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European polymer prices hit record highs this week and are expected to continue rising
.
LDPE, polypropylene, polystyrene and ABS prices rise
LDPE, polypropylene, polystyrene and ABS prices riseAccording to data from S&P Global Platts, the spot price of low-density polyethylene in Europe has climbed to 1,760 euros / ton, an increase of 81% compared with the 900 euros / ton of LDPE FD NWE on November 9 last year
.
The pressure of rising raw material costs, especially the 501-euro rise in styrene contract prices in March, led to further gains in the European ABS spot market
.
On March 3, the spot price of FD NWE was assessed at 2,575 euros/ton, up 235 euros this week, the highest level since Platts began assessing ABS
.
A polyethylene producer said it had to reassess its original plan to raise prices from €250/t to €300/t in March given the current level of demand, and said it was now ready to start at €300/t due to supply shortages.
March orders close the first week of the month
.
Industry insiders in the resin trade say that in the current tight market, buyers need to act fast - if a customer does not place an order at the first offer, it is unlikely to get a second chance to buy without any contractual commitment.
One may not see any spot trading volume
.
"We have achieved more than 90% of our sales target and we had to cut tens of thousands of tons from our original demand order
.
Taken together, all of this will affect the economic viability of some plastics processing plants that have been grappling with changing demand patterns since the Covid-19 lockdown
.
Limited credit line
Limited credit lineRising prices have made it difficult for some plastics processors to trade because high prices mean they have limited access to credit at the risk of potential price volatility
.
That means processors are likely to have to cut or stop production altogether
.
A polymer processor noted that purchasing power is more constrained due to tight credit lines
.
He cited the original credit line of 300,000 euros.
Due to fluctuations in raw material prices, the credit manager will reduce the line by about 50%
.
“Many factories have stopped supplying empty containers and we have doubled our freight volumes
.
We have to deal with these things by the end of June
.
Expect more offers in the market in July, followed by prices in September A sharp drop
," said a plastics processor
.
.
" said a plastics processor
.
Price correction expected by the end of this year
Expected price correction by the end of this year Expected price correction by the end of this yearSome traders believe that this is only part of the fluctuation of resin prices, and the price is expected to be out of control in the future, which will bring more problems to processors
.
It is also expected that this wave of price increases will not occur until the United States resumes resin exports before the new crown epidemic, or until the end of this year
.
.
It is also expected that this wave of price increases will not occur until the United States resumes resin exports before the new crown epidemic, or until the end of this year
.
"However, the latest forecast shows that the freight situation will only improve in the fourth quarter, as it will take too much time for all empty containers to be evenly distributed around the world again,
" the trader said
.
" the trader said
.
Affected by the new crown epidemic, large-scale chemical production facilities in Europe have been shut down for maintenance, and the start-up time has been delayed, which will further exacerbate the shortage of resin supply
.
.
Renato Zelcher, president of EuPC, the trade body for European plastics processors, said: "There are around 50,000 small and medium-sized plastics processors in Europe, and if this continues, more and more companies will have to reduce production, which will lead to a shortage of plastic products, such as parts for food packaging, construction or the automotive industry
.
”
.
”
