Polypropylene (PP) Price Trend and Forecast

Regional Market Overview

Get comprehensive insights into the Polypropylene market, with a focused analysis of the Polypropylene price trend across Asia, Europe, North America, Latin America, and the Middle East & Africa.

Polypropylene (PP) Price Trend for the Q1 of 2024

Asia

During the said period of the year 2024, polypropylene observed a very compact price trajectory as the prices mostly remained consolidated within narrow limits. A packed inventory guided the price graph downwards in the region. Government initiatives to limit and eradicate excessive plastic usage also pushed the consumption levels downwards.

Polypropylene (PP) Price Chart

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In the Chinese market, after averaging at around 1060 USD/MT (spot, Injection Moulding) in January, PP prices fell to approx. 1046 USD/MT (spot, Injection Moulding) in March’24. Similarly, in the Indian polypropylene market varying within confined boundaries, the prices went from approx. 1303 USD/MT (EXW BOPP) to about 1307 USD/MT (EXW BOPP). The regional price trend was subjected to occasional upward as well as downward movements as various factors affected the price trajectory.

Europe

The rising political and military tensions in the region continued to disturb the overall trading dynamics. Ukraine launched drone attacks on Russian oil refineries, which caused partial operational shutdowns. Consequently, the oil output from the OPEC+ nation tumbled by around 7%, which in turn raised the petrochemical prices in the global markets.

As a result of these tribulations in the European markets, polypropylene prices saw a steady rise despite humble downstream demands during this period. In the European market, the polypropylene prices went from about 1313 USD/MT (EXW, Injection Moulding) to about 1362 USD/MT (EXW, injection Moulding) from January to March of 2024. This inflicted an approximate 3% incline in the PP price trajectory. Overall, positive market sentiments were experienced.

North America

The North American market behaviour for polypropylene was not much different from its European counterpart. The various geopolitical disturbances around the world hurdled the industries in the American markets as well. Majorly, the rising armed conflict between Israel and Hamas complicated the trade situation in the US market.

Along with the rising Houthi pirate threats in the Red Sea, it implicated the freight disturbances for global trade. The monthly average prices (EXW, Injection Moulding) for polypropylene went from about 1388 USD/MT in January’24 to around 1438 USD/MT in March of 2024. This caused a nearly 3% appreciation in the regional PP market.

Analyst insight

According to Procurement Resource, given the current state of geopolitical tribulations, the trade situations are likely to crumble even more going forward. A Polypropylene supply crunch is anticipated in the coming months.

Polypropylene (PP) Price Index for the Q4 of 2023

Commodity	Sector	Region	Price	Time Period
Polypropylene (PP)	Packaging	USA	1410 USD/MT	December-23
Polypropylene (PP)	Packaging	USA	1355 USD/MT	October’23
Polypropylene (PP)	Packaging	Europe	1270 USD/MT	December-23
Polypropylene (PP)	Packaging	Europe	1308 USD/MT	October’23
Polypropylene (PP)	Packaging	India	1230 USD/MT	December-23
Polypropylene (PP)	Packaging	India	1334 USD/MT	October’23
Polypropylene (PP)	Packaging	China	1067 USD/MT	December-23
Polypropylene (PP)	Packaging	China	1075 USD/MT	October’23

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Polypropylene (PP) Price Trend for the October - December of 2023

Asia

The Asian polypropylene market witnessed a consistent downfall during the fourth quarter of the year 2023. The fluctuations in the feedstock propylene prices were reflected in the wavering of the polypropylene price trends. In the Chinese market, the monthly average spot prices of polypropylene (Injection Moulding) went from about 1075 USD/MT to around 1067 USD/MT in December’23.

Similarly, in the Indian polypropylene market, the monthly average prices fell from about 1334 USD/MT (EXW BOPP) in October to around 1230 USD/MT in December’23. With this, the Indian domestic polypropylene market registered a downfall of about 7% within the discussed quarter. These market trends were a direct reflection of the plunging polypropylene demands from the downstream packaging and plastics industries. Overall, dull market trends were witnessed.

