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US PP imports rise to 28-month high in August

HOUSTON, October 8, 2018 (PCW) -- US PP imports, including propylene copolymers, totaled 54,102 mt in August, the highest volume of imports since April 2016, according to the latest trade data from the US Commerce Department.

The August import volume is 29% higher than the twelve-month average, and signals a response by domestic PP end-users to resin costs that are among the highest in the world.

The surge of imports has some market observers drawing parallels to the PP market correction of 2016, when rising imports, debottlenecking of domestic PP plants, and domestic demand destruction caused a collapse in PP spot prices.

PP imports averaged nearly 50,000 mt/month in 1H 2016, while HoPP railcar spot prices on an FOB Houston basis fell from 55.651 cpp in January 2016 to 40.25 cpp in July 2016.

Propylene monomer prices are much higher now than they were in 2016, so producers do not have as much room to lower PP prices while keeping propylene-PP margins at acceptable levels.

PP import volumes are expected to remain high in September and October, as the US PP market has maintained a large premium to international markets.

South Korea was the largest supplier of PP imports in August, with cargoes totaling 11,071 mt, followed by Singapore (6,596 mt), Saudi Arabia (5,311 mt), Colombia (5,148 mt) and Germany (3,562 mt). Most of the material from Germany and Singapore is classified as propylene copolymers (<95% propylene content). -- David Barry

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