European polypropylene prices slid to Eur1,150/mt ($1,420) FD NWE Tuesday, a 19-month low, with producers facing a dropoff in demand as export opportunities dry up, according to market sources.
Until this week, spot prices had been largely shielded from sliding prices upstream.
The fall in the euro had led to an exodus of PP from Europe to markets like Turkey, where European producers were able to displace dollar denominated Middle Eastern and Asian material.
However, the tailspin in feedstock prices has dried up this demand source, according to industry participants. Consumers in Turkey and Africa, regions previously targeted by European producers, are not looking to make bookings and buyers in Asia were heard to be reluctant to take on material before January.
In Turkey, PP raffia grade has fallen to a 29-month low of $1,425/mt. Prices upstream have also been notably low, with propylene assessed at a 28-month low of $1,137.21/mt FD NWE and naphtha at $516.75/mt, up $5.50/mt from the five-year low reached Monday.
In addition, domestic demand was further softening as European converters took to the sidelines in the run up to Christmas.
A producer said that December demand was “not as expected” customers closing for two weeks over the festive season. “They are closing earlier than usual, on the 19th instead of the 23rd or 24th, and not reopening until the 6th or 7th of January.”
– Platts.com
