Pricing summary: Steep declines don’t draw

By: 
January 26, 2009

Sluggish, moribund, plain slow: these fairly match the demand for resin in the past weeks, seemingly irrespective of plastic type or region of the world, according to plastics pricing and supply experts at The Plastics Exchange (Chicago, IL) and Polymerupdate.com (Mumbai, India). But spot prices started to inch back up early last month in expectation that demand will improve as processors and distributors deplete their stockpiles.

Spot polyethylene (PE) demand and prices rose a few cents in early December according to trading platform, The Plastics Exchange (TPE), with brokers and distributors wading into a market whose prices were off 60% from their summer peak. TPE says the broader market acknowledgement that a floor had been reach in spot prices prompted greater activity in the market. In contract prices early last month, rates had fallen, with speculation that there might be more decreases on the table.

Following a series of production cuts, TPE said only the most efficient polypropylene reactors were operating, with widespec availability extremely limited, forcing many to buy generic-prime PP.

Last month PE prices drifted lower in Asia, according to Polymerupdate.com, with little change expected this month, as business slowdowns or closures for the Chinese Lunar holidays, to begin Jan. 26, will further weaken demand. The story was similar for PP, with processors showing little interest even as prices had fallen. PS buyers across Asia remained convinced that further price declines would come, reported Polymerupdate. In Europe, the firm said last month saw further declines in prices of most plastics, contract and spot, but even then demand was not sparked.—[email protected]

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