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EU PP Prices Roll Over in July 2024


EU PP prices roll over. July 2024 has seen polypropylene (PP) prices rolling over, driven by weak demand and steady feedstock propylene costs, according to GC Intelligence market analysis.

The limited demand is posing challenges for producers attempting to increase their margins, which remain squeezed.

Producers have been grappling with demand issues for some time. There was a brief uptick following a rise in freight costs leading to uncompetitive imports. But this pressure was quickly absorbed by a market that continues to struggle.

With raw material prices hovering close to current market prices, producers find it increasingly difficult to improve margins.

The seasonal summer slowdown has exacerbated the situation, further reducing demand. Many companies will reduce operations during August, some for extended periods, due to lackluster activity.

The overall economic downturn compounds these seasonal challenges, leading to a continuous decrease in demand. This ongoing decline threatens suppliers’ ability to recover margins, with the risk of further margin losses looming.

While there have been isolated reports of price increases, these are not widespread and vary depending on the starting point of the assessment.

Looking ahead, August is unlikely to bring significant improvement. The current economic conditions and seasonal slowdowns suggest that September will also face a sluggish start, with the downward trend in activity in many markets expected to persist for some time.

STEFAN DOBOCZKY APPOINTED CEO OF BOREALIS
agreement

GC Intelligence (London) – July 2024 – Stefan Doboczky appointed CEO of Borealis. The Supervisory Board of Borealis announced the appointment of Stefan Doboczky as the new CEO, starting July 1, 2024.

Daniela Vlad, Chairwoman of Borealis and EVP Chemicals at OMV, highlighted Doboczky’s extensive track record and leadership in the chemical industry, spanning three decades. She welcomed him enthusiastically to his new role.

Doboczky thanked the Supervisory Board for their confidence and expressed eagerness to propel Borealis’ growth in the global polymers sector, focusing on innovation and sustainability.

He began his career in 1992 and ascended to executive and CEO roles in major chemical companies globally. Doboczky recently resigned from the OMV Supervisory Board due to this new appointment.

Doboczky earned a Ph.D. in Chemistry from the Technical University Vienna and an MBA from IMD Lausanne, qualifications that underscore his vast industry knowledge.

He is ready to lead Borealis into a new phase of strategic development and international market expansion, enhancing the company’s leading position in the chemical industry.

Borealis specializes in polypropylene (PP) and other polyolefins, providing innovative solutions for global markets in base chemicals and fertilizers.

ALPLA GROUP ACQUIRES HEINLEIN PLASTIK-TECHNIK
M&A

London (GC Intelligence) – June 2024 – Alpla Group Acquires Heinlein. In a strategic move to enhance its pharmaceutical sector offerings, ALPLA Group has acquired Heinlein Plastik-Technik GmbH. This acquisition is expected to significantly bolster ALPLApharma’s capabilities.

Heinlein Plastik-Technik, headquartered in Ansbach, Germany, specializes in closure and dosing systems for the medical industries. The acquisition aims to strengthen ALPLA’s position as a leader in plastic packaging solutions across various sectors.

According to ALPLA, this acquisition aligns with their commitment to technological innovation and global business expansion. Heinlein’s expertise is anticipated to expand ALPLA’s product portfolio in the pharma packaging market.

Post-acquisition, the Ansbach site will be developed into a technology center focusing on injection molding and automation technology.

The acquisition agreement was signed on June 12, 2024. Financial details of the transaction were not disclosed.

Heinlein Plastik-Technik GmbH: Polymer Products in Pharma Packaging

Heinlein Plastik-Technik GmbH offers a range of polymer-based products for the pharmaceutical and medical industries, utilizing polymers such as PET (Polyethylene Terephthalate), PE (Polyethylene), and PP (Polypropylene).

EU PP PRICES COULD SOON FIND SUPPORT FROM RISING FREIGHT COSTS
shipping containers

EU PP prices could soon find support. While June has seen continued pressure on European polypropylene (PP) prices due to low demand and decreasing monomer prices, this may change.

This pressure may soon ease as the competitiveness of imports wanes. The recent spike in freight costs, which have nearly doubled over the past month, is a key factor in this possible shift.

Due to these increased freight costs, some import prices have risen above domestic prices for certain copolymer grades. This is an unusual occurrence in the market.

If import prices continue to rise, domestic prices might increase for some buyers despite the current weak demand.

However, the consensus among market participants is that the rise in freight costs is linked to anticipated tariffs. These tariffs caused a surge in demand and a subsequent shortage of containers.

As these tariffs come into effect, the shortage is expected to diminish. This could potentially lead to a decrease in prices by July.

BOREALIS TO ESTABLISH RECYCLATE-BASED POLYOLEFINS LINE
Circular economy

Borealis to establish recyclate-based polyolefins line in Belgium. The new line will be installed in Beringen, Belgium, by 2024.

This state-of-the-art compounding line will utilize Borcycle™ M technology. It transforms recycled post-consumer waste into high-quality polypropylene and polyethylene.

As a semi-commercial demonstration, the line will showcase versatile recycling technology. This process supports various high-performance applications in multiple industries.

Additionally, the investment will expand Borealis’ overall recycling capacity. It provides valuable operational experience and technological insights for future expansions.

Lastly, this initiative complements Borealis’ recent acquisitions, demonstrating their commitment to a circular economy. This move underscores their sustainable development goals.