For the Quarter Ending December 2024
North America
During Q4 of 2024, polypropylene prices across the US market were reported to have fallen by approximately 8%. Throughout the entire quarter, the US polypropylene market continued to follow the pricing dynamics of feedstock propylene (Polymer Grade), which depreciated by around 20%. Weak demand from the construction and downstream automotive industries remained the primary driver of the market, despite disruptions caused by the hurricane season, which continued until November 2024.
A notable event was INEOS returning to production in late October 2024, which further improved supplies in the domestic market and exacerbated the already bearish market conditions. The US polypropylene market also faced price competition from the primary Middle Eastern and Chinese markets, which kept prices under downward pressure.
Mid-quarter disruptions due to strikes between ILWU (International Longshore and Warehouse Union) and USMX (United States Maritime Alliance) led to empty accumulation across port terminals, making export conditions less favorable as vessels remained backed up.
Towards the end of the quarter, US suppliers were primarily focused on liquidating inventories to avoid tax repercussions at the end of the year. Export conditions worsened again due to the potential of another strike. With inventory liquidation in full swing, some producers tried to lengthen the market by reducing run rates.
Europe
During Q4 of 2024, the European polypropylene market experienced a bearish trend, with prices falling by approximately 8%. Producers mostly returned to production after the summer break, which ended in October 2024. However, underlying demand conditions remained weak, primarily due to the sluggishness in the key construction and automotive industries.
A notable event during the quarter was the return of production at Total Energies' facilities in Gonfreville, France, and Feluy, Belgium, with polypropylene production capacities of 230,000 tonnes/year and 850,000 tonnes/year, respectively. This further supported the bearish trend. Total Energies had previously declared force majeure for polypropylene deliveries throughout Europe in January 2024 due to mechanical issues at Gonfreville, which compounded supply issues already triggered by force majeure at Feluy since July 2023. With these force majeures lifted, the European polypropylene market began to move toward price normalization.
Arbitrage opportunities within and outside of Europe remained mostly closed, which compounded the already oversupplied market. Additionally, during the middle of the quarter, a proliferation of lower-priced import offers was witnessed, mainly from South Korea, China, and the Middle East. This resulted in price competition for domestic producers. Producers attempted to address this issue by lowering run rates.
Towards the end of the quarter, destocking activities continued, with suppliers focusing on liquidating inventories. Trading activities across inland European regions were disrupted due to unfavorable weather conditions in the Northwest European ports, which were further compounded by maintenance works. By the end of the year, the overarching market fundamentals were largely shaped by producers trying to lengthen the market situation through reduced run rates, with the market being largely supported by ample supplies and limited outages.
Middle East
The Middle East polypropylene market experienced a predominantly bearish trend during Q4 of 2024. Price competition from the Chinese and South Korean markets remained strong, with suppliers aggressively shifting their inventories to prime European markets. Export conditions were further hindered by security tensions in the Red Sea, resulting in inventory accumulation in the region. Export conditions to the Turkish market were also unfavorable, with the historically weak lira discouraging Middle Eastern suppliers from engaging with Turkish traders, which contributed to the overall weakness in the polypropylene market.
Although healthy domestic consumption at the beginning of the quarter helped stabilize prices, the market shifted to a bearish outlook as the year ended, with suppliers liquidating inventories. With the arbitrage window to Europe closing, suppliers from the Middle East were reported to have redirected supplies to the Indian market.
However, at the close of the year, intensified price competition from Indian suppliers, who offered discounts on domestic material, put additional pressure on Middle Eastern suppliers, prompting them to divert their cargoes to other parts of the Indian subcontinent. This, in turn, maintained the bearish market conditions.
South America
The South American polypropylene market, particularly in Brazil, witnessed a predominantly bearish trend during Q4 of 2024, with prices depreciating by approximately 11%. The Brazilian polypropylene market faced continued price competition from suppliers in South Korea, China, and the US, which led to an influx of lower-priced offers from these regions. Chinese and South Korean suppliers were particularly dominant, as their offers remained attractive to Brazilian traders.
