Rising Raw Materials And Increasing Demand

Mar 17, 2021

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Platts reported that thanks to the rising oil price and strong demand, the latest spot prices of five pan resins in the Far East region showed a passionate soaring trend, with all the quotations reaching a new high.

 Among them, the price of PE rose by more than US $100 due to the price of raw material ethylene and the tight production capacity. The spot price rose by US $80-110, with a weekly increase of 6-9%. The price of HDPE and LLDPE exceeded US $1000, and LDPE stood at US $1300.

On the other hand, ABS and PS also rose by $90 again under the incentive of raw material SM soaring by $203 (or 21%). PP increased by 70 US dollars with the demand and inventory reduction, and PVC increased by another 20 US dollars. Formosa Plastics, Taihua, Taiju, Yaju, taidahua and Guoqiao make a profit.

Analysts said that the strong demand for solar grade and foam grade EVA in mainland China, coupled with the good control of the epidemic in mainland China and the continuous recovery of domestic demand for automobiles and household appliances, and the outbreak of foreign epidemic also provided opportunities for foreign demand, including the increase of household consumption such as refrigerators and freezers, as well as the severe productivity constraints caused by the epidemic in India, led to the return of consumer goods orders to mainland China, which set off the strong demand for ABS and PS Continue to increase the temperature.

In particular, overseas COVID-19 is in the prevention and control of the seesaw war. 

The PE, PP and PVC and DOP are all well distributed downstream products. Besides the inherent consumption of the mainland’s basic plate, the demand for new products is higher and higher in the fourth quarter and early next year. Formosa Plastics also pointed out that due to accidents in petrochemical plants such as Japan and South Korea, the price of ethylene rose by 123 US dollars, reaching 948 US dollars per ton, and the price of propylene reached 915 US dollars, which set a wave band high. The price of PE and EVA, which were already in tight supply, rose strongly due to rising costs. On the other hand, the price of PVC also continued to rise under the tight supply and demand and active construction demand.

Dong Hongfuyuan, deputy director of Taihua, said that the stock of SM in East China in mainland China has dropped to 90000 tons, and the stock of SM in spot is 50000 tons, which is also on the low side. Although the quotation has slowed down after a short-term sharp rise, the price per ton is still stable above 1000 US dollars; even though the quotation of downstream products ABS and PS frequently hit new highs, the price offered by Taihua is still acceptable to customers, and it is estimated that the market situation of Sinopec is expected to continue until the end of the year.