The polyolefins market experiences product shortages

Despite the shortage of some materials on the market, there is no panic or increase in purchasing activity on the part of processors. Producers of finished products purchase raw materials only on an as-needed basis and, in some cases, use materials that are already in stock and do not plan to purchase for this month.

Processors, for their part, believe that the price of LDPE is high this month. Several scenarios are being discussed. The first is either to refrain from buying and not produce film, or to buy the raw materials and then sell the film with almost no margin. Furthermore, it should be noted that some large processors, who have a sufficient financial cushion, are buying polyolefins from traders with delivery in April, believing that raw material prices can continue to rise.

Due to downtime and force majeure events at various plants, the market is short of LDPE with MFI=0.3-3, HDPE for film and PP copolymer. Consequently, manufacturers and traders keep the prices of these materials at a sufficiently high level. It cannot be said that there is a shortage of these materials on the market, however, their limited availability allows higher prices to be negotiated, even above average market levels.

PP homopolymer Italy VS Europe euro/ton – Powered by Commodity Evolution

At the same time, there is a surplus of PP raffia, attributed to the entry of a new player on the market and low purchasing activity. In this case, processors are successfully negotiating price reductions for this material.

According to market participants, prices are expected to remain at the same level until the end of March. Producers do not expect to lower prices in April. There will certainly not be a general announcement of price reductions next month, but it is possible that producers will give in during the transactions.

There is a possibility of a reduction in PP homo prices due to surpluses and low demand. However, if there is a reduction, it will be minimal – around 20-30 EUR/ton.

PP homopolymer – Europe/Italy euro/ton – Powered by Commodity Evolution