European polypropylene prices hit a new high - Wenzhou Mou'an Packaging Co., Ltd.

European polypropylene prices hit a new high

In the case of continuous interruption, immediate availability is still tight, prompting European PP manufacturers to further expand their profit margins. The initial offer in May showed a triple-digit increase. Earlier expectations were for a stable to slightly stronger trend.

There is no broader downward trend in Europe

Although there are reports of extension in a few cases, the initial quotation of PP for European origin mostly increases every month. This is because although the settlement price of propylene has increased by 10 euro / ton, the producer has raised the price to 100-150 euro / ton due to the lack of timely supply. One participant commented: “given the lack of raw materials, there is a reason for the price increase. In the setback caused by the virus, there is a regional shortage of polypropylene supply. We are not out of danger

Strong downstream orders are also seen as another reason for the sharp increase in demand. The euro zone’s seasonally adjusted PMI rose to an all-time high of 62.9 in April from 62.5 in March, supporting this view. The WOVEVN POLYPROPYLENE industry provides additional supports, increased liquidity after the blockade was relaxed, as one manufacturer said.

On the surface, the European PP market withstood the downward trend of major markets, marking a continuous rise of up to seven months. In neighboring Turkey, the price of imported PPH fell sharply due to the arrival of goods and light trading. India and Southeast Asia novel coronavirus pneumonia worries have brought pressure on the PP market, while the fast asleep period in the Middle East and North Africa also has pressure on demand in May.

Competitive imports enter Europe’s wide arbitrage window

Europe is by far the most attractive region, with prices hitting record highs supported by economic contraction. After the increase in May, the premium of European PPH and ppbc prices relative to other major markets further expanded.

The US dollar equivalent of spot PPH. The price in Italy is much higher than that in China (1270 US dollars per ton), Southeast Asia (1190 US dollars per ton), Egypt (575 US dollars per ton) and Turkey (920 US dollars per ton).

It is estimated that the spot price range of PP is stable within one week, 30-50 euro / ton higher, PPH is 1950-2150 euro / ton, ppbc FD Italy is 60 days, 2030-2200 euro / ton. In northwest Europe, the price of PPH increased by 50 euro / ton to 2000-2150 euro / ton, and the price of ppbc injection molding increased by 2050-2200 euro / ton. FD, 60 days.

As for imports, South Korea’s ppbc transaction price is 1570 euro / ton CIF, which will be delivered in late July for 60 days. It is reported that the quotation for delivery in July is 1550 euro / ton CIF. According to the talks, more imports will arrive in the Middle East and various Asian regions.

The future is not stable! Buyers need to be alert!

Although not everything is optimistic. Worryingly, under the shadow of the arrival of imports, the unstable outlook may affect purchasing sentiment.

Buyers like
pp woven fabric manufacturers are still reluctant to accept price increases, especially at the high end of the price range, and try not to buy from the spot market if possible. This is because they believe that suppliers may withdraw from the initial attempt to raise interest rates later this month due to the fierce competition in import prices and resistance to rising prices. At the same time, some buyers get almost high quality goods.

The bearish outlook for PP in major markets has dealt a heavy blow to the European market, which provides the highest net return for PP sellers. The sustainability of record high prices is just as difficult. After the spring maintenance closure, the regional factories are back online, and the imported goods arrive from late May to early June, which seems likely to reverse in June.

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