The polyolefin market has started reviving in H1 January. Market players say that in addition to completing December deliveries, they already have new orders for PP and PE, with the former bought more frequently than the latter. Converters have started restocking. Increased transport costs and lower availability of polymers from the Middle East and Asia is expected to fuel demand for the European commodities inside and outside Europe. Market players have reported increased interest in them from Turkish traders and converters.
Meanwhile, converters prefer buying the materials on the spot market to concluding long-term contracts with producers and traders. This will help them hedge against wild fluctuations in raw materials prices.
Firmer energy prices, stronger demand and logistical issues have predictably prompted European polyolefin makers to raise prices, although monomers have held their value this month.
PE gained €30-40/t in the Polish spot market last week. At the same time, some producers have left their price lists unrevised. PP spot prices have climbed €20-40/t since early January and end of December. Players forecast the market to recover further. They believe that another price rise is possible as early as this week. "Due to growing interest and possible material shortages, mostly PP, we expect prices to increase by €30-50/t" - a Polish trader has informed. The long-term outlook suggests that polyolefins will appreciate steadily. However, the blockade of the Suez Canal may cause a spike in their prices.
