Homopolymer (HoPP) and Copolymer (CoPP) concluded this week unchanged. Prime Polypropylene railcars were once again available at deeply discounted prices, some for export and others for domestic shipping, but the majority of the proposals had been accepted by the end of the week. We will see if the buying sentiments hold up after some suppliers asserted that most of their December spot prime offers for Polypropylene were completed. Demand increased a little bit, processors replenished some inventory, and some resellers were seen buying some products like Polypropylene at these advantageous prices. Throughout the week, there was a steady demand; around half of the volume was split between Prime HoPP & CoPP truckloads and Prime railcars. There has been a conspicuous paucity of positive downgrades due to the upcoming festive season. High-flow off-grade CoPP railcars have been noticeably scarce, and we have underlying demand if more material becomes available.

While packaged CoPP remained difficult to find and came with a hefty premium, ready-to-ship HoPP truckloads, both prime and off-grade, were readily available. Polypropylene contracts have decreased during December 2022, whereas upstream Polymer Grade Propylene (PGP) contracts have increased by a penny at the end of the year. The increase in upstream PGP prices was the first price hike of the commodity in the US market since August. The Energy costs in the US market reduced during December as natural gas prices eased due to warmer winter conditions compared to previous years and abetted the stable conditions of Polypropylene.

According to ChemAnalyst, the prices of Polypropylene remained stable in the US market during the start of December 2022. The downstream petrochemical industries were likely to remain weak till the end of the month owing to the holiday season weakening buying sentiments. Despite the poor run of the downstream industries, the rising cost of upstream PGP is stabilizing the price trend of Polypropylene in the US.