Season opening with price drop
As we reported earlier, with the expectation of the 3rd week of August there was a strong demand on the polymer market. In case of certain materials rather a slight shortage and no oversupply characterized the market. First of all in case of 0.3 LDPE grades, MDPE and HDPE film grades. All this is due to the 2 weeks of shutdown at TVK and to the one month’s shutdown of HIP-Petrohemija. All in all there was a slight price erosion in the second half of the month, following the price trend of WE. Local producers enjoyed the increasing bargaining power resulting from the shortage, and the increasing margins as well. The situation did not change much by the end of the month either, the polymer stocks of producers are very low, it will not be a problem to sell them in September either. There is even a shortage of LDPE. The price decrease is a constraint imposed by monomer prices, however local producers will decrease polymer prices to an extent lower than the decrease of monomer prices. According to the preliminary opinion of producers they plan to decrease prices by 10-30 € only (now regional prices seem to be higher than those in Europe) the real price movement is not yet know, much will depend on the steps of competitors and on the demand to be expected in September as well.
Plastic converters will probably try to keep waiting. This is a good strategy and will probably also be successful in terms of prices, but they are aware of the risk that because of waiting for too long (longer than 1 week) they may need to buy cheaper alternative grades instead of their usual grades. To boot, it is not yet known, what kind of a season WE will be facing, will be there sufficient goods to satisfy potential demand in the East, or not?
The situation is highly liquid, nothing is sure but the constraint to reduce prices, the extent of the price drop will be obvious during the next days, depending on the available goods and the demand.
Now there are the following expectations on the market:
HDPE -15-25 €/tonnes
LDPE -10-20 €/tonnes
PPH -10-25 €/tonnes
PPC -5-25 €/tonnes
PPR -10-20 €/tonnes
However, remember, in the first round the producers and then the market will decide.
Download Excel report on Polymer Prices
László Budy
Managing Director
[email protected]
Mobil: +36-70-368-5140
Tel/Fax: +36-46-781-645
