Demand for injection PE has strengthened this week, according to Polish traders. ‘We get the most enquiries for injection HDPE and LDPE and the fewest requests for PP homopolymers from converters,’ one of the market players has reported. Converters that make products from PP complain about limited polymer availability. ‘We had to buy one truck each from different producers as no one wanted to sell over 24 t,’ a PP converter has said. European producers have probably started cutting capacity utilisation in order not to sell the commodity at its cost price. Polyolefins have got cheaper again. PE prices have lost €10 - 40/t depending on the grade. Film LDPE has depreciated the most, by €40/t. PP quotes have slipped €20 - 40/t depending on the variety.
Several factors are currently affecting the market situation at once. The first one, which Chem-Courier wrote about last week, is the launch of the government programme Safe Credit 2%. Market participants hope the construction industry will start reviving. It is likely to happen closer to September when banks begin to give mortgages. The capacity utilisation reduction by European producers also has an effect on the market. Tighter commodity supply as well as low material prices, which have already reached the bottom, according to many players, may encourage converters to restock somewhat. Another positive factor might be crude oil price stabilisation and this week’s $60/t naphtha quote rise. The last important one is the plateauing of plastic value in China and its predicted increase. On all the above factors, polyolefin prices are expected to stabilise in August and possibly grow in September. This year, however, the market has been so difficult to predict that the players are slow to make accurate forecasts.
