Polymer prices - demand remains weak despite expectations of a September price increase
This has significantly undermined the credibility of the price increases, and as a result, it will be difficult to pass on the September price increases in the markets. However, price increases are expected in September for both olefin and styrene monomers. Polymer manufacturers will also try to follow the monomer price increases, which is one of the reasons for order stops in the case of LDPE, for example.
Rising feedstock prices are driving a double-digit increase in olefin monomer prices, ranging from 40 to 60 euros; polystyrene manufacturers also expect a similar increase in SM prices. Although some polymer manufacturers will attempt to increase prices beyond the monomer price change, they will likely quickly correct in the event of customer resistance.
Successful price increases are expected primarily for polyethylenes, while converters are clearly struggling with a lack of demand for polypropylenes and polystyrenes. The impact of finished product imports is increasingly visible, primarily in the case of flexible packaging materials. In the case of PVC, the July price increase in incoming imports and the limited availability typical of Central European manufacturers may be the basis for the September price increase.
Demand is cautious and is expected to remain so in September and throughout the fall. As end-user orders continue to arrive in smaller quantities than usual, converters are also reflecting this in their purchases; they are more cautious and purchasing smaller quantities. This is the reason why there are no advance purchases despite the expected price increases. After the spring supply shock, demand is now driving the markets and this is expected to remain the case throughout the fall and into December.
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