Polymer prices - demand expected to strengthen and prices to rise slightly in March
The propylene monomer price published so far has been as expected, with the March contract price for propylene up €35/t compared to February. It is expected that the prices of ethylene and styrene monomer will also show a similar increase.
Although feedstock price changes would have allowed for a larger monomer price increase, caution and considered price changes seem to have characterized the monomer and polymer markets for three months now. A small increase in monomer prices allows a small increase in polymer prices. In fact, it is very likely that the polymer price increase, even if polymer producers try, will be smaller than the monomer price change.
European polymer manufacturers have recently learned to be opportunistic in pricing and to react quickly to competitors' pricing. Therefore, price testing is expected to continue until Thursday next week. Polymer manufacturers are starting to test buyers to see what price they are willing to accept. The starting price for all will probably be the "+ monomer" price change from early February. However, due to rapid market testing, the price level at the end of the first week of March will be lower than at the beginning of the week. Those who hold their prices will slide off the contracts at the beginning of the month and will be forced to sell at spot prices in the second half of the month.
This changed seller behavior results in a flat price curve and worsens the profitability of polymer manufacturers. Indeed, in the case of PVC, this is leading to the bankruptcy of some producers. Caution characterizes not only polymer manufacturers, but also converters, therefore the usual seasonal advance purchases are not typical. The usual significant seasonal increase in demand is therefore not typical.
However, demand will strengthen in March, and even the price of imported polymers will rise. However, we do not expect a significant price increase of more than 30 euros for European polymer prices, and in fact, a roll-over is more likely for PVC. Exceptions are the grades whose availability is reduced due to maintenance.
The market expects a price increase for SM. However, price increase expectations decreased significantly by the end of February. On Friday last week, most people were predicting a cosmetic price drop of 20-40 euros. However, Friday's benzene price quote showed a slight decrease, which could result in a roll-over or a smaller SM price decrease.
It is not yet known whether the air strikes against Iran launched on Saturday morning will be followed by a serious war. However, market participants have become resistant, something happens every week that in theory has a serious impact on supply, but nothing happens. Oversupply and wide availability continue to characterize the markets now. Moreover, feedstock price increases have not taken effect in the last 3 months.
-
myCEPPI
myCEPPI provides a weekly price report for commodity plastics.
-
VACULA s.r.o.: Stable supplies of plastic granulates even in uncertain times
In the current complex global market environment, influenced among other factors by geopolitical tensions, many companies are facing uncertainty in supply... -
Lifocolor s.r.o. explains how to choose the right masterbatch granule size
Are you dealing with colour inconsistencies, material segregation in the hopper, or inaccurate dosing? One possible reason may be an unsuitable granule size....
