Prices change, demand grows in Polish PE, PP markets

Prices change, demand grows…

Demand for polyolefins has strengthened in Poland since last month. Traders say that converters are returning to larger purchases while refusing to buy in the goods delivered on pallets.

According to Chem-Courier’s assessment, producers of consumer goods and films, including those for furniture packaging, are reportedly purchasing PP frequently. "The construction sector has picked up a bit," said one of them. There is also demand for pipe PE.

There is allegedly a shortage of some materials in the market, with traders claiming that some producers have refused to give them prices this month. So, the Hungarian producer is foregoing sales of film HDPE and a Northwestern European one those of LDPE. A producer from Uzbekistan has put no injection HDPE on the market this month.

The rumoured lack of supply, the rise in prices and bullish outlook have caused a wave of panic buying among Polish converters. However, some of them are lacking working capital to ramp up purchases. "We bought one more machine, we cannot afford more. It will be impossible to take such sums out of the turnover, there is a crisis in the whole industry," elaborated a PP converter.

Last week, the range of prices for some polyolefins has widened. All traders and producers confidently insisted on price increases above €1,000/t for all of them but film LDPE two weeks ago, and this one prices have gone below this level again. Producers from Uzbekistan, the Czech Republic and Slovakia have been quoting lower prices. "As demand is not strong enough, it is impossible to keep up prices," a trader has explained. At the same time, not only the bottom but also the top of the market price range has changed. "We see the usual speculative moves from producers," the same trader has added.

There was a long weekend because of a public holiday this Tuesday in Poland and many companies were closed on Monday. Prices are expected to hold steady until the end of the month, with demand rising slightly in the second half of August.

"Prices traditionally rise in September," PMW’s source has said. However, market players are split on the matter. Some expect prices to gain up to 10% and others believe that an increase of €10-30/t at most, if any, will occur. Chem-Courier leans towards the second scenario. A demand boom is unlikely any time soon. Reduced production capacity may affect downstream companies, but they will be on a very tight budget. "It will stay the way it is now until the end of the year. Even if producers attempt at raising prices again in September, the market will not accept this and they will fall again by October due to a lack of demand. There is a glimmer of hope that China gets more active, but it seems rumour rather than reality," concluded a Polish market player.

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