The rapid price surge reflects strong cost pressure and supply constraints as the ongoing Middle East conflict and the continued blockage of the Strait of Hormuz disrupt feedstock procurement and limit polymer imports into Europe.
Massive €200–300 hikes in March PP deals
The bullish momentum accelerated quickly after early expectations of €100/ton increases became outdated within days. Market participants report that many March PP deals were concluded with hikes of €200–300/ton compared to February levels.
Supply conditions have worsened further as some regional producers closed their order books, while others raised concerns about supply visibility due to disrupted trade flows. Earlier in the week, LyondellBasell declared force majeure on certain polyolefin supply obligations in Europe, adding further pressure to the market.
Distributors and traders also implemented increases of up to €250/ton, though often on limited volumes, as many sellers prefer to preserve inventories in anticipation of tighter supply ahead.
Some producers are reportedly targeting even larger price adjustments, with increases of up to €500/ton being discussed to offset soaring production costs and recover margins after months of pressure.
Demand shows partial improvement
Demand has recently improved as converters rushed to secure material amid growing concerns about supply shortages following force majeure announcements and order book closures.
Converters with urgent requirements were forced to accept price increases of up to €300/ton compared to last month. However, buyers with comfortable inventories largely remained cautious, relying on existing stocks rather than purchasing at elevated price levels.
Some converters also reported that orders placed earlier in the week were later cancelled by suppliers, reflecting the rapidly changing market conditions and uncertain supply outlook.
Limited imports strengthen regional market
Import availability has become another major concern. Traders handling non-European material say many overseas suppliers are currently refraining from issuing new offers due to supply disruptions linked to the Middle East conflict and shipping challenges around the Strait of Hormuz.
The disruption of this key maritime route has complicated both feedstock procurement and polymer logistics, significantly reducing the arrival of cargoes from Asia and the Middle East.
At the same time, disruptions in Asia’s petrochemical sector have forced several producers in China, South Korea, and Taiwan to cut operating rates, declare force majeure, or shut units due to feedstock shortages. As a result, PP prices in China, Vietnam, and India have surged sharply, further limiting export availability.
Major traders such as Vinmar and Tricon Dry Chemicals have also warned customers about potential shipment disruptions, additional costs, and possible order cancellations.
Bullish outlook continues
Following the latest increases, European PP prices have reached a one-year high, according to ChemOrbis Price Index data.
Looking ahead, the near-term outlook remains strongly bullish. Continued geopolitical tensions, disrupted logistics, and elevated energy costs are expected to maintain upward pressure on regional production and limit import availability.
Market participants say another round of price increases cannot be ruled out if the current supply disruptions persist.
Attention is already shifting to April contracts, with many players anticipating further hikes should crude oil prices continue rising and logistical disruptions remain unresolved.
Under these conditions, the European PP market is expected to remain highly volatile, with pricing largely influenced by energy market movements, geopolitical developments, and the availability of both regional and imported material.
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