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Changes in Economic Landscape Led to Price Adjustment in the US Expanded Polystyrene Market
Changes in Economic Landscape Led to Price Adjustment in the US Expanded Polystyrene Market

Changes in Economic Landscape Led to Price Adjustment in the US Expanded Polystyrene Market

  • 28-May-2024 2:28 PM
  • Journalist: Sasha Fernandes

Recent shifts in the US Expanded Polystyrene market reflect larger economic trends and specific market dynamics. By May 24, 2024, the price of grey grade dropped to USD 2,150 per metric ton on DEL Texas basis, marking a 1% decrease from May 17, 2024. This price correction emphasizes the interaction between fluctuating demand and wider economic scenario.

In May, the US Manufacturing PMI rose, indicating a reasonable growth in the manufacturing sector. Manufacturing output reached a two-month high, fuelled by the significant growth in export orders in two years. Despite this, new orders slightly fell for the second consecutive month, indicating a sense of cautious optimism among manufacturers, including those who are into producing Expanded Polystyrene.

Rising input expenses have impacted manufacturers, driven by the sharpest rise in one-and-a-half years due to increased prices of metals, chemicals, plastics, timber-based products, energy, and labour. These higher costs have been passed on to customers, resulting in elevated selling prices and increased inflation in the manufacturing sector, including in the Expanded Polystyrene domain.

In this context, over the first three weeks of May 2024, the Expanded Polystyrene market saw price stability, with grey grade consistently trading at USD 2,170 per metric ton. However, prices began declining from the week of May 17th due to moderate demand and improved supply conditions, allowing buyers to secure their needs at lower costs.

The downward trend in Expanded Polystyrene prices was further influenced by reduced demand from key downstream sectors like packaging and construction. While prices were initially supported by high demand and supply chain limitations in the early days of the second quarter, softer demand over time led to the price correction by the fourth week of May.

Moreover, the decrease in crude oil prices during this period lowered production expenses for Expanded Polystyrene manufacturers, which helped ease cost pressures and contribu

ted to the market price decline.

While overall employment in the manufacturing sector witnessed significant growth driven by increased order book and enhanced business prospects, input cost inflation accelerated across both manufacturing and service sectors, marking the second highest increase in eight months. This indicates the broader inflation challenges that the manufacturers, including those in Expanded Polystyrene production, are facing.

The forecast for the Expanded Polystyrene market remains cautiously positive, with business confidence improving from the previous five-month low since April 2024, yet staying below long-term averages. Market sentiment remains affected by the uncertainties regarding inflation, interest rates, and geopolitics.

In conclusion, the US Expanded Polystyrene market is currently experiencing a transition phase due to overall economic shifts and industry-specific factors. The recent price adjustments are a result of the equilibrium between supply and demand, rising costs, and changes in the economic environment.

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