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For the Quarter Ending March 2024

North America

The Polyolefin Elastomer (POE) market in North America a marginal surge in the first quarter of 2024. The construction and automobile sectors maintained moderate to high demand, contributing to a consistent market performance. 

Market prices remained relatively steady, thanks to a well-balanced supply and demand dynamic and unchanged market sentiment. Suppliers reduced interest in inventory accumulation also played a role in maintaining stability. There were no reports of plant shutdowns during this period, ensuring a continuous supply of POE. It is important to note that the USA experienced more significant price fluctuations compared to other North American countries. 

However, despite these fluctuations, prices remained relatively stable throughout the quarter, with a slight 1.14% increase in the Q1 2024 from Q4 2023. The latest price of Polyolefin Elastomer octene-Based FOB New Orleans in the USA for Q1 2024 stood at USD 2998/MT. Overall, this price reflection of POE prices in North America during this quarter can be attributed to the balanced supply and demand dynamics and the supplier's reduced inventory accumulation.

APAC

During the first quarter of 2024, the Polyolefin Elastomer (POE) market in the Asia-Pacific region experienced a marginal incline in the price. This incline is majorly attributed to the increase in the demand from the downstream Automobile, Construction, Packaging sector in the asian market.

This situation resulted in a moderate supply scenario, allowing buyers to have more options and potentially negotiate better prices. However, despite these market conditions, no plant shutdowns were reported during this period, ensuring a stable supply of POE. Among the countries in the Asia-Pacific region, Japan witnessed significant changes in POE prices.

The decline in new car sales and weakening factory activity influenced the demand for POE in Japan. However, despite challenges in the automobile sector, there was a positive correlation between the increase in the Consumer Price Index (CPI) and the demand for various goods, including POE. In terms of price trends, the quarter ending price for POE Butene Based CFR Tokyo in Japan was USD 2905/MT. This price point reflected the market dynamics and the unique factors that affected the POE market in the Asia-Pacific region.

Europe

During the first quarter of 2024, the Polyolefin Elastomer (POE) market in Europe encountered various obstacles and market dynamics. The supply of POE remained moderate, indicating a balanced inventory availability. However, the demand for POE remained moderate to lower side from sectors such as Automotive, while the Construction sectors underperformed. Additionally, the global economic slowdown, highlighted by Germany's worst GDP contraction, further impacted the demand for POE in the European market.

The market situation overall remained stable, with moderate supply and low demand. Although no plant shutdowns were reported, suppliers were involved in destocking inventories. Nevertheless, there were some disruptions reported in the market.

Currently, the price of Polyolefin Elastomer Butene Based FD Hamburg in Germany for the first quarter of 2024 stands at USD 2714/MT marking a decrement of 1.23% from Q4 2023. Overall, the POE market in Europe during the first quarter of 2024 faced challenges including moderate supply, low demand from the downstream market like Automobile, Construction, Packaging, and other industrial sectors.

For the Quarter Ending December 2023

North America

Polyolefin Elastomer (POE) prices in North America experienced a decline in the current quarter (Q4) of 2023 (Oct to Dec), primarily due to several factors. Firstly, the ongoing strikes organized by the United Auto Workers (UAW) union negatively impacted the downstream automotive industry, leading to a decline in demand for Polyolefin Elastomer.

Secondly, the new guidelines presented by the EU to reduce deforestation caused uncertainty in the rubber futures market and its synthetic counterparts, including Polyolefin Elastomer. Thirdly, increased energy consumption during winter in the region drove up energy costs, resulting in increased production costs for Polyolefin Elastomer.

The last year's same quarter price change was -12%, while the quarter-on-quarter percentage change was also -12%. The price percentage comparison between the first and second half of the quarter in the USA was -5%. The latest/quarter ending price of Polyolefin Elastomer Butene-Based FOB New Orleans in the USA in Q4 2023 was USD 2744/MT marking a decline of 4.55 %.

APAC

In the fourth quarter of 2023, the Polyolefin Elastomer (POE) market in the APAC region underwent significant price dynamics influenced by various factors. Primarily, a bearish trend outlook prevailed across the market in the respective region, resulting in price declines for Polyolefin Elastomer in countries like Taiwan, South Korea, Singapore, India, China, and Thailand.

This trend was characterized by manufacturers and traders destocking their inventories, prioritizing stock clearance even at the expense of profit margins. Notably, the Chinese market experienced a substantial plunge in Polyolefin Elastomer prices, while Thailand also witnessed a significant decrease in offers for Polyolefin Elastomers.

