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Propylene prices are falling: no turnaround in sight in October!
Polypropylene inventory depletion leads to discounts in September, while the price of propylene continues to fall. The future remains uncertain.
Propylene prices are falling: no turnaround in sight in October!
Polypropylene (PP) prices are under pressure – and for several surprising reasons! In September, the picture for price developments was anything but clear: there were hopes of increasing demand, while at the same time supply in Europe was reduced to a minimum. But then the turning point came! Numerous force majeures were lifted, hopes of a surge in demand were dashed and processors began to reduce their inventories. The consequence? Significant discounts in prices while demand fell short of expectations!
The pricing drama continues! A further decline in demand is now forecast for October. Propylene was revised downwards by an additional 35 EUR/t! In Europe, production facilities are running again, but not completely and often only with throttling. This means: Old game – supply still exceeds demand and puts further pressure on PP prices. The first providers are already offering tempting special conditions to get rid of their goods.
Annual negotiations are coming up!
But that's not all! The annual negotiations are just around the corner and that could reduce the relevance of contracts even further. There is already speculation that the remaining quantities will be concentrated among fewer and fewer providers. Goal? Annual bonuses can be achieved reliably! According to the industry magazine Kunststoff Information (KI, Bad Homburg), this is a drastic turnaround in the market that is making players nervous.
So things are getting exciting in the market as players try to reposition themselves. Future developments remain uncertain: who will hold their nerve as prices fall and inventories shrink? One thing is certain: the drama will continue in the polypropylene market!