Europe

Influenced by the Asian polypropylene market, the European market also experienced swift downward trends during the said quarter of the year 2023. The monthly average prices went from about 1308 USD/MT(EXW, Injection Moulding) in October’23 to around 1270 USD/MT in December’23, registering an overall decline of about 2% in the domestic polypropylene markets.

North America

Contrary to the global trends, polypropylene prices saw some slight inclinations in the price trends in the North American market. The supply issues caused by the freight curtailments and supply chain issues caused by the Israel-Hamas war influenced this surge in polypropylene prices. The monthly average prices went from about 1355 USD/MT in October to around 1410 USD/MT in December’23. This caused a borderline depreciation of around 4% in the American polypropylene market.

Analyst Insight

According to Procurement Resource, the polypropylene prices are expected to waver within confined limits in the forthcoming quarters. The supply and demand dynamics are projecting marginal stability in the polypropylene market trends.

Polypropylene (PP) Price Trend for the July-September of 2023

Asia

The polypropylene market in Asia, particularly China, saw mild improvements in the given quarter of the year 2023. Driven by the gradually rising demands from the downstream packaging and plastics industries, the polypropylene (PP) price graph witnessed a soft upward inclination for the entire period of Q3’23. In the Chinese domestic market, polypropylene prices rose by about 4% as the monthly average spot prices shifted from about 1009 USD/MT in July’23 to around 1055 USD/MT in September of 2023.

Similarly, in the Indian polypropylene market, the prices rose sharply in the first month and then declined marginally in the last month of the quarter. However, an overall quarterly inclination of about 3% was witnessed. The average monthly prices rose from about 1175 USD/MT (EXW, BOPP) in July’23 to around 1220 USD/MT in September’23. Overall, positive market sentiments were witnessed throughout the said period.

Europe

The European polypropylene market mostly remained wavering at the lower end of the price curve. Even though a slight increase of about 1% was seen from July to August, the prices again retracted owing to the feeble demand situation in the region. An overall quarterly depreciation of around 2% was seen at the end of the quarter as the monthly average prices went from around 1350 USD/MT (EXW) in July to about 1315 USD/MT in September of 2023. The general market outlook was mostly stable throughout.

North America

The gloomy economy kept the polypropylene prices at the lower end throughout the concerned period. Though gradually, but consistently the polypropylene market kept moving downhill. The monthly average prices in the USA went from approx. 1410 USD/MT (EXW) in July to about 1320 USD/MT on September 23, registering an overall quarterly decline of about 6%. Overall, muted market sentiments were observed.

Analyst Insight

According to Procurement Resource, a very mixed market outlook is being projected by the Polypropylene price analysis for the coming months. The polypropylene prices will vary in different regions as per the economic situations and general market dynamics.

Polypropylene Price Trend for the First Half of 2023

Asia Pacific

In the first quarter of 2023 the prices or polypropylene fluctuated as the Asian market struggled with uncertain market conditions. The price trend of polypropylene was affected by the weak demand due to holiday season in China. In the latter half of the quarter and in the second quarter, the prices rose because of the gain in the momentum of manufacturing activities after the holidays.

This trend was, however, short lived as the level of inventories rose significantly and the traders were forced to sell their produce at compromised rates and as a result the price of polypropylene fell from approximately 7250 yuan/ton in January to 7030 yuan/ton in June’23 in China region.

Europe

The polypropylene prices showcased a fluctuating trend in the first two quarters of 2023. The prices were majorly influenced by the declining demand from the downstream industries and strong supply leading to the rise in inventory levels. But in the end-months of the second quarter the prices followed an upward trajectory as the number of orders and overall market conditions of the region improved.

North America

The prices of polypropylene followed a northward trajectory in the first two quarters of 2023. The rise in prices was supported by the stable demand from packaging and textile sector along with rising support from polymer sector and high crude oil prices. The supply in the region remained constrained as traders struggled to fulfill the rising demand which further led to the inclination in the prices of polypropylene.

Analyst Insight

According to Procurement Resource, the prices of Polypropylene is estimated to increase in the upcoming months. The demand from the ed-sector idustries and strong global economic sentiments are expected to drive the price trend of polypropylene.

