European Polypropylene (PP)prices rose in late June 2025, driven by supply shortages from outages and reduced output, while weak demand limited market support.
The European PP market continued its upward trajectory across Europe, with prices increasing by 3.2% during the second half of June 2025, primarily driven by persistent supply-side disruptions. Availability of PP remained notably constrained due to a combination of production outages, force majeures, and sustained reductions in operating rates maintained by producers at domestic PP production facilities.
In terms of feedstock, the market witnessed a notable 4% increase in the price of feedstock propylene. Restricted supply as a result of scheduled maintenance turnarounds and unexpected shutdowns helped to sustain this upward pricing tendency. As feedstock availability tightened, PP producers faced increased cost pressures and further constraints on output, intensifying the already strained supplies which consequently resulted in emergence of regional pockets of scarcity, prompting spot prices to climb upwards.
Import volumes of PP from Asia also weakened during the same period as exports of duty-free PP from South Korea to Europe fell from 264 metric tons in April to 236 metric tons in May 2025 as per customs data from Trade Statistics Korea, indicating a decline of around 10.6% month-on-month. Overall market availability further tightened as a result of the decrease in shipments from Asian countries, which limited the flow of imports at competitive prices. Although there were still cargoes from the Middle East, the presence remained low, which gave the European PP supply pool little respite. Neverthelss a tiered pricing structure continued to remain witnessed in the market although Asian-origin material was heard to have been less in supply and in gradually gaining in strength as indicated by the fact that freight charges rose by approximately 54% during May 2025 thus leading to predominately bullish market conditions for PP.
Spot availability continued to remain curtailed because of the domestic PP plants' running rates remaining restricted throughout June, with average utilization levels reported to be between 60% and 66%. A number of regional pockets experienced ongoing product scarcity because of this prolonged low output, which fueled the increasing pricing tendency. Consequently, the disappearance of lower priced imports from Asia resulted in locally produced PP transacting at higher prices which were reported to have been gaining a stronger foothold in the market thus leading to higher prices being reflected during this timeframe.
Despite supply conditions gradually tightening as indicated by the disappearance of Asian priced imports, the downstream demand fundamentals offered limited support as structural demand from the primary packaging, automotive and construction remained subdued. With order intakes in May 2025 reflecting year-over-year declines in both domestic and international categories, the automobile industry continued to remain under pressure, which pulled the market lower. Meanwhile, construction activity throughout the region continued to contract as both new orders and overall output continued to decline at an accelerated pace, leading to further procurement reductions. Housing construction remained the weakest segment, followed by commercial and civil engineering, both of which reported sharper contractions which continued to impart a downward pull to the domestic PP market.
In the packaging sector, PP demand showed marginal signs of growth. However, market players continued to adhere to a need-based purchasing model due to continued macroeconomic uncertainties. While consumer confidence improved slightly, providing slight support originating from the packaging sector, market sentiments remained negative, keeping overall structural demand weak, highlighting the fragile recovery which did not provide much support.
Prices for PP are anticipated to continue rising in the upcoming months due to ongoing domestic supply shortages and a decline in exports to Asia and the Middle East. Expectations of the tightness in supply continue to prevail as producers continue to maintain lower operating rates in order to try to lengthen the market situation and the ahead of the upcoming summer vacations in Europe thus marginally edging prices upwards.