Throughout much of the quarter, China's increased polypropylene capacity allowed suppliers from the country to redirect more of their supplies to the South American market, gaining a significant share of Brazil's net imports in November 2024. South Korean suppliers also remained competitive, with duty-free exports to Brazil continuing until October 2024. In an attempt to mitigate this market situation, Braskem, the major Brazilian producer, raised its quotations twice during the quarter, but these efforts were largely unsuccessful in reversing the market trend.
By the end of the year, Brazilian suppliers began exploring alternative markets. Some were reported to have sourced inventories from Egypt, as imports from the region remained exempt from taxes, further improving the supply situation for Brazilian traders.
APAC
The APAC polypropylene market experienced a stable to bearish trend during Q4 of 2024, with prices declining by approximately 1%. The continued expansion of polypropylene capacities in China led to ongoing price competition across the Asian market, alongside aggressive volume pushing by South Korean suppliers. Despite lower PDH rates, the decline in shipments contributed to inventory accumulation across ports in the region.
Demand conditions remained muted, particularly in key sectors such as automotive and construction, which continued to underperform. Weather-related disruptions, such as typhoons in the South China Sea, had minimal significant impact on polypropylene production or supply.
As the year progressed, the liquidation of inventories became a dominant market trend, applying downward pressure on prices. This occurred despite some turnarounds and force majeures in the South Korean market. China, with a reported 88% rise in polypropylene exports in November 2024, continued to push supplies into the Asian market, mitigating fluctuations in intra-Asia freight charges. However, these factors failed to generate significant impacts on market dynamics, with ample supplies circulating across the region.
For the Quarter Ending September 2024
North America
The U.S. polypropylene market experienced a decline of approximately 6% by the end of Q3 2024, driven by excess supplies throughout the market. Domestic producers struggled to compete with lower-priced resin imports, particularly from the Asia-Pacific region. Reports indicated a lack of new offers for polypropylene, with demand remaining mild as end users maintained sufficient inventory.
Additionally, Formosa Plastics Group's new polypropylene unit, initially slated to start in July, has been postponed to late September or October. The situation was further complicated by INEOS declaring force majeure at a U.S. facility on July 23, 2024, affecting the production of polypropylene copolymer products and limiting supplies, which was accompanied by several other outages witnessed in the market. which helped prevent a sharper decline in prices. Although polypropylene exports saw a slight dip from June, they remained elevated, and domestic sales exceeded the 12-month average for the fourth consecutive month, driven by strong processor throughput and ongoing inventory buildup.
However, the market continued to face challenges from inexpensive imports from Asia, as China increased its polypropylene production capacity to enhance competitiveness in the global market. Despite these challenges, the U.S. polypropylene market faced outages, with inventories among U.S. suppliers dwindling as converters worked through existing stock. Spot prices for homopolymer dropped slightly, while copolymer prices fell by a few cents, decreasing their previously inflated premiums. While INEOS and INVISTA remained on force majeure, there were expectations of improved availability as offline reactors came back into production. Spot availability remained tight, particularly for copolymer, leading buyers to slow their purchasing or reduce order volumes in anticipation of lower prices.
Europe
In Q3 2024, the European polypropylene market saw significant price increases due to several factors. Supply constraints from plant shutdowns and maintenance limited product availability, intensifying demand for inventory restocking. Geopolitical tensions further tightened supplies, and European distributors struggled to secure bulk cargoes, often only acquiring 1 to 2 truckloads at a time. Import availability was scarce, as suppliers from East Asia and the Middle East refrained from offering material due to high freight costs and long lead times. This made imports less competitive, allowing local suppliers to raise prices. The feedstock propylene market also faced challenges, with prices rising about 6% in late July due to supply pressures and depleted stockpiles. Despite these increases, market participants remained cautious, with notable declines in propylene imports from key suppliers in Asia, North America, and the Middle East. Scheduled plant overhauls in August and September prompted sellers to seek higher prices, although increases were moderate in July. By mid-September, improved supply conditions emerged as maintenance turnarounds were completed. However, intense price competition from East Asian cargoes led to price depreciation, exemplified by SABIC offering discounts of up to USD 30/MT. In contrast, LyondellBasell maintained firm prices despite weak demand. Overall, many polyolefin producers announced price decreases ranging from EUR 60 to EUR 250 per ton, with MOL Petrochemicals citing a EUR 70 reduction for polypropylene. There were also rumours of Middle Eastern offers around EUR 100/MT. Compounding these challenges, Petroineos announced the closure of the Grangemouth refinery in the UK due to significant losses. In Germany, polypropylene prices increased by 2% for the quarter, ending at USD 1,277/MT for injection moulding FD Hamburg, reflecting a more stable market environment despite a 12% year-on-year decrease.
