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    Home > Chemicals Industry > China Chemical > The global polypropylene market will face challenges in logistics, weather, and epidemics

    The global polypropylene market will face challenges in logistics, weather, and epidemics

    • Last Update: 2021-06-10
    • Source: Internet
    • Author: User
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    Market conditions in various regions are uneven, and it is expected that the uncertainty of PP will increase in the second half of 2021.
    The factors supporting prices in the first half of the year (such as healthy downstream demand and tight global supply) are expected to continue into the second half of the year.
    But their impact may be weakened by the ongoing logistics difficulties in Europe, as the United States is preparing for the upcoming hurricane season and new production capacity in Asia.


    In addition, a new round of new crown infections is spreading in Asia, disrupting people's expectations of improved PP demand in the region in the future.


    Uncertainty of the Asian epidemic rises, restraining downstream demand


    In the second half of this year, the Asian PP market was mixed, as the strong demand for downstream medical and packaging applications may be offset by increased supply, a new round of the new crown epidemic and continuing problems in the container shipping industry.


    From June to the end of 2021, approximately 7.


    04 million tons/year of PP production capacity in Asia and the Middle East is expected to be put into use or restarted.
    This includes China's 4.



    The actual progress of some expansion projects is uncertain.


    Considering the possible delays, the impact of these projects on the supply in the fourth quarter of 2021 may be postponed to 2022.



      Sources said that during the global PP shortage at the beginning of this year, Chinese producers demonstrated the feasibility of exporting PP, which helped increase export channels and increase the market’s acceptance of competitively priced Chinese PP.


      Although the long-term opening of China’s export arbitrage windows like February to April is not common, as the pace of capacity expansion accelerates, Chinese suppliers may continue to explore export opportunities, especially for homogeneous polymer commodities.


      Although the demand for medical, sanitary and packaging-related applications, vaccination and certain economic recovery will help support the demand for PP, there is a new round in Asia, especially India (the continent’s second largest demand center) After the epidemic, the uncertainty is getting bigger and bigger.


      With the advent of the hurricane season, PP supply in the U.


    S.



      In the second half of 2021, the US PP market will have to address some key issues, including responding to healthy demand, tight supply and the upcoming hurricane season.


      Market participants will face an 8 cents/lb ($176/ton) price increase announced by suppliers in June.


    In addition, the price may continue to rise due to the rebound in raw material monomer prices.



      The increase in supply is expected to meet the strong domestic demand for resin, making export supply weak before 2021.


    The market predicts that as the operating rate returns to normal in June, prices will fall under pressure, but as prices climb in the second quarter, this sentiment will also weaken.



      Platts FAS Houston’s list price has risen by US$783/ton since January 4, an increase of 53%.


    The valuation at that time was US$1,466/ton, as the winter storm in the area shut down many production plants, further exacerbating the existing Tight supply situation.



      Before the cold winter, the PP industry had been affected by two hurricanes in August and October 2020, which affected factories and cut production.


    Market participants may pay close attention to the production situation in the U.



      The US hurricane season starts on June 1 and will last until November 30.


      Uncertainty in European supply as imports are challenged by a global shortage of containers


      Due to the global shortage of containers restricting Asian imports, it is expected that the supply of PP in Europe will face unfavorable factors.


    However, with the successful promotion of vaccines on the African continent, the lifting of epidemic-related restrictions and changes in consumer behavior, new demands may emerge.



      Healthy PP orders in the first half of 2021 made prices hit a record high.
    Due to supply shortages, the spot price of PP homopolymers in Northwestern Europe rose by 83%, reaching a peak of 1960 euros/ton in April.
    Market participants agreed that PP prices in the first half of the year may have reached the upper limit and may be revised downwards in the future.


      A manufacturer said: "From the perspective of pricing, the market has reached its peak, but I don't think there will be a big drop in demand or pricing.
    "


      As for the rest of this year, the European PP market will need a remedy to make up for the global container shortage, which has caused supply chain delays in the first half of the year and additional logistics costs to keep the market in balance.


      Both producers and processors will use the traditional summer quiet period to increase inventory levels and prepare for the expected rebound in demand in the second half of the year.


      The relaxation of blockade restrictions in Europe is also expected to inject new demand into various parts of the service industry, and the increase in packaging demand may continue.
    However, given the uncertainty of the extent of the recovery of European car sales, the demand outlook for the automotive industry is not clear.


      Transfer from: China Plastics Online

      

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