In June 2024, the Indian market for Polypropylene Glass Filled Compound (PPGFC) experienced a notable increase of 1.7%. This price hike was primarily driven by elevated production costs, a consequence of the rising prices of feedstock polypropylene (PP). The cost of PP increased by approximately 1.2% on a monthly basis, which significantly impacted the overall production expenses for PPGFC. Additionally, there was a surge in demand from the downstream automobile industry, which saw a positive growth of 3.63% in June 2024, further bolstering the PPGFC price trend.

The increase in freight rates across the Asian region also played a critical role in influencing PPGFC prices. Freight costs skyrocketed by more than 40% during June alone, while the global container index surged by approximately 70% this month. These soaring logistics costs added further pressure on the PPGFC market, contributing to the overall price increase.

This month, the PPGFC supply in the country reported a decline due to the increased cost of feedstock PP, which rose by approximately 1.2% on a monthly basis, thereby elevating production costs of PPGFC. India's export-import trade has been significantly affected by soaring freight rates, increasing congestion at transshipment ports, and a shortage of empty containers. Global port congestion has reached an 18-month high, with long lines of ships awaiting berths at transshipment ports, hindering timely deliveries. Prominent market players, indulge in trade activities, noted that the freight rate increase has severely affected imports and exports, particularly during the May to August peak season for meeting Christmas demand in the US. The Kochi-Houston rate has surged from $2,400 to $7,600. Despite receiving good export orders, the soaring freight rates and container shortages present significant challenges for PPGFC. Additionally, the doubling of raw material costs compounds these difficulties.

The last week of June saw further gains in sea freight spot rates from Asia to Europe and North America, driven by a series of peak season surcharges (PSS) and new Freight All Kinds (FAK) levels effective from July 1, leading to double-digit increases in spot freight rates. This combination of rising raw material costs, increased freight rates, and logistical challenges has created a complex and challenging environment for the PPGFC market in India, affecting both supply and pricing dynamics.

According to ChemAnalyst, the price of PPGFC is expected to decrease in July. This anticipated decline is attributed to the forecasted rainfall by the Indian Meteorological Department (IMD), which may impact the demand for PPGFC from the end-use construction and automobile industries, potentially leading to a bearish market trend.