MEA
In Q3 2024, the Middle East and Africa region experienced a notable decline in polypropylene prices, driven by several key factors. The market faced challenges from the global freight industry, supply chain disruptions, and moderate demand from essential industries. These issues contributed to a 7% decrease in prices compared to the same quarter last year, reflecting a tough market environment. Despite strong domestic consumption, unfavourable export conditions due to security tensions in the Red Sea significantly impacted exports. Many suppliers in the Middle East were hesitant to engage with volatile markets in traditional export destinations like Turkey and North Africa, where economic conditions were unstable. Southeast Asia also saw no significant improvement, as seasonal monsoon conditions dampened demand. Following the monsoon season, demand remained below expectations, with most suppliers adopting a "wait and see" approach and avoiding the spot market to secure inventories. Price comparisons between the first and second halves of the quarter indicated a 1% decline, reinforcing the downward trend. By the end of the quarter, the price for polypropylene injection moulding FOB Al Jubail in Saudi Arabia was USD 933/MT, underscoring the negative pricing sentiment in the region. Overall, despite stable demand from certain industries, external challenges continued to hinder a positive pricing environment.
APAC
In Q3 2024, the APAC region saw a significant decline in polypropylene prices due to several factors. Oversupply conditions, driven by increased production capacities and maintenance turnarounds, put downward pressure on market prices. Additionally, weak demand from key industries, such as automotive and construction, further contributed to the negative market sentiment. Japan experienced the most notable price changes, with a 14% decrease compared to the same quarter last year, reflecting the broader declining trend in the region. Across Asia, over 4 million tonnes per year of new polypropylene capacity is set to come online between June and December 2024, with several manufacturing bases already expanding their capacities. Currently, more enterprises are resuming operations than undergoing maintenance, leading to an increase in supply that continues to impact international prices negatively. The quarter-on-quarter change of -2% and the -4% comparison between the first and second halves of the quarter underscored the ongoing bearish market conditions. By the end of the quarter, polypropylene homopolymer prices reached USD 930/MT FOB Tokyo, highlighting a stable to negative pricing environment in Japan.
South America
In Q3 2024, the polypropylene market in South America experienced a steady decline in prices, influenced by several key factors. Disruptions in global supply chains, including container shipping issues and high freight rates, significantly impacted market dynamics. A surge in imports and moderate demand from key industries further exacerbated the price drop. By mid-August, the Brazilian polypropylene market turned bearish, with prices decreasing by approximately 2% as arbitrage opportunities from China opened up. Recent changes by the Panama Canal Authority, allowing more vessels to transit, facilitated imports from Mainland China into Brazil. Additionally, some supplies arrived from the US as production facilities resumed operations. While polypropylene copolymer supplies remained moderate, homopolymer supplies were in excess, creating confusion among local suppliers and leading to a cautious "wait and see" approach. Production conditions were challenging due to maintenance turnarounds on feedstock propylene in the US and Asia. Chinese exports remained competitive with US exports and local inventories, prompting market players to hold off on bids in anticipation of further price declines. Despite Brazilian manufacturer Braskem raising prices for polypropylene grades for the fourth consecutive month by R$500 per metric ton, domestic products struggled to compete with imports. Supply conditions improved slightly, but uncertainties persisted, particularly with delays of up to 30 days for imports from Saudi Arabia. Additionally, Brazil's Chamber of Foreign Trade increased import taxes on polypropylene from 12.60% to 20%, likely leading to higher market prices. In Brazil, the most significant price changes were noted, reflecting broader regional trends. Prices decreased by 13% compared to the same quarter last year but remained relatively stable compared to the previous quarter, with a marginal change of 0%. However, there was a notable 4% drop when comparing the first and second halves of the quarter. By the end of the quarter, the price for polypropylene homopolymer CFR Santos in Brazil stood at USD 1,135/MT, marking the culmination of the downward pricing trend.
