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PP PRICES CLIMB €200-250/MT IN FEBRUARY

February 4, 2021
The pandemic is causing significant distortions in both demand and supply.

Polypropylene (PP) prices climb €200-250/mt in February as the scarcity of feedstocks and good demand reduce supply.

Meanwhile, the increases mean spot prices of homopolymer injection moulding reached €1,300-1,400/mt, according to GC Intelligence assessments.

A combination of factors have lead to the current shortage of PP in Europe.

First, several producers reportedly had low availability, either because of turnarounds or unexpected issues.

Second, a plausible explanation is the lack of the feedstock propylene. Propylene is also a by-product of oil refining. With low demand for fuel during the pandemic, production of the key feedstock may have been impacted.

In fact, acrylonitrile (ACN) is also feeling the impact from supply issues of propylene.

Third, the ongoing shipping disruptions have resulted in long lead times and a reduction in PP imports.

And finally, demand across all market segments from packaging, appliances, and automotive remains very strong.

This strong demand can also be linked to the pandemic, since spending on goods has most likely increased as a result of a reduction in consumption of services.

This surge and sustained increase in demand during the second wave of the pandemic has been seen in all polymers.

Therefore, it is plausible to assume that the current environment of good demand, tight supply, and high prices will continue for most of H1 2021.

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