Volatility continues as PP resin prices drop

The North American polypropylene market remains as volatile as ever.

PP prices reversed direction in April, dropping an average of 11 cents per pound. PP prices had been up 8 cents in March.

The price drop matched a drop seen in prices for polymer-grade propylene (PGP) feedstock. The increase in March also matched PGP.

Prices had been up a total of 27 cents in the first three months of 2023. By comparison, prices had been down a net of 42 cents for full-year 2022.

The April price drop on both PP and PGP was anticipated by New York-based PP supplier Blue Clover LLC. In a market update, officials with the firm said that it has seen less PP resin being offered into the market in late April compared to the end of March.

"This is a possible sign of the long market beginning to balance out," they added. "This balancing can still take several months, which is why we think its greater than 50-50 that PP pricing will slightly decrease in May, maybe 3-6 cents for prime."

Blue Clover officials previously had described April as "a perfect storm in place for PP prices to drop. … This storm is made up of increasing North American and Chinese PP supply along with decreasing North American and Chinese PP demand."

North American PP supply was increased in mid-2022 when Heartland Polymers started production in Strathcona County, Alberta. Later in the year, the firm began making propylene monomer at a propane dehydrogenation (PDH) plant at the site.

Heartland's PP plant has annual production capacity of almost 1.2 billion pounds. In a recent interview with Plastics News, Yonas Kebede, PP sales and marketing director, said the plant "already has run at max rates. … It's proven out."

He added that major end markets for the firm's PP output are fiber, film, biaxially oriented film and injection molding. The North American PP market is a bit oversupplied right now, according to Kebede, but should be balanced in 2024.

More recently, PP maker LyondellBasell Industries reported that first-quarter sales in its Olefins & Polyolefins-Americas unit — including PP and polyethylene resins —were down 25 percent to $2.8 billion. For sales volume in pounds, O&P-Americas had first-quarter PP sales volumes down 8 percent to 550 million pounds.