Polymer prices - Extensive price, demand and supply uncertainty
The decline in European feedstock prices, coupled with the continued strengthening of the dollar, is generating expectations of polymer price cuts in April. A significant number of converters bought less in March than originally planned. They prefer to consume their stocks and wait until April, hoping for a price drop. Price uncertainty is increased by the growing risk of a tariff war between Europe and the United States, which would lead to significant price increases for certain import grades.
Since the beginning of March, NAPHTHA prices have decreased by more than 8%, which is likely to generate a similar price decrease for olefin monomers. Based on current price trends, a decrease of up to 70-100 euros in olefin monomer prices is expected. It should be stressed, however, that there are still 2 weeks to go until the end of the month and feedstock prices can change rapidly. For styrene monomer, price expectations for April vary widely between -40-+40 €/ton, with most expecting a slight price decrease. Falling monomer prices also mean falling polymer prices.
However, the beginning of April could have a significant impact on polyethylene prices in other ways as well; the ongoing trade dispute between the United States and the European Union has raised the risk that a 25% tariff on polymers from the United States will be effectively imposed from April 1. This would primarily affect polyethylene grades among the polymers we reported. For LLDPEs, this would also mean a significant price increase and temporarily significantly reduce the availability of LDPE and HDPE. Even if higher tariffs do not come into force, there could still be a shortage of supply and a price rise for the cheapest prices, as traders are not buying now because of the high risk. Polyethylene availability could be further restricted if sanctions imposed on the Serbian polyethylene producer actually come into effect at the end of March after the grace period expires.
Plastic converters are uncertain and prefer to wait and see. April is probably the least risky month, with the Easter holidays usually reducing demand so they expect to buy as much feedstock as they need from European sources. Due to this, there is a significant risk that if actual spring demand starts, there may be temporary shortages in polyethylene supply lasting 2-3 weeks.
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