PolymerThursday, 25 June 2026·India
European PP Faces Further Downside as Market Correction Gains Pace
European PP markets remained under pressure toward the end of June, with prices continuing to move lower as buyers stayed cautious and sellers increased discounts to stimulate demand. Weak consumption, comfortable inventories, and expectations of additional price cuts in July have kept sentiment firmly bearish across the region.
Across both Italy and Northwest Europe, suppliers were reported offering larger concessions, including triple-digit reductions in some cases. Despite these efforts, buying activity remained limited as converters preferred to consume existing inventories rather than commit to fresh purchases. Many market participants believe the recent declines have not yet fully removed the premium that entered the market during the conflict-driven rally earlier this year.
Weak Demand Continues to Dominate
The biggest challenge for the European PP market remains a lack of demand.
Converters across the region continue to buy only for immediate requirements, while distributors report that customers are placing orders solely against confirmed sales. Inventory reduction remains the primary focus for many processors, particularly after purchasing expensive material during the market upswing.
The situation is becoming more pronounced ahead of the summer holiday season. Market participants in Germany and other major European countries expect operating rates and purchasing activity to slow further during July and August, potentially extending the current downturn.
Without a meaningful improvement in downstream demand, most players see little chance of a market recovery in the near term.
Conflict-Related Premium Continues to Fade
The current correction follows one of the strongest rallies witnessed in the European PP market in recent years.
Between late February and early May, PP prices surged by approximately 115% as supply concerns, elevated feedstock costs, and geopolitical uncertainty drove markets sharply higher.
Since reaching their peak, prices have already given back around 30% of those gains. However, market levels are still estimated to be roughly 50% above pre-conflict levels, indicating that a considerable portion of the earlier premium remains in place.
As crude oil prices continue to weaken and geopolitical tensions ease, many market participants believe additional corrections are still possible before prices fully normalize.
Lower Feedstock Costs Add More Pressure
Expectations for July have become increasingly bearish due to the anticipated decline in the European propylene settlement.
Many market participants expect the July contract to fall by around €200/ton, which could trigger another significant reduction in PP prices. Buyers argue that current market levels have yet to fully reflect lower feedstock costs and weak consumption trends.
Some players even believe homopolymer prices could move closer to the €1000/ton FD level later this year if demand remains subdued and raw material costs continue to soften.
Trade Developments Remain in Focus
The upcoming implementation of the EU-US tariff agreement is also being closely monitored.
While the agreement will provide duty-free access for several plastic products, its direct impact on the PP market is expected to be limited compared with PE. Nevertheless, market participants believe any increase in competitive import availability could further reinforce already negative sentiment.
At a time when supply remains sufficient and buyers have multiple sourcing options, even modest additional competition could place further pressure on pricing.
July Outlook Remains Bearish
Most market participants expect the correction to continue through July.
Lower crude oil values, expectations of a weaker propylene settlement, ongoing imports, and sluggish seasonal demand are all contributing to a negative market outlook. Buyers remain convinced that further decreases are ahead and continue to follow hand-to-mouth purchasing strategies.
A growing number of players believe PP prices could move significantly closer to pre-conflict levels if current conditions persist through the summer. Until demand shows signs of recovery, the market is expected to remain firmly tilted in favor of buyers.
For now, weak consumption remains the central issue, and without stronger end-user demand, sellers are likely to face continued pressure in the weeks ahead.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
Across both Italy and Northwest Europe, suppliers were reported offering larger concessions, including triple-digit reductions in some cases. Despite these efforts, buying activity remained limited as converters preferred to consume existing inventories rather than commit to fresh purchases. Many market participants believe the recent declines have not yet fully removed the premium that entered the market during the conflict-driven rally earlier this year.
Weak Demand Continues to Dominate
The biggest challenge for the European PP market remains a lack of demand.
Converters across the region continue to buy only for immediate requirements, while distributors report that customers are placing orders solely against confirmed sales. Inventory reduction remains the primary focus for many processors, particularly after purchasing expensive material during the market upswing.
The situation is becoming more pronounced ahead of the summer holiday season. Market participants in Germany and other major European countries expect operating rates and purchasing activity to slow further during July and August, potentially extending the current downturn.
Without a meaningful improvement in downstream demand, most players see little chance of a market recovery in the near term.
Conflict-Related Premium Continues to Fade
The current correction follows one of the strongest rallies witnessed in the European PP market in recent years.
Between late February and early May, PP prices surged by approximately 115% as supply concerns, elevated feedstock costs, and geopolitical uncertainty drove markets sharply higher.
Since reaching their peak, prices have already given back around 30% of those gains. However, market levels are still estimated to be roughly 50% above pre-conflict levels, indicating that a considerable portion of the earlier premium remains in place.
As crude oil prices continue to weaken and geopolitical tensions ease, many market participants believe additional corrections are still possible before prices fully normalize.
Lower Feedstock Costs Add More Pressure
Expectations for July have become increasingly bearish due to the anticipated decline in the European propylene settlement.
Many market participants expect the July contract to fall by around €200/ton, which could trigger another significant reduction in PP prices. Buyers argue that current market levels have yet to fully reflect lower feedstock costs and weak consumption trends.
Some players even believe homopolymer prices could move closer to the €1000/ton FD level later this year if demand remains subdued and raw material costs continue to soften.
Trade Developments Remain in Focus
The upcoming implementation of the EU-US tariff agreement is also being closely monitored.
While the agreement will provide duty-free access for several plastic products, its direct impact on the PP market is expected to be limited compared with PE. Nevertheless, market participants believe any increase in competitive import availability could further reinforce already negative sentiment.
At a time when supply remains sufficient and buyers have multiple sourcing options, even modest additional competition could place further pressure on pricing.
July Outlook Remains Bearish
Most market participants expect the correction to continue through July.
Lower crude oil values, expectations of a weaker propylene settlement, ongoing imports, and sluggish seasonal demand are all contributing to a negative market outlook. Buyers remain convinced that further decreases are ahead and continue to follow hand-to-mouth purchasing strategies.
A growing number of players believe PP prices could move significantly closer to pre-conflict levels if current conditions persist through the summer. Until demand shows signs of recovery, the market is expected to remain firmly tilted in favor of buyers.
For now, weak consumption remains the central issue, and without stronger end-user demand, sellers are likely to face continued pressure in the weeks ahead.
Stay ahead of market trends with the Credco app. For any queries, please reach out via WhatsApp at +91 8448083211.