Polypropylene Price Trend for the Second Half of 2022

Asia

The Asian market showcased a steep decline in the price of polypropylene. This huge dip is attributed to the rise in inventories in the regional market and sluggish demand from major importing nations. The dip in export rates to other nations further led to the decline in the prices predominantly seen in the markets of Japan, South Korea, and Singapore in the third quarter.

The fourth quarter also was not so favourable, and the prices remained on the negative side as the demand continued to remain low. Declining economic conditions and fluctuating demand from the end-user industries contributed majorly to the drop in prices for the fourth quarter.

Europe

The European market struggled throughout the third quarter to keep the prices afloat as the resources remained scarce and the rate of feedstock materials skyrocketed. The ban on Russian supplies further worsened the situation as the demand from the end-user industries also declined.  The initial months of the fourth quarter saw a similar trend, but the last months saw an incline in the prices, especially in the German market. The rise in energy production and operation costs led to a major incline in the prices and overall, the fourth quarter proved to be good for polypropylene.

North America

The US market in the third quarter saw a surge in the supply of polypropylene while the demand from the market remained bearish. The decline in demand forced the manufacturers to lower their operations. The fourth quarter also mirrored the trend seen in the third. Induced efforts from the manufacturers did not yield profitable results.

Analyst Insight

The prices of Polypropylene are likely to decrease during the coming month given a decline in demand from the end-user industries and the rise in inventories and operational and production costs of the material.

For the Second Quarter of 2022

Asia

The price trend of polypropylene weakened during the said quarter in the Chinese domestic arena. The falling prices of feedstock propylene amid the light trading atmosphere caused the stockpiling of inventories. The manufacturers sold the product at a discounted rate to vacate the inventories for new production. Hence, the spot price dipped, further decreasing the buyer’s confidence in the market. The cost of polypropylene averaged 7838 RMB/MT during the said period.

Europe

The heightened prices of feedstock propylene, along with the high demands from the automotive and semiconductor industries, caused the price trend of polypropylene to inflate across Europe. The cost of feedstock propylene averaged 929.5 USD/MT CIF Northwest Europe.

North America

Polypropylene prices remained firm during the second quarter in the US domestic market. The harmonious market dynamics caused the prices to rise, averaging 1208 USD/MT.

For the First Quarter of 2022

Middle East & Africa

Higher energy costs resulting from the Ukrainian/Russian conflict, as well as the possibility of declining supply in an already oversupplied market, are driving resin suppliers in Africa to demand price rises. Despite price rises in most PP and PE grades in March, underlying demand remained poor across the markets.

New offers in Nigeria climbed by 10-80 USD/MT in March owing to growing cost pressure. Despite the fact that Nigerian players continued to report supply delays, overall market availability was adequate, balanced by current demand conditions.

North America

A supply overhang is anticipated in the US polypropylene (PP) market in 2022 as a result of an increase in imports, a decrease in demand, difficult export logistics, and improved output.

For the Fourth Quarter of 2021

Asia

After a good start in October, the North-East Asian polypropylene market suffered a decline in demand during Q4 of FY21. Spot prices struck a turning point in the first week of November and have since begun to decrease. Between Q3 and Q4, the average price of raffia, injection, and random copolymer decreased by 3%.

Imports into China had dwindled at the tail end of Q4 as the Chinese government implemented severe COVID controls, jamming major container terminals such as Ningbo. Although production and supply had been constrained in the new year, polypropylene prices were likely to fall towards the end of January in advance of the lunar new year vacations. However, the long-term picture for Q1 FY22 appears optimistic.

Indian polypropylene prices followed a similar trend to those in Asia, reaching an inflection point in the second week of November. The downward trend in spot prices remained until the end of Q4 and is likely to continue into Q1 of FY22, as continuing congestion at major ports in Northeast Asia implies that total demand may continue to decline, forcing surplus output to be channelled into the domestic market. By the mid-to-third week of November FY21, import prices for Raffia MFI3 from the Middle East had also lowered.

Europe

In Q4 of FY21, the European market posted marginal increases over the previous quarter, as the average price for PP copolymer grew by 2% on an FD Hamburg basis. The propylene to polypropylene pricing differential worsened in Q4 due to a greater arbitrage margin for imports from the Middle East against regional suppliers, resulting in a propylene excess in the European market.

