Price increase after all?

The most important event of the week is that all polymer plants of TVK shut down for maintenance. Thus in the region in the second half of the month a relative feedstock shortage of polyolefin is to be anticipated. The shortage is palpable also on the spot markets, there is no available product quantity. At the present, due to the holidays there is no panic yet, buyers are not yet aware of the fact that the purchasing possibilities in August are no longer available. Next time plastic converters can place orders in September. Those seem to have made a good decision who accepted the roll-over, as after the 20th prices can start increasing slightly.

What is in the background of the increase? First of all the mood on the market, the relative shortage makes buyers more apt to immediately accept a smaller price increase, and what is more, in the present situation even a higher price increase of 20-30 or even 40 € is possible. An in the meantime the correction of the August prices could start as well.

Also the regional producers who produce continuously without shutdown (Unipetrol) see this situation, as at the beginning of the week they unofficially suspended the receipt and confirmation of orders. This is also understandable, as with such a favorable demand it would be pity to sell goods cheaply.

Unfortunately neither West-European producers nor spot traders are in position to react quickly and to make use of the market niche. In this way local plastic converters can rely only on local producers, goods.

Now as there seems to be a sharp separation between the West- and Eastern-European price tendencies, while according to the news price decrease dominated the WE market because of the low demand, and in CE the price decrease was only highly partial, but rather the roll-over was typical, however the demand was strong. The strong demand is expected to last until the end of the month.

The news from overseas that both in case of ethylene and propylene market players expect price increase, increase the probability of the price increase in September. Slowly WE returns from holiday and will start thinking about the autumn and winter orders. These orders shall at any rate mean an increasing demand compared to the summer.

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László Budy
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