Despite the outperformance in the downstream Automobile and Construction sector market in the regional markets, the overall theme for APAC's Polyolefin Elastomer market in Fourth Quarter 2023 was a bearish outlook, leading to widespread price decreases. The latest reported price for Polyolefin Elastomer (POE) Butene Based CFR – Tokyo in Japan, in Fourth quarter concluded at USD 2840/MT, indicating a notable decline of 7.74 %. 

Europe

In the fourth quarter of 2023, the Polyolefin Elastomer (POE) market in Europe faced a bearish trend characterized by moderate supply levels and diminished demand from key sectors like construction and automotive.

Germany, a prominent player in the European market, experienced significant price changes, witnessing a decline of 1.4% compared to the previous quarter and an even more substantial -11% change compared to the same quarter in the previous year. The downturn in demand from the construction industry, as predicted by economists, contributed to this decline. Despite the challenges, there is anticipation for an upswing in demand during the festive season and the beginning of the new year, potentially boosting consumer buying interest in Polyolefin Elastomer.

However, the overall economic scenario, as reflected in Germany's PMI data, indicated a drag on business activity in the broader Euro area. German construction activity faced continued challenges in 2023, driven by market uncertainty and high interest rates. The latest reported price for Polyolefin Elastomer Butene Based FD Hamburg in Germany for Q4 of 2023 stands at USD 2748/MT, reflecting a decline of 2.03%.

For the Quarter Ending September 2023

North America

The North American market witnessed mixed sentiments in the Polyolefin Elastomer (POE) pricing trend during quarter 3 of 2023. The prices showcased a notable surge in July, followed by a significant plunge in August, only to get stabilized in September. The US market price of Polyolefin Elastomers (POE) increased in July due to strong demand sentiments. In the US market, vehicle sales increased by over 20% in the month of June, while Western Europe sales also increased by around 19.6% in the same month, boosting the demand for POE significantly. As a result, POE's procurement increased during July. However, contrary to the first month, the cost of POE witnessed a decrease in the USA market during August. This decline was mainly influenced by a drop in the prices of essential raw materials. The prices of feedstock Ethylene experienced a significant downturn throughout the preceding month of July. As a result, the production costs associated with Polyolefin Elastomer decreased, leading to a noteworthy reduction in its market value. Furthermore, In September, the POE remained stable in the US, as they were influenced by conflicting demand trends within domestic and international downstream industries. The strong demand from the domestic automotive and construction sectors was balanced out by a lack of demand from their European counterparts. Despite a strike initiated by the United Auto Workers (UAW) union against the Detroit Three automakers in the middle of the month, the US car industry performed well, with 1.33 million new vehicles sold in September. In contrast, Germany experienced a significant decrease in electric vehicle sales in September, primarily due to the discontinuation of government subsidies, which cast a shadow over the broader automobile market in Europe's largest economy. 

APAC

The Asia-Pacific (APAC) region experienced a consistent reduction in Polyolefin Elastomer (POE) prices during the third quarter of 2023. The Asian new vehicle market witnessed significant growth in the third quarter of 2023. This favorable development can be attributed to the gradual recovery from the impact of Covid-19 lockdowns, which began easing in the latter part of the previous year. Furthermore, the improved availability of semiconductors enabled automotive manufacturers to increase production and reduce order backlogs. However, despite robust demand from the downstream automotive industry, the prices of POE continued to decline in the Asian market. This decline can be attributed to a combination of factors, including a simultaneous decrease in the prices of essential feedstock, Fluorspar, and increased competition within the market. These factors have interacted to reshape the pricing dynamics within the POE sector fundamentally. The decline in Fluorspar prices, a crucial component in the production of POEs, has directly impacted the overall manufacturing costs. This has necessitated a downward adjustment in the pricing of the final products. Additionally, the heightened level of competition in the market has compelled manufacturers to strategically reposition their products, resulting in a broader reduction in prices aimed at maintaining competitiveness in the industry.

Europe

The costs of Polyolefin Elastomer remained quite stable in the European market during the first month of the third quarter. However, in the last two months, they steadily decreased. The steady raw material prices played a vital role in supporting the POE market initially. Additionally, the performance of the automotive industry showcased steady growth in the European market. This consistent demand and production in the automotive sector were key factors in keeping the POE market value stable. Nonetheless, the price drop in the last two months was a result of a significant reduction in production costs, primarily due to the extended decrease in the price of the raw material, Ethylene. The declining raw material costs had a direct impact on the final pricing of POE, leading to a continuous downward trend in its market price. As a result, despite positive developments in the automotive sector, the European POE market continued to be affected by ongoing cost dynamics driven by the weakening prices of raw materials. 

