Polymer Prices Continue to Skyrocket as Demand Continues to Outstrip Supply.
As outlined in all three sector graphs that appear in this publication, the rate of price increase for polyolefins, styrenic polymers and engineering polymers is significantly greater than for their respective raw material and energy cost inputs.
This situation clearly illustrates that the demand for polymers is outstripping supply by a very significant margin. For now, the prices of most polymers have become disassociated from input costs – instead it is purely the market demand for polymers that is driving prices hard and fast.
March saw SM fall by €126/T as demand in China collapsed due to Coronavirus, and PS prices followed the slump. Supply was high as some producers attempted to clear inventory. Demand held as converters some started to replenish stocks, while others held back as further reductions showed on the horizon, or to avoid tying up capital.April delivered unprecedented SM falls of €315/T, caused by crashing oil prices and Covid-19 measures destroying demand. PS has not followed this reduction all the way, but supply is low, and producers are more likely to mothball PS plants than run at a loss. Demand has stalled in most areas except food packaging. If we do see a strong reduction in supply, this could push prices back up to pre-virus levels quickly.