In Italy, the spot PP market slipped after a cost-led rally in November. PP buyers have started to receive December quotes at flat or slightly lower levels as sellers cited reasons. due to weak demand at year-end as well as buying resistance. Up to this point, initial quotes in Western Europe have mostly been paced by a steady payout of propylene, while pressure is stronger due to growing supply.

Activity declines due to high prices, auto sector shuts down

Having peaked in November, PP prices have fallen slightly in Italy. The overall PP market across the region stands at an all-time high, which is increasing buyer resistance.

FD – Italy – PPH – PPBC

In addition to limited purchases due to high prices and a year-end lull, the shutdown of the auto sector affected demand.

Sellers accept special arrangements to release excess inventory

This has increased supply as market sources continue to report replacements after automakers halted operations due to chip shortages and other shortages of other parts globally.

Most PP prices in Western Europe are reported to be stable, although some exceptional deals are pegged at much lower levels than the current range. Distributors of Western European manufacturers are said to have accepted much lower prices in an effort to clear up excess inventory that was originally intended for car manufacturers.

In Western Europe, transactions are expected to be as low as 1600-1700 EUR/ton PPH and 1700-1800 EUR/ton PPBC inj. according to the domestic method has been reported. However, these prices are not included in the index as they are expected to evaporate as the excess supply is consumed.

Import prices also fell

After steadily increasing prices over the past few months due to logistical bottlenecks, non-European origin products also saw a downward trend due to a weak global market and a slight drop in freight rates. However, still high shipping costs from Asia and lengthy completion times have kept imports apart despite attractive margins in Europe.

For imported goods, quote PPBC inj. of Korea saw some declines month-on-month, to EUR 1750-1800/ton CIF Italy, 60 days, delivery in February. PPH inj. US prices are quoted at EUR 1850/ton DDP Italy, 60 days, delivery in January.

Meanwhile, the quotation of goods of non-European origin available in the region is currently providing a more competitive advantage compared to the price level of suppliers in the region. PPBC inj. of Korea and China traded between 1880-1950 EUR/ton FD Italy, 60 days. A PPH quote inj. Middle East reached 1700 EUR/ton in a similar manner. In Western Europe, PPBC inj. of Korea was traded at 1950-2000 EUR/ton FD, 60 days.

The outlook for the first quarter is also not very positive

As PP prices remain at all-time highs, it is clear to many that markets in the region have no further upside potential. According to some market participants, weakness in other major markets could have spillover effects in Europe. Meanwhile, concerns about oversupply in China due to a series of new factory starts will make the country's presence more pronounced from 2022.

The price escalation throughout 2021 has affected global plastic resin consumption. While transportation costs remain high and energy price momentum could prevent prices from falling to pre-pandemic lows in the short term, increased resistance to excessive prices will weigh on European markets in the near term. first quarter of 2022.