For the Quarter Ending June 2023

North America

In the 2nd Quarter of 2023, the Polyolefin Elastomer (POE) pricing trend showed mixed sentiment in the North American market. After a sharp surge in April, POE prices decreased steadily for the next two months. In the USA market, POE prices showed a bullish trend in April 2023, supported by improved buying sentiment among end users. In the domestic market, there was an increase in demand from the automotive industry from both domestic and foreign markets. In addition, the ports of Long Beach and Los Angeles faced a labor shortage and dockworkers' strike, which shut down the ports and restricted the supply in the domestic market. In the last two months of the 2nd Quarter, POE prices in the domestic market remained subdued. The operating rates of the downstream automotive industries remained moderate while the demand support of POE remained average. The supply chain pressure eased, and there was an active flow of goods. The market was also dealing with abundant inventories, which contributed to the decrease in the POE prices.

APAC

In Asia-Pacific, Polyolefin Elastomer prices rose steadily in the second quarter of 2023. Prices rose sharply during the quarter, with the most noticeable improvement seen early in the quarter. Increased downstream demand pushed Polyolefin Elastomer prices higher in April. Demand for automobiles increased during the month, surging demand for polyolefin elastomers. The use of polyolefin elastomers also increased significantly in May due to growth in the pharmaceutical and packaging industries. The significant growth in these areas has increased the demand for polyolefin elastomers and increased their market value. In June, once again, the prices of Polyolefin Elastomers in Asia rose significantly due to increased demand in domestic and overseas markets. Furthermore, in June, the overwhelming market performance of the Asian auto industry this week has led to a surge in POE consumption in the global market, followed by an increase in market demand and an increase in its value. However, Singapore's Purchasing Managers Index (PMI) has recently hovered above 50, suggesting that the country's growing industrial activity is somehow stabilizing the market and reducing excessive volatility. 

Europe

In Europe, the price of Polyolefin Elastomer followed a mixed pattern. Initially, prices rose in Spain due to an increase in global demand but decreased significantly in the last month of the quarter. The Spanish market saw an increase in Polyolefin Elastomer prices in the first two months of the quarter, driven by improved offtake and stable supply. Domestic operating rates improved, reflecting an increase in consumption from both domestic and international markets, as well as an increase in demand from the automotive industries. Additionally, market participants reported a sharp increase in inquiries from end-users, which further influenced the market trend of Polyolefin Elastomers. Reports suggest that the prices of raw materials, particularly Ethylene, decreased significantly in Europe, resulting in a significant decrease in the production costs for Polyolefin Elastomer, thus decreasing the market value of the material. Furthermore, in May, new order inflows decreased significantly, the sharpest decrease in the last six months. All these factors contributed to the decrease in Polyolefin Elastomer prices.

For the Quarter Ending March 2023

North America

Prices of Polyolefin Elastomer (POE) have continued to drop in the USA market during the first quarter of 2023 owing to sluggish buying sentiments and ample material availability in the market. Overall, POE demand from the automotive and construction industries has been weak, and there were limited instances of new orders inquired by the end-users, which resulted in bearish pricing sentiment in the domestic market. The sluggishness in the market can also be observed in the below-par performance of the manufacturing industry in the US market. In addition, operating rates have been stable in the US market, resulting in ample inventory levels in the domestic market as well as in the ports. Moreover, market participants reported that the latest banking crisis in the USA has further deteriorated the market growth of many commodities, including POE. Thus, prices of POE Octene-based FOB New Orleans were settled at USD 3403/MT with a month-on-month decrement of 3.5% during March 2023.

Asia- Pacific

Polyolefin Elastomer (POE) has witnessed a downward trend in China during the first quarter of 2023 on account of a sluggish buying trend among the end-users. Market participants reported that the automotive industry, which was trying to revive in Asia- Pacific, soon started showcasing a downfall as the destocking of the automotive inventories started in China; thus, the demand for POE dropped in the domestic market. In addition, operating rates have remained stable in China market while the steady imports from neighboring South Korea and Singapore have led to ample material available on the Chinese ports or shores. The surplus inventories of the product and slowdown in downstream demand have encouraged the manufacturer to revise their negative price quotation. Consequently, prices of POE Octene-based CFR Shanghai were settled at USD 3123/MT during March 2023.

Europe

Polyolefin Elastomer (POE) prices have decreased in the European market throughout the first quarter of 2023 due to dull buying sentiments and ample supplies in the region. POE imports from Asia improved on European shores as the freight charges deteriorated sharply. In addition, upstream natural gas prices stabilized amid plenty of availability in the European market which softened the production cost of several commodities, including POE. In addition, due to high-interest rates and inflation, the demand for POE from the construction and automotive industry was subdued. There were no new orders from end-use industries, so the product ended up in stock. In addition, the market perceived a wait-and-see attitude. Furthermore, Germany, Europe’s largest car producer, and consumer, recorded a decline in growth of 2.6% during February, as reported by market participants. Thus, in Germany, prices of POE Octene-based FD Hamburg were assessed at USD 3249/MT during March 2023.

