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Epidemic, hurricane, logistics!

 Last Update: 2022-08-28
 Source: Internet
 Author: User

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Uncertainty about the polypropylene (PP) market in the second half of 2021 is expected to be rising due to the large differences in market conditions in various regions of the world

Asia: Multiple uncertainties dampen supply and demand

Downstream demand in Asia and the Middle East may be suppressed due to rising uncertainty about the outbreak

According to statistics, in terms of production capacity, from June to the end of this year, about 7.
04 million tons/year of PP production capacity in Asia and the Middle East is expected to be put into operation or restarted, including 4.
3 million tons/year in China and 2.
74 million tons in other regions.
/year

PP demand is supported by demand from medical, hygiene and packaging related applications, especially vaccination and economic recovery are contributing to PP demand

North America: Hurricane season may exacerbate supply constraints

The key issues for the U.
S.
PP market in the second half of the year include strong demand, tighter supply and the upcoming hurricane season

Domestic demand for PP resin is strong in the United States, and supply is also increasing

However, from past experience, because the US PP industry is concentrated in the Gulf Coast region, the region is often affected by hurricanes from June to November every year, which has become an important uncertainty factor for the local PP market

Europe: logistics problems difficult to alleviate

European PP supplies continue to face undersupply challenges as a global shortage of containers restricts the inflow of imported goods from Asia

In the first half of this year, European PP prices have hit record highs due to strong PP demand
.
In April, the spot price of PP homopolymer in Northwest Europe rose by 83% to EUR 1,960/t amid supply shortages
.
Market participants agreed that the PP price may have reached the upper limit in the first half of the year and will be revised downward in the future, but it still depends on the recovery of logistics
.
"If you look at pricing, the market has peaked, but there won't be a big drop in demand or pricing," said one producer
.

Logistics issues will become the most critical uncertainty factor in the European PP market
.
Market participants expect the European PP market will need to remedy the global container shortage and try to balance the market for the rest of the year
.
Both PP resin producers and processors will take advantage of the traditional summer off-season to raise inventory levels in preparation for an expected pick-up in demand in the second half of the year
.

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