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US PP imports slip in May, but more is on the way

HOUSTON, July 9, 2018 (PCW) -- US PP imports, including propylene copolymers, were down 11% in May at 86 million pounds, but remained elevated relative to the 2017 average of 72 million pounds/month, according to the US Commerce Department.

PP imports have surged twice in the past year, once in the aftermath of Hurrican Harvey and again in 1Q as the market responded to a spike in domestic propylene and tighter domestic PP supply.

US polymer grade propylene (PGP) contract prices peaked at 59 cpp in January 2018, but PP imports volumes did not rise significantly until March, reflecting the 1-2 month lag in booking a cargo of imported PP and the cargo's arrival.

US PGP prices began rising again in May-June 2018 and PP supply grew tighter at the same time, prompting renewed interest in PP imports.

As a result, import volumes are expected to rise in Jun-August, but the magnitude of the increase remains to be seen.

PP export volumes have been steady in 2018 at a year-to-date average of 312 million pounds/month. However, 81% of that volume (253 million pounds/month) stays inside North America, which US producers consider an extension of the domestic market.

PP is used in wide range of applications, including packaging film, automotive parts, disposable diapers and rigid containers. -- David Barry

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