Prices in the polymer market look somewhat rangebound. Much that sellers would like to increase prices to cover increased feedstock costs, and the expense of shipping goods around the Cape of Good Hope, in order to avoid the terrorist issues affecting the Red Sea route, buyers appear to be able to secure materials at favourable prices. Perhaps, what is noticeable is that many of the low-price bargains have disappeared from the market and this has caused the Polyolefin and Styrenics baskets to tick up slightly.

A potential exception in this situation is PP, where the combination of restricted feedstock, and limited availability of the more specialised grade slate, which tends to be more oriented to European polymer production, may give sellers strong enough supply/demand fundamentals to push through further increases. The tighter supply of PP may be  situation that the market may have to adjust to, as the increased penetration of US origin PE, will dampen demand for EU produced ethylene from expensive Naphtha, from which C3 is a co-product for PP production.

There is some suggestion that packaging markets are starting to improve, as destocking throughout the whole supply chain finally starts to ease.

Crude oil prices look set to increase further with some players forecasting that Brent Crude could soon hit $95 per barrel, on the back of supply concerns. Clearly further crude oil cost increases are likely to be reflected in feedstock costs, which in turn will place inflationary pressure on polymer producers.