The Week in Chemistry: US PE spot prices for end of July hold steady to US$0.01/lb, PP down US$0.02/lb; China petrochemical, olefin makers face negative margins into Q3, Brazil's tariff cuts on PP, PVC pose import competition for domestic producers

Sample article from our Chemicals Industry

LOS ANGELES , August 5, 2022 () –


US Resins

US PE and PP prices declined in the last week of July. Demand was largely slow as buyers hold off from deals, anticipating further pricing declines.

July PE contracts are expected to erase the US$0.03/lb increase seen in May. Producers aim to push for a contract hike of $0.05/lb in August, though it remains uncertain whether the market downtrend will persist.

Meanwhile, spot PE prices were steady to $0.01/lb lower, varying by grade.

PP spot prices lost another $0.02/lb amid negative sentiment, despite higher monomer propylene costs. Availability improved against lackluster demand, exacerbating downward pricing pressure.

July PP contracts are expected to settle downward by $0.06/lb to $0.07/lb, tracking propylene downward in addition to eroding margins.

The primary source of this information is Plastics Today.


China Petrochemicals

China’s petrochemical sector faces operating losses headed into the third quarter. 

Chinese propylene dehydrogenation plants, for example, saw losses of 600-900 Yuan/tonne in recent months and suffered even deeper losses in June.

In other parts of Asia, operators of naphtha crackers have faced poor margins for olefins, and are hoping for a rebound in propylene demand. Nevertheless, crackers are likely to decrease their run rates in September and October, or bring forward their planned maintenance outages, according to a North Asia-based operator.

Feedstock propane averaged US$731.05/tonne CFR North Asia in July, down from $771.14 in June.

Similarly, naphtha assessments averaged $785.11/tonne CFR Japan, down from $822.89 in June and a high of $1,158.63/tonne on March 7.

The primary source of this information is S&P Global Platts.

Brazil PP Tariffs 

The Brazilian government has announced temporary reductions in its tariffs on PP and PVC from 11.2% to 4.4%, the Ministry of Economy said on August 4.

The reduction is effective for one year.

According to Braskem, the changes will have an impact on the company’s business, including investment decisions within Brazil.

The company noted that it has always prioritized supplying the domestic market in Brazil, which is currently not suffering a lack of supply. The additional flow of imports may pose competition.

The primary source of this information is S&P Global Platts.

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Dan Rivard
Dan Rivard
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