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Today it is hard to relate to the market conditions present at the end of 2014 through into early February this year where polymer pricing and demand languished in the doldrums.
The factors so severely impacting the market today appeared barely plausible.
[/vc_column_text][/vc_column][/mk_page_section][mk_page_section attachment=”scroll” bg_position=”left top” bg_repeat=”repeat” bg_stretch=”false” enable_3d=”false” speed_factor=”4″ bg_video=”no” video_mask=”false” video_opacity=”0.6″ top_shadow=”false” section_layout=”full” sidebar=”Blog” min_height=”0″ full_height=”false” padding_top=”40″ padding_bottom=”0″ margin_bottom=”0″ first_page=”false” last_page=”false”][vc_column width=”1/2″][vc_column_text disable_pattern=”true” align=”left” margin_bottom=”0″]Nobody could have contemplated firstly that demand from processors would be so strong in February, and secondly that so much upstream capacity would be taken out of production as a result of un-planned maintenance.
The resultant declarations of force majeure have created consternation throughout many sectors of the industry.
The graph on the right clearly depicts the departure of feedstock and polymer prices from the price of crude oil, clearly demonstrating that the economics of a free market, in which demand is exceeding supply, is driving prices up as buyers clamber to secure material.
In fact, the supply situation is so dire that many processors are not able to find sufficient supply to meet requirements.
Whilst this sudden spike in European polymer pricing may encourage additional imports as traders look to take advantage of arbitrage opportunities, so far there is little indication that significant volumes are en-route. Furthermore, with the prospect of significant capacity remaining off-stream for a number of weeks, the supply situation on polyolefins and polystyrene is likely to remain tight.
These conditions are likely to persist until either demand eases, which could be as late as the summer holiday period, or supply improves either as a result of imports or when plants go back online.
In conclusion, there is little reason to doubt that the conditions for a ‘perfect storm’ are likely to persist through into May and possibly beyond.
The contrast in market conditions with engineering polymers could hardly be starker. In particular, the POM and PC markets remain very competitive and other engineering polymers remain under downward price pressure.[/vc_column_text][/vc_column][vc_column width=”1/2″][vc_column_text title=”Subscribe to price know-how” disable_pattern=”false” align=”left” margin_bottom=”0″]
A monthly publication looking at key factors that affect UK polymer markets.
The concept of a user friendly market report came from feedback about an article published in PRW (Plastics & Rubber Weekly) about the 2011 market outlook to which Plastribution made a significant contribution.
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