The increase in energy costs beginning in the first week of December had little effect on polymer prices, as demand fell ahead of the European holiday season, offsetting any upward pressure on pricing.

The forecast for Q1 FY22 remains uncertain, as volatility in the polymer market was unusually high in the new year, owing to the advent of a new pandemic that disrupted global supply chains, disrupting market signals. Domestic demand is likely to be the primary driver of growth in the coming quarter, while international demand is expected to revive by the end of February ‘22.

North America

The market in North America experienced a decline in total demand in the third quarter of FY21, compared to Q3 of FY21. By the closing weeks of December, the propylene to polypropylene spread had narrowed dramatically, erasing any meaningful gain in margins collected by manufacturers and distributors during the months of September and October as a result of historically high freight rates during that period.

The second half of Q4 showed a fall in polymer demand, which is a common occurrence leading up to the holiday season. Polypropylene prices are projected to rebound during the early to mid-February period, when North America and Europe normally experience value chain disruption owing to rising energy prices and the Texas cold wave.

Latin America

The Brazilian government voted in November 2021 to lower import duties on polyethylene and polypropylene to 12.6% from 14%, effective from November 11 through December 2022. This was a precautionary approach to give the covid-infested business a head start. As a result, polypropylene prices in the Brazilian markets have dropped.

For First, Second and Third Quarters of 2021

Asia

During the first quarter of 2021, the northeast Asian region's supply remained balanced. Four new facilities in China and the restart of major important plants in South Korea increased regional supplies. However, the southeast Asian region faced supply constraints due to a lack of foreign imports. In India, demand increased due to increased consumption in the downstream market for surgical mask manufacturing, followed by persistent demand for BOPP films in the packaging sector.

The upward trend was accelerated further by high crude oil prices, which exceeded USD 60 per barrel in March. In the Indian market, the CFR price of Raffia grade averaged roughly 1633 USD/MT in Q1. The introduction of additional COVID-19 variations in numerous parts of Asia, on the other hand, reinforced the downstream converters' concerns.

Supply in the Asia Pacific region increased significantly during the second quarter of 2021, with the industry reporting regular operations and increased pressure on the major feedstock propylene due to China's rising commodity inflation rate. May Day holidays and a power constraint in Guangdong province, South China, further constrained market supplies.

India's deadly COVID second wave had a catastrophic effect on industrial and commercial activities for the majority of Q2, prompting the country to announce a much-needed relief in its PP resin offerings. The resurgence of COVID infections and weaker offtake from southeast Asian markets dampened demand prospects, causing ripples in polypropylene prices across Asia Pacific. In June, the FOB Qingdao pricing negotiation for PP raffia grade was resolved at 1263 USD/MT.

In Q3 2021, the forecast for the polypropylene market was positive, owing to strong demand and limited supply in the Asia Pacific area. Consistent increases in the price were accompanied by a surge in the price of a critical feedstock, propylene.

Additionally, unexpected plant outages in the region contributed to the product's scarcity, which supported the pricing trend. In India, PP fundamentals gained traction because of a global supply shortfall caused by constrained availability of the upstream propylene. In September, ex-Silvassa polypropylene prices ended at 1555 USD/MT.

Europe

PP supplies remained constrained in the first quarter of 2021, as a result of the tight availability of feedstock propylene caused by the ongoing pandemic and lockdown limitations whereas robust demand for PP in the downstream packaging and automotive industries boosted demand in the European region. The combination of limited supply and increased demand resulted in a triple-digit increase in polypropylene prices in Europe.

At the start of Q2, the European market was experiencing a severe polymer shortage, affecting countless small and medium-sized enterprises (SME) and almost 90% of European converters. As a result, PP supplies remained rather scarce during the second quarter of 2021. Although the import situation improved from the US, the fewer and more expensive import cargoes were insufficient to meet domestic demand. Numerous buyers turned to Chinese vendors to plug supply shortfalls. For July delivery, the price of raffia grades concluded at 1914 USD/MT.

