European Polypropylene Faces Downward Pressure Amid Rising Imports

Key Highlights

1. Indian Prices Stable: PP grades from MRPL, HMEL, and HALDIA are priced between ₹98,000–₹1,06,250/MT across Bhiwandi, Rajkot, and Delhi.
2. European Market Weakness: Rising imports and poor demand from auto and construction sectors drive down prices.
3. Geopolitical Risks Rise: US tariff threats on EU goods shake market confidence and impact oil.
4. Bearish Price Outlook: April and May PP prices likely to decline amid soft crude and oversupply concerns.

Domestic Price Snapshot: PP Offers in Key Indian Hubs

• In the polypropylene market, MRPL's PPHP TQ Film (HF010) is being offered at ₹1,02,000 per metric ton in Bhiwandi, while HMEL's PPHP IM (M12RR) is available at ₹99,500/MT in the same location. 
• Additionally, MARLEX's PPHP Raffia (HGX030SP) is quoted at ₹98,000/MT in Bhiwandi. Moving to Rajkot, MRPL's PPHP Lamination (HY035R) is priced higher at ₹1,04,500/MT. Meanwhile, in Delhi, HALDIA's PPCP Random (M312 - Prime) is being offered at ₹1,06,250 per metric ton.

Global Trends: Oversupply Hits Europe’s PP Market

• As per the Polymerupdate reports, the European polypropylene market witnessed a bearish trend during the past week, with supply increasing and prices declining amid weakening fundamentals. 
• A notable rise in availability, particularly since March, has been driven by consistent inflows of imported materials from South Korea and competitive offers from Asia, adding pressure on domestic sellers.
• Although packaging sector demand remained stable, the broader PP consumption scenario was underwhelming due to muted activity from the automotive and construction sectors. 
• Even an unexpected disruption at the Tarragona PP unit on April 1 failed to tighten supply, as demand across critical sectors remained subdued. 
• Additionally, some buyers adopted a reserved stance, seeking discounts and avoiding large-volume purchases in light of bearish upstream naphtha and oil prices.

Geopolitics & Trade: Tariff Shocks Create Uncertainty

• A key development impacting sentiment was the April 2 announcement by US President Donald Trump to impose a 20% blanket tariff on EU imports, including a 25% tariff on all automotive imports. 
• This triggered a market sell-off, leading to a sharp drop in oil prices and increasing caution among PP buyers and sellers. In response, the EU proposed retaliatory tariffs, although their implementation has been suspended following a 90-day hold from the US.
• While PP itself is not directly targeted in tariff lists and the US holds negligible PP market share in Europe, the automotive sector—a major PP consumer—is likely to be impacted due to its export dependence on the US, especially from Germany, where over 10% of auto production is US-bound. 
• Moreover, the potential for an oversupply in Asia—if consumer demand weakens due to trade friction—could lead to higher PP imports into Europe, further swelling supplies.

Expert View: Bearish Sentiment to Linger

• It is expected that polypropylene (PP) prices will remain bearish in April, with freely negotiated contract prices likely to decline further than the €55/ton drop recorded in April's feedstock propylene monthly contract price (MCP). 
• This downward pressure is anticipated due to a combination of seller push to offload volumes, Easter-related shutdowns at converter facilities, and persistently weak demand particularly from the automotive and construction sectors. 
• Furthermore, the ongoing softness in naphtha and crude oil prices may lead to a reduction in the May propylene MCP, potentially extending the bearish pricing trend for PP into the following month.