Polymer prices – selective, supply-led price rises in February
However, the price increase for styrene monomer (SM) exceeded expectations, rising by €120 compared to January. Polyolefin producers have tried to implement smaller price increases of €20-40, but this has only been successful for those grades where supply is tight. Polystyrene producers have increased their prices by €60-120. The smaller price increase was for producers where benzene is the starting feedstock in the value chain.
The seasonal price increase has not yet begun. Plastic converters are buying cautiously, most are trying to keep their inventories low; partly to optimize cash flow, partly to avoid losses caused by unpredictable price movements. In addition, the price assessment is hampered by the fact that there are offers on the market for "cheap" imported grades arriving in March and April. However, price movements and supply are not clear in the case of imports either. Due to the Lunar New Year, the availability and supply of Far Eastern polyethylene and PVC grades decreased, so their prices increased by 40-60 euros. The price of North American grades has only increased slightly, but winter storms are delaying the arrival of shipments.
The strengthening of demand is being hampered by cold winter weather in Poland and the Baltics. While these markets account for more than 50% of the total Central European polymer demand. Meanwhile, demand in the central and southern regions is already picking up noticeably. In addition, converters request immediate or very short delivery times due to their low inventory levels.
Low converter inventory levels and the postponed olefins monomer price increase in February are straining polyolefins markets. For now, the threat of import supply and negative expectations for demand are keeping prices low. However, if demand picks up in Poland, this could push prices up. Especially as Orlen and BOP are also preparing to shut down from mid-April. Thus, a shortage of some popular Central European grades could easily arise, which imported grades cannot replace.
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myCEPPI
myCEPPI provides a weekly price report for commodity plastics.
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