US Polypropylene Prices Rise Amid Production Challenges; Global Market Remains Stable

In the second week of July 2024, Polypropylene (PP) prices in the US market rose by approximately 3.2%, driven by a 3% increase in feedstock propylene prices, which elevated production costs and created a bullish trend. During this period, ChemAnalyst observed several significant plant shutdowns, including those by Braskem, INEOS, ExxonMobil Chemical, and Formosa Plastic USA. Despite these price gains, the rate of increase in ocean spot rates appeared to be slowing. Although demand remains strong, supply has increased, particularly on Transpacific routes, with seven new services added since May, potentially mitigating further rate hikes. Conversely, space on Asia-North Europe and Mediterranean routes remains tight, leading to continued rate increases due to port congestion and adverse weather. In South Asia, congestion has caused delays, backlogs, and equipment shortages, especially with 40ft containers. By week’s end, Polypropylene Copolymer Grade DEL Houston (USA) was around USD 1266/MT. Despite an initial spike, PP prices stabilized in the third week of July due to a balanced supply and demand. The price of feedstock Propylene Refinery Grade DEL US Gulf (USA) remained steady, supporting the stable price trend. Similarly, in Europe, PP prices remained stable due to a balanced supply-demand scenario, with no material shortages observed during the week.

In Asia, during the penultimate week of July 2024, Polypropylene (PP) prices remained stable, mirroring the global trend except in the US, were prices experienced fluctuations. This stability was supported by consistent feedstock propylene prices. In both Europe and Asia, PP prices held steady due to stable feedstock propylene prices and a balanced supply-demand scenario. In China, several significant plant shutdowns occurred, including those at Hebei Haiwei Group, Shandong Lihuayi, Shandong Chambroad Sinopoly New Material, Formosa Plastic Corporation - Unit 1, Sinopec-SK Wuhan Petrochemical – 1, Baofeng Energy, Sinopec Tianjin Lianhe, Sinopec Maoming Petrochemical NO.2 Unit, Shenhua Ningxia Coal Industry, Dongming Petrochemical, Sinopec Yanshan Petrochemical, Sinopec Yanshan PC, Xinjiang Shenhua Coal Chemical Co., Ltd., Zhongtian Hechuang, Sinopec SABIC Tianjin Petrochemical, Shenhua Ningmei, and Sinopec Qilu Petrochemical. Currently, there is no significant impact of these shutdowns on PP prices, but it may affect the price of PP in the coming months.

According to ChemAnalyst, the price of Polypropylene (PP) is expected to remain stable during the final week of July 2024 due to subdued regional buying activity. Currently, domestic PP market prices are showing minimal fluctuations and are experiencing a stalemate. While support for upstream raw materials is robust, demand for PP is at an off-season low. The balance between cost and demand has essentially neutralized short-term market dynamics. Future trends in supply and demand are projected to be stable with some potential increases, though significant changes in consumption patterns are unlikely. As a result, the PP market is anticipated to maintain a stagnant trajectory through the end of July.