For the Quarter Ending December 2022

North America

The prices of Polyolefin Elastomer assorted in the North American market throughout the fourth quarter of 2022. Fluctuating demand from the automotive industry and for films and sheets from the agriculture sector pulled back the prices of Polyolefin Elastomers within the regional market. The product inventories were varying with the traders and the suppliers due to changing consumption patterns affecting the market sentiments. The energy and production costs eased during the quarter, impacting the prices of Polyolefin Elastomer. The area's supply chain was sufficient due to the considerable number of shipments witnessed in the market during that time, which led to higher product availability.

Asia

The product's low-price trend in the Asian market was driven by good demand, less supply, and weakening spot prices abroad during the fourth quarter of 2022. The traders have noticed increased margin deterioration as well. The area's supply chain was sufficient due to the considerable number of shipments witnessed in the market during that time, which led to higher product availability. The product's price was decreased from the pressure of weakening costs and the product's plummeting demand from downstream automotive. Due to lower marginal costs from exporting nations like South Korea and Thailand, a price decrease followed. The Asia Pacific region's fall in freight costs also influenced the exports to the international market. 

Europe

Producers of Polyolefin Elastomers continue to struggle to gain orders in the European market via share shifting rather than simply slow production to rebalance demand, further decreasing the price margins. The feedstock cost fluctuated throughout the fourth quarter of 2022, further disrupting production rates. Suppliers and traders could maintain volatile inventories of Polyolefin Elastomers in the market. As demand from the downstream market fluctuated, traders and suppliers witnessed a change in their stock. Prices also rose due to fluctuations in the prices of feedstocks (Ethylene), and consumption levels remained high. There was a further expansion in Polyolefin Elastomer production rates and a variation in demand for the product.

For the Quarter Ending September 2022

North America

The POE prices were decreasing in the North American market during the third quarter of 2022, with prices ranging at USD 3729/ton POE Octene-based FOB New Orleans in July. As a result of robust volume intakes in the automotive and related industries, demand dynamics have been stable in the middle of the quarter. Consumption of POE has been regular to maintain the firm volume of offtakes. Ample inventory levels in the regional market have stabilized ethylene prices upstream. The demand was less than the supply, and some consumers could not obtain as much as they liked at that price as supply was rationed. The inventories were steady in the market, and stockpiling was less. 

Asia

The prices of POE were observed to be see-saw steadily in the Asian market during the third quarter of 2022, with cost ranging at USD 3397/ton CFR Shanghai. Snug demand dynamics at the beginning of the quarter altered the trading sentiments, and the market participants were prompted to increase the prices for available material in the regional market. The Chinese market’s cost of manufacturing decreased at the end of the quarter, which led market participants to observe a large decrease in the pricing quotation. Although the volume intakes from the downstream healthcare business have been stable, keeping the consumption rate steady. 

Europe

During Q3 2022, the prices of POE were increasing in the European region, with prices ranging at USD 3193/ton POE Octene-based FOB Hamburg during August in Germany. Furthermore, on the upstream, Against a feared recession, the fragile terminal market significantly pressurized the price value chain of POE among market players. The consumption of the product was increasing by the end of the quarter in the region, affecting the trading sentiments. Furthermore, on the upstream price front, the tumbling values of monomer Ethylene have also prompted negative cost pressure on the price realizations of Polyolefin Elastomers, inciting the domestic market to remain within a range.

For the Quarter Ending June 2022

North America

During the second quarter of 2022, Polyolefins Elastomer prices have gained consistently and were assessed at USD 3410 per MT on FOB after June 2022 for the Extrusion Moulding grade. Polyolefin Elastomer prices rose on the back of soaring energy prices, persistently rising feedstock prices, and climbing cost of production. Meanwhile, inventory levels remained snug as the production levels dropped due to rampant production costs. The automotive industry has improved consumption rates this quarter; however, production levels may hit a roadblock as the speculations around a US recession intensify. In Q2 2022, Extrusion Moulding POE prices rose by more than 10% quarterly.

APAC

In South Korea, Polyolefins Elastomer prices remained on a bullish rally throughout the second quarter owing to increased cost pressure from upstream feedstocks, deteriorating logistics, and the rampant energy market. Olefins prices soared in the early part of the quarter on the back of resurgent upstream Naphtha and crude oil prices. Naphtha prices broke charts in the APAC region, and downstream producers had limited space to contain the soaring prices; therefore, several producers opted for the price increase. Dow increased the prices of all grades of POE by USD 300 per MT in the Asia-Pacific region. A key importer of Polyolefins Elastomer from South Korea has been China. After a stable start to the quarter, demand dynamics in China plunged drastically owing to increased covid cases, which resulted in citywide lockdowns causing consumption levels to subside dramatically. 

