After a steady firming trend witnessed almost throughout the entire summer, PP prices have been sustaining the firm trend in global markets as producers are announcing price hikes one after another for September, as per the pricing service of ChemOrbis.
This upward trend finds considerable support from the gains of the upstream propylene markets as three main regions, namely Asia, Europe and the US, have been firming up regularly for the last two months. When it comes to the supply-demand balance, players are not reporting major complaints about availability although there is market talk about limited supply in some areas.
Demand is not considered great in any of the regions as buyers do not want to purchase large amounts at the higher prices. However, it is not described as too bad either as several players in different regions report steady buying interest.
A trader in China said to ChemOrbis, “PP demand from the home appliance sector is picking up while demand from the woven sack sector is steady.” A converter in Indonesia also reported concluding deals in the import market, accepting to pay higher levels. “We are seeing good demand for our end products and are running our plant at full rates, but we are still struggling with our margins as we have not been able to pass our increased raw material costs onto our end product prices,” he commented.
Good demand is reported out of Vietnam as well. A trader commented, “Our sales performed quite well last week as converters started to replenish stocks before the public holiday on Monday.” A packaging manufacturer also stated, “Our end product demand is picking up when compared to last month. Hopefully it will improve further.”
In Turkey, some buyers are also expressing their intention to replenish stocks soon taking the firm sentiment into account, as per ChemOrbis. A sack manufacturer said, “We are now in search of prompt material while major suppliers have still not revealed their new offers in the PP market.” At least three more converters also commented, “As PP prices are expected to rise further, we are now looking for material before being caught by new hike targets.”
Hence, in the view of firm upstream costs and regular demand, players generally continue to hold bullish expectations for the near term in global PP markets.