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Can the strengthening of European PP prices continue in the later stage after the Red Sea crisis?

International polyolefin freight rates showed a weak and volatile trend before the outbreak of the Red Sea crisis in mid December, with an increase in foreign holidays at the end of the year and a decrease in transaction activity. But in mid December, the Red Sea crisis broke out, and major shipping companies successively announced detours to the Cape of Good Hope in Africa, causing route extensions and freight increases. From the end of December to the end of January, freight rates increased significantly, and by mid February, freight rates increased by 40% -60% compared to mid December.


Local sea transportation is not smooth, and the increase of freight has affected the flow of goods to some extent. In addition, the tradable volume of polyolefins in the first quarter of the upstream maintenance season in the Middle East has sharply decreased, and the prices in Europe, Türkiye, North Africa and other places have also increased. In the absence of a complete resolution of geopolitical conflicts, it is expected that freight rates will continue to fluctuate at high levels in the short term.

Production shutdown and maintenance companies are further tightening their supply. Currently, in addition to Europe, the main raw material supply area in Europe, the Middle East, also has multiple sets of equipment for maintenance, which limits the export volume of the Middle East region. Companies such as Saudi Arabia's Rabig and APC have maintenance plans in the first quarter.

Post time: Mar-11-2024