BOPP Film Prices Depreciate in December Against Easing Production Costs and Low Demand
BOPP Film Prices Depreciate in December Against Easing Production Costs and Low Demand

BOPP Film Prices Depreciate in December Against Easing Production Costs and Low Demand

  • 19-Dec-2023 7:10 PM
  • Journalist: Li Hua

The market situation of BOPP Films remained bearish before stabilizing in the first half of December 2023 across the European market. The prime reason for the bearish situation is attributed to depreciating prices of Polypropylene and upstream Crude Oil and the anticipated demand from the festive season which is yet to materialize.

Prices of BOPP Films depreciated by almost 1.3% in the German market due to depreciating prices of feedstock Polypropylene which has also declined by almost 2% from the first week of November 2023, till the week ending December 8, 2023, which eased production costs. The declining production costs of BOPP Films were further complemented by declining prices of Crude Oil, which depreciated by more than 12% in the given timeframe. Even though demand from the downstream automotive industry was recorded to have performed well in November as indicated by increased sales which appreciated by more than 12%, the current consumption rate of BOPP Films proved insufficient to improve the market situation of BOPP Films. The German electric automotive industry also did not perform well in November with sales depreciating by almost 22% after the German government abruptly ended the scheme of subsidizing the purchase of electric vehicles. The only demand for BOPP Films was generated from the packaging sector of the FMCG industries which was anticipated to materialize as the festive season advanced.

The British market for BOPP Films also followed a similar bearish market situation due to a disappointing performance of the automotive industry as indicated by the automotive sales remained largely stable in November with minor fluctuations. The only demand of BOPP Films was recorded to moderate from the downstream packaging sector of FMCG industries which is further anticipated to strengthen as the festive season advanced. With production costs being largely low, due to depreciating prices of Polypropylene due to the underperformance of the Polymer industry, and Crude Oil, due to conflicting stances of OPEC+ members, the consequence was the influx of inexpensive inventories of BOPP Films into the British market from the exporting German market. This resulted in a highly supplied market for BOPP Films where the traders did not find any room to improve the profit margins.

Overall, prices of BOPP Films in the European market are expected to increase as purchase sentiments improve mainly driven by the advancing festive season and the anticipated increments in the prices of prices of upstream Crude Oil as Russia and Saudi Arabia voluntarily announce the extension further production cuts by almost 2 million barrels in January 2024. The demand for Polypropylene from the polymer industry is also anticipated to increase during the festive season which is also likely to increase the production costs of BOPP Films.

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