New Delhi: Since the second half of 2022, the Propylene market has been tangled down by lackluster and weak downstream margins. At the same time, the consistent fluctuation of feedstock has been observed amidst the uncertainties over the Crude Oil offers in the international market. In response, the bearish sentiments over Propylene are likely to prevail in the first quarter of 2023, as the demand from the downstream industries will stagger on higher levels.

In the European market, analysts pointed out several omissions for market competitiveness, even though the domestic offers for Propylene in the European markets have rebounded after dropping to the historic low below USD 500 per tonne by the end of the third quarter of 2022. Although, the curtailment of the run rates at the Propylene manufacturing sites due to higher energy prices has maintained a delicate balance in the regional market. The higher interest rates and inflation looming over the European markets levied a substantial impact on purchasing patterns. The pessimism is primarily focused on the Polypropylene (PP) industry, as the participation of overseas PP players has hindered the domestic supply-demand balance and an oversupply scenario constantly impacting the domestic market.     

The outlook for Propylene in the US will likely observe a substantial rebound in the first quarter of 2023, as the new PP facilities will improve the offtakes of Propylene, which are further coupled with increased overseas inquiries for Crude Oil even though the demand from the downstream PP industry is likely to cope with the fresh supplies from new facilities. Although, the participation of Asian PP players has soared the market price competitiveness. In addition, the disruptions occur due to the blizzard storm hindered the value chain and transportation in the domestic market.

As per the ChemAnalyst pricing intelligence, it has been anticipated that the Global Propylene market may observe considerable growth by the end of the first quarter of 2023. The Russian authorities are restricting the exports of Crude Oil to the G-7 and every nation that follows the USD 60 per barrel price cap. In response, the supply of Crude Oil is likely to curtail by a vast margin levying the impact across the value chain. In response, the discussions for Propylene may observe substantial gains by March 2023, although Propylene market players currently are highly cautious and closely monitoring the market shifts.