For the most part, European polypropylene producers in November had little choice but to pay homage to the decline in the propylene reference contract and adjust PP selling prices to match. Due to the fact the demand was well below average, despite a slight improvement against October, even output reductions were not enough to keep the market in balance.
It was a buyer’s market, and each was free to decide where to buy. In a similar market environment, the propylene price fall was passed seamlessly through to buyers of PP compounds. As converters’ inventories remained full, demand threatened to come to a screeching halt in December.
OEMs, too, are likely to shut up shop for an extended period. The standstill in fact will affect the entire supply chain, including compounds, and polymer producers also will operate a low flame.