For the Quarter Ending June 2024
North America
In Q2 2024, the North American Polypropylene market experienced a notable surge in pricing, driven by supply and demand dynamics, global freight rate fluctuations, and rising feedstock costs. Unplanned plant shutdowns among major manufacturers exacerbated supply constraints, while a 1.5% increase in feedstock propylene prices elevated production costs, contributing to the bullish market sentiment.
Tight supply was compounded by a significant hike in global freight rates, particularly from Asia to North America, which saw increases upwards of 40%, leading to higher import costs and reinforcing upward pricing pressure. Robust demand from downstream industries, especially the automotive sector with substantial sales growth, also played a pivotal role in driving up Polypropylene prices.
In the USA, the most pronounced price changes were observed, with a gradual escalation trend fuelled by seasonal demand shifts, notably the summer surge in automotive manufacturing activities. Compared to Q2 of the previous year, there was a slight overall price decline of 1%, indicating residual impacts from prior market volatilities. However, a 1% increase from the previous quarter in 2024 underscored a recovery trajectory bolstered by heightened purchasing activity and export demand. The quarter concluded with Polypropylene Copolymer Grade DEL Houston priced at USD 1219/MT, reflecting a robust and positive pricing environment driven by constrained supply and vigorous demand dynamics.
APAC
In Q2 2024, the APAC region's Polypropylene (PP) market saw a 5% price increase quarter-on-quarter due to rising international crude oil prices, higher freight costs, and logistical challenges. Supply constraints were exacerbated by maintenance activities, plant shutdowns in key manufacturing countries, and geopolitical uncertainties. Robust demand from downstream industries, particularly construction and automotive, sustained market buoyancy despite seasonal fluctuations. In China, higher feedstock propylene prices and over 40 plant shutdowns in June 2024 further tightened supply. Increased freight rates also impacted PP prices. In Japan, significant price volatility was observed, with a persistent increase driven by elevated production costs, higher freight rates, and a seasonal demand spike from earthquake recovery efforts. This led to a 5% increase from the previous quarter, with the latest price for Polypropylene Homopolymer FOB Tokyo at USD 1008 per metric ton. Overall, Q2 2024 was characterized by a positive pricing environment for Polypropylene in the APAC region, driven by heightened production costs, logistical challenges, and robust demand from downstream industries.
Europe
In Q2 2024, the European Polypropylene (PP) market experienced a significant price decline due to a combination of macroeconomic factors and sector-specific issues. Lower feedstock Propylene and Crude Oil costs led to reduced production expenses and an oversupply, further suppressing prices. Subdued demand from key downstream industries, especially automotive and construction, exacerbated the bearish market sentiment. Reduced consumer spending, high financing costs, and seasonal slowdowns added to the challenges, resulting in surplus inventory and heightened competition among suppliers. The construction industry, particularly in Germany, saw a notable decrease in PP demand, with the Construction Index in contraction territory due to sharp declines in activity and new orders. High prices and financing costs further hindered customer demand. The manufacturing index showed an accelerated rate of contraction in new orders, highlighting ongoing struggles within the construction sector. Housing activity, commercial building projects, and civil engineering projects all experienced declines. The quarter ended with Polypropylene Injection Moulding priced at USD 1252/MT in Hamburg, reflecting the ongoing challenges and negative sentiment in the market, underscoring the need for adaptation to changing economic conditions and demand scenarios.
