Polymer prices - May demand falls short of expectations, in many cases even below April's
On the other hand, demand from their customers is also weaker than usual, so they are cautious about buying because of the uncertain demand. Thirdly, the very cheap-looking import offers coming in in June and July are pushing converters' expectations towards lower prices. Nevertheless, the price decline continued last week, but it was small and unlikely to continue until June.
The price cuts are counteracted by the fact that feedstock prices continued to rise last week. The price of NAPHTHA is up nearly 3% compared to the beginning of the month. The weakening of the euro in May against the dollar makes imports more expensive. In addition, due to the deterioration of the United States' debt rating, exchange rate uncertainty is increasing significantly, making import prices unpredictable. Traders are also trying to reduce their risk and pass on the exchange rate risk due to long delivery times to buyers in the case of Far Eastern polymers. Therefore, a significant amount of imports come mainly from the nearby regions of Egypt and Central Asia. Due to low polymer prices and high production costs, more and more global polymer manufacturers are communicating that they will temporarily or permanently shut down some of their European factories. It is likely that more announcements will be made during the summer period. Outages also mean deteriorating security of supply and prevent prices from falling significantly during the summer period. We are seeing and will see triple-digit polyolefin prices for PPH Raffia and BOPP as well as HDPE BM in the second half of May. Due to rising feedstock prices, a smaller olefin monomer price increase of 20-30 euros and a slow turnaround in polyolefin prices are expected. As a result, triple-digit polyolefin prices could rise back above €1,000. Especially if the euro continues to weaken.
