US-Iran MoU weighs on PP outlook, but supply tightness limits price losses

The US and Iran are scheduled to sign a memorandum of understanding on June 19, clearing the way for the reopening of the Strait of Hormuz. Crude oil prices have already fallen sharply in anticipation, eroding cost support for polypropylene (PP). While tight supply from plant outages will cushion prices in the near term, the market is widely expected to turn lower as production normalises.

The signing of the US-Iran memorandum on 19 June is expected to trigger a notable decline in crude oil prices, significantly weakening cost support for polypropylene (PP). Near-term supply tightness, however, driven by concentrated plant turnarounds and feedstock shortages, will limit the downside in late June. But as the