Europe

The Polyolefins Elastomer market followed the market trend of other elastomers and petrochemicals, where prices remained on a consistent bullish rally throughout Q2, showing some signs of stabilization in only the later stages of the second quarter. Feedstock Olefins prices went haywire in the key European markets, including German, UK, French, and others, increasing cost pressure over the domestically material produced. While the prices of the imported material also remained high given the high global inflation rate in the elastomer market. 

For the Quarter Ending March 2022

North America

Polyolefin Elastomer (POE) market observed another round of price increases owing to continued volatility in energy feedstock prices, globally. On the demand side, consumption of POE has been stable to firm keeping volume offtakes on the stronger side. Supply chains have strengthened since the beginning of the year, which has eased supply fundamentals after volatile 2021. Feedstock ethylene prices have been stable in the regional market as ample inventory levels continue to stabilize the market. As of March 2022, POE prices were assessed at USD 2894 per MT on FOB basis for Extrusion moulding grade POE. Dow Chemical Company, a key producer in the region, continued to face inflationary pressure from rising upstream costs, which prompted them for increased prices for available POE.

Europe

Soaring feedstock prices put inflationary pressure on all key commodities in the European market, including petrochemicals. Olefins prices climbed substantially in the wake of volatility in upstream crude oil and LNG prices. The sudden significant rise in olefins has been translated into strong cost pressure on Polyolefin elastomers. Meanwhile, imported POE from Asia remained costly as freight charges increased in the backdrop of rising speculations in the Black Sea region and a resurgence in covid cases in China, which altered normal port and trading activities. Shipping charges got further exacerbated as transit fees on Suez Canal also rose significantly. Hence, after the conclusion of Q1, Polyolefin Elastomer prices were assessed at USD 2610 per MT on FD basis for Butene based POE.

Asia Pacific

In China, the POE market has improved since the conclusion of the spring season holidays. Market has been optimistic, gaining from increased inflationary pressure and cost pressure. Demand for POE has risen as consumption levels have again become robust, which plunged in the first week of February. Meanwhile, upstream olefin cost has been firm as crude oil values continue to climb globally, and refiners have been forced to keep the prices of olefins and aromatics on the uptrend. Production has been optimum in Far East Asia as no scheduled maintenance has been announced yet, and Q1 has rarely been employed for plant maintenance purposes. This has ensured ample availability of the material in China ports; Ningbo port has observed improved mobility; however, Shanghai port continues to face congestion issues. As of March 2022, POE prices are assessed at USD 2815 per MT on CFR basis for Octene based POE. Indian domestic market also witnessed a similar market trend where POE prices gained consistently throughout the first quarter on the back of robust import prices. Far East Asia and Southeast Asia are among the key exporters of POE to India.

For Quarter Ending December 2021

North America

In Q4 2021, the POE market in North America witnessed a massive demand in the region which resulted in the extensive surge in its prices. The cost of POE in the US market rose to USD 3171/ton. After a few weather-related disruptions in September 2021, the supply of POE resumed with industries increasing the production rates to cater to the demand. However, overall output has not been enough to alter the uprising trend of POE prices during the final quarter of 2021. The constant rise in the energy feedstocks and their derivatives also contributed to the increasing price trend of POE in America during the last quarter of 2021.

APAC

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Indian POE market surged during Nov 2021 due to the festive season, increasing the demand from the downstream automotive industry. The price of POE was recorded near USD 4000/MT. The prices started to decrease in the last month of Q4 due to the surging production rate in other Asian countries like South Korea. The price dropped to USD 3606/MT in December because of the limited production from India's automotive sector. The Chinese market witnessed a steady price rise despite the increase in production rates from importing countries like South Korea. The price trend was upward due to rationing and dual control norms imposed by the Chinese authorities in the final quarter of 2021. The price trend of POE in the Korean market during Q4 2021 was very similar to the Indian market, where the prices rose till November because of downstream footwear industries trying to restock before peak season, followed by its drop-in December when the production of POE increased in the country.

Europe

The price trend for POE in the European Market during the fourth quarter has been declining due to deterred performance of its downstream automobile sector in Europe. The downward movement of upstream Ethylene prices also affected the price trend of POE prices. New passenger vehicle registrations in Europe contracted by 22% in December 2021, which affected the downstream automotive industry and impacted the prices of POE. Weak market sentiments and sufficient product availability slip the price of POE in the regional market. Since POE is largely used as Interior materials in Vehicles, the low demand due to the poor performance of the downstream automotive industry led to ample POE stock. 

