PP Prices Fall in June on Declining Feedstocks, but July Outlook Now Bullish

Polypropylene (PP) markets moved lower across all regions in June, with contract prices for both homopolymer and copolymer grades declining by an average of 8.5 cents per pound (cpp) as resin values tracked the sharp decrease in propylene monomer costs.

The June price decline offset the margin increases sought by producers as falling propylene monomer prices limited the ability to maintain those initiatives. Many buyers continued to argue that previous increases were not supported by market conditions and pushed for further margin relief. However, discussions around additional reductions were delayed toward the end of the month as demand improved and supply became more limited due to several production disruptions.

In Townend’s survey, PP copolymer prices declined across all major grades during June, including injection molding, sheet and profile, and off-grade materials. Most buyers surveyed reported lower resin costs during the month. Deliveries increased slightly compared with May, and processors built inventories as lower pricing encouraged purchasing activity.

Homopolymer markets followed a similar trend, with lower pricing recorded across general purpose, film, fiber, sheet, strapping, and off-grade grades. The majority of buyers surveyed also reported paying less for resin in June. Deliveries were slightly below the previous month, while processor inventories increased modestly.

The outlook for July now appears less certain as propylene monomer prices are continuing to move sharply higher as the month progresses. Buyers who sought margin relief may now be looking at a rollover to an increase of between 1.0 and 3.0 cpp for July PP. The impact on July PP pricing will depend on the direction of propylene monomer costs during the month. Domestic spot PP prices are also ticking higher.

US spot export prices that were declining in the early days of July are also rising with the increase in feedstock costs, but demand remains weak, with US pricing remaining non-competitive in the global market.

After the broad price declines seen in June, the final direction of propylene monomer pricing remains the key factor shaping expectations for the weeks ahead.

‍Plastic Market Monthly provides monthly North American price benchmarks for HDPE, LDPE, LLDPE, PET, PP, PS, and PVC. Contact us for more information or to request a complimentary edition.

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