Prices for polypropylene stabilized in the early part of June 2025 on the European market. The delicate balance between supply and demand, which was bolstered by reduced domestic production and stable inventory levels, was the cause of this stability in PP pricing.
Prices for polypropylene stabilized in the early part of June 2025 on the European market.听 The delicate balance between supply and demand, which was bolstered by reduced domestic production and stable inventory levels, was the cause of this stability in PP pricing.听 Due to a consistent flow of imports from the Middle East and Asia, the market has not yet encountered a major supply shortage despite unscheduled shutdowns and output reductions at important plants throughout Europe.
Domestic PP production continued to operate at reduced run rates, with most European producers maintaining curtailments amid subdued downstream demand in hopes of lengthening the market situation. However, the availability of imported PP particularly from the Middle East and Southeast Asian regions, helped offset any potential supply gaps thus keeping availability ample. As a result, the supply environment was generally sufficient, enabling processors to meet their demands without encountered major obstacles.
Weak demand fundamentals in early June 2025 are the key factor behind the bearish pressure still present in the larger European PP market. Primary demand for PP from the downstream automotive and construction industries continued to exhibit signs of softness. In the automotive sector, market sources confirmed a 4% decline in domestic orders and a 6% drop in international orders year-on-year for May 2025. In addition, overall orders decreased by 6% from May 2024, indicating ongoing demand challenges amid US political administration trade uncertainty. Additionally, in reaction to President Trump's threat of a 50% tariff on EU exports, the European Union is contemplating retaliatory levies against US-made polymers, including PP.听 The EU is considering a 25% tariff potentially extending duties to nearly all major US polymers, including PP, and others鈥攖argeting up to 1 million tonnes of polymer imports in 2024. While the US has delayed implementing its tariffs until July 9, the EU has already listed 60 resin and plastic products, including PP homopolymers and copolymers, for possible countermeasures.
Similarly, the construction sector across the Eurozone remained in contraction territory midway through Q2 2025. Construction activity and new order inflows both declined at accelerated rates, prompting further reductions in purchasing activity, including for construction-related polymers such as PP.
Market participants further reported a tiered pricing structure, with domestically produced European PP occupying the highest price floor, Middle Eastern imports occupying the mid-range, while Asian-origin PP forming the lower end of the pricing spectrum. Because European companies are competing in these markets, domestic producers are under additional pressure to reevaluate their pricing strategy, which is reflected in this pricing hierarchy that takes into account supply chain dynamics and cost differences.
Adding to the bearish sentiment across the European PP market is the continued depreciation in feedstock Propylene prices, which declined by approximately 0.5% over the past week. This reduction in upstream costs consequently eased PP production expenses but at present has not translated into any upward pricing momentum for PP due to the oversupplied and demand-weakened landscape.
With inventories remained sufficient, processors and downstream customers across Europe adopted a cautious procurement approach, limiting purchases to only essential volumes and awaiting potentially more competitive offers in the coming weeks as imported material from abroad continued to trade at lower prices听 than domestically produced PP. This wait-and-see sentiment has resulted in a quieter market environment, with limited trading activity and subdued negotiations.
All things considered, the European PP market is still dealing with a confluence of negative factors, including weak downstream demand, strong availability due to imports, and falling feedstock prices. The construction and automotive industries are not showing any quick indications of recovery, so it is anticipated that PP prices will continue to be pressured for the rest of June 2025. Until more reliable demand data or supply interruptions appear to reverse the current trend, market players are probably going to continue to take a cautious approach.