For the Quarter Ending September 2021

North America

The upward trend in prices of POE continued in the third quarter as well across the North American region owing to the recovery in the global demand. The demand for several grades of POE had been rising in Q3 against the backdrop of renewed demand from the downstream automotive industry. Global POE supplies were seen normalising after a US-based producer returned online after disruption in operations at its Louisiana Operations due to weather related challenges early in September. The prices of injection molding POE and extrusion molding POE were assessed at 3040 USD/MT FOB New Orleans and 2660 USD/MT FOB New Orleans respectively, as of 8th October.

Asia Pacific

The prices of Polyolefin Elastomer (POE) witnessed a steep rise in the Asia Pacific region during Q3 of 2021. The supply outlook observed an improvement across the region in Q3 due to the increased demand for POE from the downstream industries. In India, POE prices remained buoyant in the first half of the quarter backed by firm offtakes from the domestic market. In September, South Korea’s POE pricing showed limited fluctuations under stable demand trends and lack of purchasing activities from the downstream buyers. Rising crude and surging raw material prices continued to affect the producer’s margins. POE Octene-based FOB Seoul price was assessed at $2300/mt while POE Butene-based assessments were settled around $2510/mt during the week ending 24th September. Leading Korean producer LG Chem Ltd announced on Thursday (19th Aug.) that it will invest around USD 2.2 billion into its PBAT and POE capacities in South Korea which will be commissioned by 2028.

Europe

During the third quarter of 2021, the pricing trend of Polyolefin Elastomers (POE) demonstrated an upward trajectory in the European region. The demand remained firm during the third week of September, as market sentiments ramped up after automotive manufactures increased their production to cater to the demand. Due to prolonged production disruptions from carmakers, it is expected that demand will remain under pressure from the automotive sector while the electronic sector will continue to keep market prospects firm in the fourth quarter.

For the Quarter Ending June 2021

North America

US Polyolefin Elastomer (POE) suppliers reported constrained inventory levels even in Q2 that maintained somewhat firmer pricing in June. Manufacturers reported inventory build-ups until later this year and delay in customer orders which could not be met in Q1 due to weather related disruptions in Q1 and early Q2. FOB Orleans POE Injection Moulding rates showed gains to settle at $2195/mt while Injection Moulding grade was assessed at $2540/mt in June. Leading manufacturer Dow announced idling of its three PE and two elastomers production units in the Americas for at least 30 days at the start of May to cap the inventory gains when the demand is slow due to the pandemic. There was sharp pick-up in demand for grades used in automotive parts and upside in construction and infrastructure as well. Strong pricing somewhat reduced the amount of POE exported out of the US with market players keenly observing the reoccurrences of COVID pandemic across various regions of the world.

Asia Pacific

During the second quarter of 2021, POE supplies in the Asia pacific region were limited due to lesser imports with some supply lags reported as China’s Guangdong port was closed due to the rising COVID cases towards the end of Q2. Some Chinese producers reported due to the power outages. In India the market activities were subdued amidst the resurgence of the second COVID wave which restricted the public movement and economic slowdown. Ex-Works prices for Butene-based POE in India oscillated around USD 2453 per tonne in June. Overall, the Asian Polyolefin Elastomer demand was healthy, with major enquiries concentrated over the automotive and construction sector in the second quarter.   

Europe

Polyolefin Elastomer supplies in the European region were improved but the overall market outlook remained pressured for a larger part of the second quarter due to limited availability of feedstock and curtailed production margins due to upstream cost pressure. Whereas, the demand surged, amidst the constant offtakes from the automotive and construction sector. The supply demand gap widened, as a repercussion the pricing trend of almost all POE grades was well supported throughout the second quarter of 2021.  

For the Quarter Ending March 2021

North America

Polyolefin Elastomers market in the North American region was severely impacted by the seasonal storms which caused power outages and forced shutdowns at several manufacturing plants in the USA Gulf region due to sub-freezing conditions, eventually leading to global material shortage. Regional offers were corrected positively after several polyolefin manufacturers such as Dow Chemicals and Equistar Chemicals announced hike in the prices of almost all polyolefins. A leading POE manufacturer raised POE offers by USD 150 per Mt w.e.f. Feb. 2021 due to soaring transportation, energy and raw material prices. Demand however surged after better offtakes were reported from the automotive and construction sector.

Asia-Pacific (APAC)

POE supplies were stable during the first quarter of 2021 as the addition of new upstream olefin cracker kept the feedstock availability balanced. However, some constraints were witnessed after the Chinese Lunar New Year holidays as some plants in China went for a maintenance turnaround. Demand showed mixed results, while prices of POE fluctuated during the quarter due to the resurgence of COVID in some parts of the region. The quarterly average of POE rates in Southeast Asia was assessed around USD 2373/ton.

