Demand has been low in the Polish polyolefin market in the last pre-holiday week, according to Chem-Courier’s data. Converters have been tapping into their raw material stocks or purchasing only small batches. "We have been discussing the 2024 contract deliveries with customers this week. There are hardly any buyers willing to book spot lots for delivery in 2024," - a trader has stressed. Some European producers, including Belgium-based ExxonMobil, have already closed their order books for this year.
Spot prices have stayed at the levels of last week. European film HDPE and LDPE has been changing hands at €1,020 - 1,080/t and €1,00 - 1,060/t DDP Poland, respectively, €150/t and €200/t less than in early November. Raffia and block PP copolymer grades have been traded at €1,000 - 1,080/t and €1,075 - 1,185/t, decreases of €135/t and €145/t from November.
Several factors will affect the polyolefin market in Europe, Poland in particular, in January. Firstly, market players will monitor the situation in the Red Sea and on the Suez Channel. Changes in the shipping routes or even defaults on delivery of petrochemicals, monomers and finished plastic goods from the Middle East and the other countries to Europe will have implications for the availability and, accordingly, prices of goods.
For instance, Indian companies, which are large suppliers of finished plastics, have reported indefinite disruptions to the export. South Korea’s LG Chem has told Chem-Courier that it has halted the production of general-purpose film LLDPE grades in favour of specialty grades for rotational or injection moulding to sell them domestically rather than abroad. Some companies say delivery is taking more time now, while PE makers from the USA have already declared their intention to lift quotes to European customers in January.
The above factors and expectations of higher converting activity next year may push polyolefin prices up. As the outlook for PE supplies is uncertain, the commodity may gain €30 - 40/t. PP prices may climb €20/t on average. At the same time, suppliers may fail to raise prices next month. "Even if the MCP [the monthly contract price] goes €10 - 20/t up, polyolefin producers will absorb that part of the cost" - a market player said. "If an increase in converters, activity confounds expectations, a shortage of imports or an increase in transport costs will be insufficient to provide impetus for [PE and PP] appreciation" - they elaborated.