MEA
The second quarter of 2024 has witnessed a stable pricing environment for Polypropylene (PP) in the Middle East and Africa (MEA) region. This stability can be attributed to a balanced equilibrium between supply and demand, which mitigated significant price volatility. The consistent prices of upstream crude oil and feedstock propylene have profoundly influenced the stability in PP costs. Additionally, the absence of major disruptions in supply chains and steady operational costs have further supported this stable sentiment. These factors collectively underscore a neutral market landscape, devoid of extreme bullish or bearish trends. In the United Arab Emirates (UAE), where the most significant price changes were observed, the overall trends mirrored those of the broader region. The UAE market maintained a stable pricing trend throughout the quarter, reflecting minimal seasonal disruptions and consistent demand from downstream sectors such as automotive and construction. The year-over-year comparison reveals a 12% increase in PP prices from the same quarter in 2023, indicative of the gradual recovery and increased demand post-pandemic. Compared to the previous quarter in 2024, there was a 6% rise in PP prices, attributed to steady industrial activities and enhanced economic conditions. Interestingly, the price comparison between the first and second halves of the quarter remained unchanged further emphasizing the stability. The quarter concluded with PP Injection Moulding prices at USD 951/MT FOB Jebel Ali. This consistent pricing environment reflects a stable market sentiment, underpinned by balanced supply-demand dynamics and steady upstream cost structures. Overall, the PP market in the UAE during Q2 2024 demonstrated resilience, with stable and predictable pricing, signaling a neutral yet positive outlook for stakeholders.
South America
In Q2 2024, the South American Polypropylene (PP) market experienced a marginal 1% price increase due to material shortages caused by floods in Brazil, which disrupted supply chains. The Port of Porto Alegre reopened in June, but many ports and roads were only partially operational due to landslide damage. The Triunfo petrochemicals hub resumed operations in mid-May at reduced rates. Authorities offered favorable credit lines to aid recovery, but more support was needed. PP prices in Brazil rose by 0.5% in June due to higher feedstock Propylene prices in Saudi Arabia. Demand from the automobile industry was below average, and increased freight rates surged by over 40%, with the global container index rising by approximately 70%, impacting price trends. Import costs from the Middle East also rose by 0.5%. Global shipping disruptions, particularly in the Red Sea, affected container availability, prompting exporters to book shipments 3-4 weeks in advance. Operations at the Panama Canal improved, but congestion at major Asian ports and equipment shortages in China highlighted the need for adaptive strategies in Brazil's PP supply chain amid evolving global logistics dynamics.
For the Quarter Ending March 2024
North America
The first quarter of 2024 has been marked by a significant decrease in Polypropylene prices in the North America region. Several factors have influenced market prices during this period. These include cheaper imports from overseas, subdued demand from downstream industries such as automobiles and construction, and increased interest rates affecting consumer demand.
Additionally, the ongoing Red Sea crises have disrupted global trade, leading to constrained domestic supply and elevated freight rates. Within the North America region, Mexico has experienced the most significant price changes. The market has been stable overall, with a moderate level of demand from the downstream automobile industry. However, the price of Polypropylene in Mexico has seen a notable decrease of 22% compared to the previous quarter in 2024.
There has also been a 7% price decrease between the first and second half of the quarter. The latest quarter-ending price for Polypropylene Homopolymer Grade CFR Veracruz in Mexico is USD 1050/MT. Overall, the pricing environment for Polypropylene in the North America region during the first quarter of 2024 has been negative, with prices experiencing a significant decline. This is primarily due to factors such as cheaper imports, subdued demand, and disruptions in global trade.
APAC
In Q1 2024, the Polypropylene (PP) market in the APAC region exhibited moderate volatility, primarily influenced by fluctuations in raw material costs and geopolitical tensions. The price trends across the region were shaped by a complex interplay of factors, including rising feedstock propylene costs and changes in crude oil prices. Notably, countries like Japan, South Korea, and Singapore experienced incremental price increases, driven by costly imports and strategic hikes in propylene prices. These adjustments were further compounded by logistical challenges and disruptions in critical shipping routes, such as the Red Sea, which escalated freight and insurance costs, thus impacting the cost structure of PP. China's PP market displayed relative stability despite facing supply chain constraints due to multiple plant shutdowns and the ongoing geopolitical strife, which occasionally tightened supply but did not significantly disrupt market equilibrium. In contrast, India maintained a balance between demand and supply, which helped stabilize prices despite the broader regional trends of increased raw material costs. The overall market dynamics were also affected by seasonal demand variations and the strategic stockpiling of materials in anticipation of future price increases. This behaviour was particularly evident as traders and manufacturers navigated the uncertainties of international trade and raw material availability. The resultant pricing environment in the APAC PP market was characterized by careful adjustments, reflecting a responsive approach to both external market pressures and internal supply-demand alignments. This period highlighted the region's resilience and strategic market management in the face of evolving economic and geopolitical landscapes, setting a precedent for cautious optimism in the face of potential future volatilities.