Europe

During the first quarter of 2021, the European POE supplies were tight, owing to limited upstream products and feedstocks availability due to sluggish operation in several plants in northwest region amid the cold weather and transport hiccups, followed by the reduced imports from the USA. However, demand witnessed an improvement as the offtakes from downstream automotive and construction sector increased amid pick up in commercial and industrial activities.

For the Quarter Ending December 2020

North America

During the fourth quarter, US faced lower automobile sales compared to 2019, although the demand improved on Q-o-Q basis due to steady recovery from the COVID-19 situation. Several automobile giants like Ford, Volkswagen, Toyota etc. faced acute shortage of semiconductor chips for the auto parts, which forced them to cut their automotive production prompting lesser POE consumption. Many companies in the US expressed interest over investing on POE based encapsulants to improve the efficiency of solar panels amid rising environmental concerns.

Asia

Majority demand of POEs was generated from the automobile sector. During the final quarter, automotive industry of the Asian countries like China, India and Korea improved significantly. The reason behind this rise was improved COVID 19 situation and festive push from October to December. China automobile industry improved steadily from Q3 and the sectoral growth remained firm in Q4 2020. This rise improved the demand of POEs that led to increase in their price. In the Indian market, Ex-depot price of butene-based POE increased from USD 2341.5 per tonne in October to USD 2367.8 per tonne in December. RenewSys India, POE encapsulant manufacturing company announced that they had increased their POE encapsulant manufacturing capacity from 1.65 GW to 3 GW during October 2020. This expansion is likely to ramp up the utilization of POE-based solar module component production capacity in the coming years.

Europe

New strain of COVID-19 during October in Europe, hit hard the European automobile sector. Sales of automobiles in Europe dropped by 7% on year-on-year basis, thereby affecting the demand of POEs across the region. The region is strongly investing in upgrading its POE-based solar encapsulant technologies with major companies coming up with latest advancements. Due to supply tightness price of POEs remained high due to high demand from automotive and elastomeric shoe soles.

Photo: Eastman

The resin pricing trend in the third quarter appears to be shaping up differently among the five-large volume commodity resins. Continued high demand and tight supply will keep prices for both PE and PP firm, at the least. In contrast, PS prices are finally heading downward as the key drivers—feedstock costs—appear to be easing up, while PVC and PET resin prices also appear to have peaked for now.

These are the views of purchasing consultants from Resin Technology, Inc. (RTi), Fort Worth, Texas, senior editors from PetroChemWire (PCW), and CEO Michael Greenberg of the Plastics Exchange.

A couple of key challenges are at play, according to these observers. One is the issue of getting resin imports that typically help in constrained supply situations. Prior to COVID 19, a finely-tuned ocean logistics system was in place, and the industry is now struggling to return to some semblance of that. For example, resin containers have been an issue—not because there is a shortage of containers, but because they have not been moving to their destinations at predictable rates. Production disruptions due to weather are another obstacle, amid what is expected to be a very active hurricane season. While resin suppliers are working to build up their inventories after major disruptions over the last year, and also is in anticipation of this season’s hurricane disruptions, industry observers say there is not much wiggle room, especially in the case of polyolefins. Thus, they advise processors to build an added buffer of resin.

Polyethylene Prices Still Rising

Polyethylene prices moved up 5¢/lb in June, and suppliers were seeking another 5¢/lb increase in July, which was expected to take effect, based on continued high demand and tight supply due to unplanned disruptions earlier in the year. This was the view early last month of Mike Burns, RTi’s v.p. of PE markets, PCW senior editor David Barry, and The Plastic Exchange’s Greenberg. If the July increase goes through, the total rise in PE prices since the start of the year would be 41¢/lb for HDPE and 43¢/lb for LL/LDPE resins.

Pointing out that allocations and sales control remained in place for most resins during June, RTi’s Burns noted that suppliers were building inventories but projected solid pricing through the third quarter, adding that another major unplanned disruption would likely be disastrous to market balance. “We will see prices drop when the 40% overcapacity—which typically would go to exports—returns.” He also ventured that demand would slow toward year’s end and projected that suppliers’ May/June inventory buildup may turn out to have been the start of a 90-day recovery. (RTi’s supply model estimates that 90 days of undisrupted production is needed to balance PE supply and demand.)

PCW’s Barry ventured that August prices could be flat. “It will become harder for suppliers to charge domestic customers much more than export prices—currently a gap of as much as 20¢ to 30¢/lb. Also, once logistics of getting containers moving and freight issues are resolved, we are likely to see more imported PE finished goods coming in.”

