European BOPP Film Prices Surge as Feedstock Costs Rise in Early 2024

The Europe market for Biaxially Oriented Polypropylene (BOPP) has witnessed a notable uptick in prices since the commencement of 2024, with multiple factors contributing to this upward trend. One of the key drivers behind this surge is the high-cost pressure stemming from the primary feedstock, Polypropylene by 1% during the third week of January. These elevated costs have subsequently exerted upward pressure on the overall pricing of BOPP. Another significant factor contributing to the rise in BOPP prices is the strategic restocking undertaken by industry players. Following a period of depleting existing material stocks, manufacturers and businesses across the supply chain have initiated restocking efforts. This surge in demand for BOPP as a replenishment strategy has further propelled the prices upward.

Moreover, the surge in upstream crude oil prices, experiencing a 0.8% week-over-week increase, can be attributed to supply disruptions in shipping routes. This rise in crude oil prices has had a cascading effect on oil derivative products, including Polypropylene, leading to higher manufacturing costs. The ongoing Red Sea conflict has played a persistent role in this scenario, causing substantial disruptions in a critical shipping route through the Suez Canal. The continuous attacks in the Red Sea conflict have resulted in significant delays and increased operational expenses associated with shipping. These disruptions in the supply chain and heightened expenses have further impacted the cost structure of Polypropylene, a key component in BOPP production. In light of these factors, the European market has seen an upward trajectory in BOPP prices during this specific time frame.

In terms of demand, BOPP in the European market sustained a moderate level of demand from the downstream Fast-Moving Consumer Goods (FMCG) packaging industries. According to market participants, there has been a slight rise in consumer confidence in some European countries as of January 2024, reflecting notable gains. This upward trend in consumer confidence is seen as an optimistic signal, suggesting that the BOPP market is poised for expansion in the upcoming weeks. The correlation between consumer confidence and the demand for BOPP, particularly in the FMCG packaging sector, indicates a potential increase in the consumption of packaged goods. As consumer confidence strengthens, it often leads to an uptick in purchasing behaviour, subsequently driving demand for packaging materials such as BOPP.  After a prolonged bearish pattern this positive shift in consumer sentiment is expected to contribute to the growth and expansion of the BOPP market in the European region in the near future.