During the third quarter of 2021, the Polypropylene market in Europe saw a decreasing trend, owing to the product's abundant supply in the face of diminished demand. In the European region, increased import rates and increased production rates resulted in ample supplies of PP, which resulted in a reduction in its pricing.

Additionally, by the third quarter, as a result of the region's energy crisis, numerous downstream manufacturers were forced to lower operating rates, resulting in slowed market activity. Thus, polypropylene prices fell to 2270 USD/MT from 2492 USD/MT in the July-September period.

North America

In the first quarter of 2021, PP supply became constrained as numerous US producers squeezed margins for downstream converters as a result of increased demand and limited stock availability across the area. Freezing temperatures forced the shutdown of numerous petrochemical and polymer manufacturing plants, including those of multinational conglomerates such as LyondellBasell and INEOS olefins & polymers.

Due to the prolonged shortfall, polypropylene prices more than doubled in February, pushing some customers to seek imports from Asian markets. Between January and March, rates of PP Injection Moulding grade increased by approximately 40%. In the final week of March, the FOB Louisiana (USA) PP IM grade price exceeded 2400 USD/MT.

During the second quarter of 2021, the industrial infrastructure recovered from the devastation caused by winter storm Uri, and all production units resumed operations at increased rates. As a result of the ripple effect, PP supply in the North American market increased significantly in comparison to the previous quarter, but some tightness was observed in April.

Numerous US polymer producers announced price increases in response to persistent raw material scarcity. In May, Formosa Plastics increased the price of PP resin in all grades by USD 110 per tonne. Demand was boosted by a recovery in the manufacturing sector and an increase in the demand for consumer durable goods. In June, the FOB Texas price for Polypropylene Homopolymer injection moulding grade was agreed upon at 2995 USD/MT.

A spike in polypropylene prices was noticed during the third quarter of 2021, owing to constrained upstream propylene availability. Propylene supply remained scarce in the US market, as numerous manufacturers were forced to shut down production facilities as a result of the Ida hurricane that ravaged the Gulf Coast in August.

Latin America

In January 2021, the polymer faced the most substantial price increases, because of tight supply, with prices rising on average by 63pc year on year in December in Brazilian reals. Supply tightness in Brazilian resin markets had pushed prices to unprecedented levels. The higher prices were also the result of increased demand for plastics for use in food packaging for take-out and delivery during pandemic-related lockdowns.

The prices were expected to continue for the next five months. However, this trend discontinued when the government of Brazil took a swift decision to temporarily end import duty imposed on PP for 3 months. The government capped the imports of PP homopolymer at 77,000 MT for 3 months.

For the Year 2020

Asia

Asian Polypropylene's (PP) third-quarter results were muted, despite the economy's steady recovery in the third quarter. Fears of a second Covid-19 wave prolonged semi-lockdowns in various countries in southeast Asia and India, impeding the recovery in demand for completed plastic products. Polymer prices remained subdued in mid-August due to weak fundamentals but recovered in the first week of September as supply tightened due to reduced US-origin PP supplies to Asia, bolstered by healthy demand in China.

Europe

Demand for PP appeared to grow in Q3 2020, with demand steadily improving in Europe towards the end of the year, becoming significantly stronger than in Asia. The market outlook was further bolstered by resilient demand from the automotive and medical sectors. Total declaration of force majeure on the PP plant in early August had a little adverse effect on the market, since other producers reported lower stockpiles and buying activity appeared to be returning to pre-pandemic levels in the coming quarter.

North America

North America remained deafeningly silent in terms of major moves, while several US manufacturers stayed closed and production losses worsened. Lyondell Basell and INEOS, two key players, declared force majeure on PP production throughout the quarter, opting for precautionary shutdowns ahead of storm Laura, limiting the product's global availability. Polypropylene prices increased significantly throughout the quarter despite little export activity, with further rises projected in the next two months.

Latin America

From January to August, Brazil's PP imports were 145,324 MT, a decrease of 10.6% year over year. In the fourth quarter of 2020, polypropylene prices grew 5.8% compared to January's values, which were valued at 1,090 USD/MT, but increased by 28.2% compared to May, the lowest point of the year. It was at its highest level since October of last year.

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