Europe
In Q1 2024, the polypropylene (PP) market in Europe experienced various price fluctuations, primarily driven by a complex array of factors. Initially, the prices were influenced by disruptions in supply chains and geopolitical tensions that impacted the availability of raw materials, notably propylene. As these issues began to stabilize, the market saw some price adjustments reflecting a slow return to normalcy in logistics and production. However, the relief was short-lived as new environmental regulations introduced across the European Union led to increased production costs for manufacturers, pushing prices upward once again. Additionally, the ongoing energy crisis, spurred by fluctuating natural gas prices, continued to exert upward pressure on production costs. Demand patterns also played a crucial role, with fluctuations observed in key sectors such as automotive and consumer goods, which are significant consumers of PP. Towards the end of the quarter, prices showed signs of stabilization, thanks to improved supply chain efficiency and a slight easing of energy prices, coupled with manufacturers' efforts to adjust to new regulatory environments. This period highlighted the PP market's sensitivity to external economic and political factors, demonstrating how quickly prices can change in response to shifts in supply stability, regulatory changes, and broader economic conditions.
South America
In Q1 2024, the polypropylene (PP) market in South America exhibited dynamic pricing influenced by various factors. The quarter began with stable prices due to consistent import levels, primarily from the USA and Saudi Arabia, which helped maintain a balance in the supply-demand equation. However, the market soon faced volatility, partly due to fluctuations in global feedstock propylene prices and geopolitical developments, such as the resolution of the Red Sea crises which lowered freight costs and impacted import pricing. Furthermore, the reinstatement of antidumping duties on US PP by Brazil introduced additional costs, affecting regional price structures. Economic conditions within the region, including inflation and significant currency depreciation against the dollar, further complicated the pricing dynamics by increasing the cost of imports and affecting purchasing power. Demand patterns also fluctuated, with sectors like automotive and construction showing variable demand, which influenced polypropylene consumption and pricing. Additionally, global market conditions, including a temporary easing of supply chain disruptions, allowed for periods of reduced import prices, although this was not uniformly felt across all South American markets. Trading activities remained cautious towards the quarter's end, as businesses anticipated potential economic shifts and adjusted their strategies accordingly. The combined impact of international market dependencies, local economic policies, and broader economic uncertainties led to a complex and fluctuating pricing environment for polypropylene across South America in Q1 2024.
MEA
The first quarter of 2024 has been marked by increasing prices in the Polypropylene (PP) market in the MEA region. Several significant factors have influenced market prices during this period. The overall trend has been positive, with prices showing a consistent upward trajectory. This can be attributed to various reasons, such as supply disruptions, increased feedstock costs, and strong demand from downstream industries. In Saudi Arabia, the country that has seen the maximum price changes, the trend has been particularly pronounced. Prices have increased by 12% compared to the previous quarter, and by 4% compared to the same quarter last year. This indicates a significant upward movement in prices over time. The price change between the first and second half of the quarter has been recorded at 6%, further highlighting the increasing price trend in the market. The latest quarter-ending price for Polypropylene Injection Moulding FOB Al Jubail in Saudi Arabia stands at USD 948/MT. Overall, the pricing environment for Polypropylene in the MEA region during the first quarter of 2024 has been positive, with prices steadily increasing. This can be attributed to a combination of factors, including supply disruptions, rising feedstock costs, and strong demand. The market outlook for the coming months remains optimistic, with prices expected to continue their upward momentum.
