Could the Tables Soon be Turning on Polyolefin and Engineering Polymers Pricing?
Whilst the moderate recovery in Crude Oil price has so far provided support for the requests of polyolefin and polystyrene producers to increase prices and in many cases ‘recover eroded margins’, there is now increasing evidence that more normal fundamentals are starting to apply to at least PP and PE pricing. It appears that particularly in the case of PP, producers may be willing to sacrifice margin for volume via market share.
For many, the rapid approach of the summer months signals a period during which converter volumes fall as seasonal holidays typically reduce consumption. Although this is also typically a period when polymer production plants undergo routine maintenance. Often, the net effect is more or less a balance, which is the likely scenario based on present demand. So current expectations are for slight easing in supply and a gradual further softening in terms of price, albeit with the potential compensation of increasing oil prices (as further recovery to a $60 – $70 per barrel is anticipated).
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