Oversupply continues to characterize the European polypropylene (PP) market in January. Buyers have not seen major changes in terms of availability. Overall supply remains under pressure from low demand and trade.
While the lower prices have helped ease pressure from imports, the rise in the value of the Euro against the US dollar has countered some of this effect by eroding the competitiveness of domestic polypropylene.
While players saw positive signs in January, on balance pressure remains on supply.
Faced with an oversupplied market, suppliers have reduced operating rates in recent months. But so far this seems to have helped avoid a disaster rather than re-establish margins which on some accounts continued to fall.
Many buyers this month have been able to decrease prices more than the decrease in the value of the monomer contract.
The lower cost of gas, falling to around €57 per megawatt hour, is certainly helping to avoid additional squeezes on margins for producers.
However, despite some positive developments, ultimately lower spending on goods by consumers continues to place pressure on production across the entire value chain.
The market update is an exerpt fromt the monthly report.
The GC Intelligence™ Polypropylene (PP) Market Prices, Forecasts, and Analysis reports are published monthly. The reports contain historical, current, and forecast prices of Copolymer Homopolymer, and Post-Consumer Recycled (PCR) PP.
- PC Recycled PP