All sources characterized spot PE prices as generally firm, with demand exceeding supply, particularly for PE injection grades. Greenberg reported that prices of such grades had moved up 2¢ to 3¢/lb; HDPE blow molding resin was still scarce, with imports filling in part of the gap; HMW film moved up another 2¢/lb as supply tightened; while LDPE and LLDPE for film both held steady. “Although overall PE production continued to improve and upstream inventories have been replenishing, producers are still not back to normal supply positions, which was confirmed by the continued lack of spot material. At least one producer claimed to be sold out through August,” he said.
 

Polypropylene Prices Volatile

Polypropylene prices moved up a total of 12¢/lb in June—4¢ in step with propylene monomer and 8¢ for suppliers’ non-monomer-related increases. Moreover, suppliers came out with additional “margin” increases of 3-5¢/lb for July, in addition to any change in monomer prices, according to Scott Newell, RTi’s v.p. of PP markets, as well as Barry and Greenberg.

Detecting potential for another double-digit price increase in July and August, Newell noted, “Suppliers still have pricing power as things are still snug, demand is strong, and while volumes of PP imports are up, there are lots of logistical challenges to getting them into place.” PCW’s Barry noted that PP imports continued to arrive in above-average volumes, putting some buyers in a more comfortable inventory position for July. Still, he reported that import volumes continued to be restricted by a shortage of empty containers in Asia. “There were reports that the container issue was beginning to ease, but freight costs were still very high,” he noted.

Newell foresaw continued supply and pricing issues for PP in the rest of the year. He also noted the challenge of a general labor shortage, because of which some processors reported lowering production rates to 75% to 80% of capacity, with increased backlogs. Greenberg reported that spot PP trading was a bit slower. “Domestic prime was still absent from the spot market, but imported prime was available on both the East and West coasts. Overall PP prices continued to consolidate: On the top side, spot prime levels eased back a cent, while the lower end of the pricing spectrum climbed at least a nickel.” Barry reported a gradual improvement in spot availability of homopolymer and random copolymer, but continued tightness in impact copolymer due to a series of supply disruptions.
 

PS Prices Down

Polystyrene prices dropped 8¢/lb in June, the first price drop since May 2020, according to Barry and Robin Chesshier, RTi’s v.p. of PE, PS, and nylon 6 markets. Price increases implemented since May 2020 have totaled 57¢/lb, and were driven by higher prices of benzene, ethylene and styrene monomer. June saw a reversal, with benzene dropping by $1/gal, ethylene by 9¢/lb and styrene by 10¢/lb.

Barry reported that feedstock trends were pointing toward further PS price erosion in July, and that many spot buyers remained on the sidelines, opting to keep inventories as low as possible. He said the implied styrene cost based on a 30/70 ratio of ethylene/benzene had dropped to 38.4¢/lb, down 4.4¢ going into July. Chesshier noted that suppliers raised PS prices between November 2020 and May 2021 by 30% more than they incurred in raw-material costs. She anticipated PS prices would drop 9¢ to 10¢/lb in July based on July benzene contract-price nominations of $3.10 to $3.20/gal. She expected August PS prices to be flat to lower. “If benzene prices stay at the lower levels, PS processors will seek further price concessions from suppliers.” Both sources characterized demand as soft in packaging, medical and building & construction sectors.

 

PVC Prices Peak?

PVC prices moved up 1.5¢ to 3¢/lb in June, as suppliers aimed to implement a 3¢ price hike, according to Mark Kallman, RTi’s v.p. of PVC and engineering resins, and PCW senior editor Donna Todd. This deterred suppliers from issuing an increase for July, while they tried to push through the full June increase. Todd reported that July was the first month this year without a new price increase on the table.

Kallman ventured that PVC prices had now peaked, citing a drop in both ethylene prices and exports. One caveat: Chlorine prices had moved up due to unplanned production disruptions in May-June. Noting that all PVC suppliers produce both ethylene and chlorine, Todd said ethylene prices dropped a total of 13¢/lb in May and June, giving PVC suppliers feedstock cost relief on that half of the molecule. Kallman thought July would see the market stabilize with August also likely to see flat resin pricing. “We were heading for stability in the third quarter and there was hope of restoration of inventories.”
 

PET Prices Flat

PET prices appeared to be flat going into July, though suppliers were attempting to implement surcharges in the range of 2¢ to 4¢/lb. RTi’s Kallman noted that there did not appear to be any uniformity in the implementation of these surcharges and reported that prices of key feedstocks paraxylene and PTA were pretty flat through June. He ventured that PET prices had potential to move up slightly, about 0.5¢/lb, by July’s end, but could drop a bit in August, based on feedstock pricing.

Kallman characterized the market as tightly balanced and noted that most processors were getting what they needed, but not more, This came as the summer demand for single-use bottles was underway, though Kallman saw the retail PET bottle business starting to flatten as the COVID-19 emergency was waning. He noted that PET imports appeared to have slowed since end of April due to container logistics and could stay lower right into the fourth quarter.

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