Quarterly Update on Petroleum Resin Market
For the Quarter Ending March 2021
North America
In North America region, exports and domestic demand for different petrochemical resins remained high, though the supply remained severely low. More than 80% plants remained idle for more than a month due to winter freeze, that chocked the total output of resins from US globally. This freeze created a global supply crisis leading to a considerable price rise affectively throughout the quarter. Prices marginally stabilized by March beginning following the resumption in several plant activities. Again, in late March, prices witnessed an astonishing rise, like for Polypropylene (PP) rose by USD 271.2 per MT, Polystyrene by USD 113.3 per MT and Polyethylene by USD 135.1 per MT.
Asia
During this quarter, demand for feedstock Naphtha from some countries were higher than the others, due to sturdy demand for downstream Petroleum Resin. In China, Lunar year reduced the utilisation of Naphtha for days, which consequently led to a decline in its inventories. While in India, demand for Petroleum Resins from downstream sectors remained high, hence the demand for Naphtha also remained high. Moreover, the global shortage for Naphtha due to the US gulf storm and container shortage across Asia-Europe trade route, skyrocketed the prices of Naphtha in India. Naphtha prices rose from USD 742.08/MT to USD 927.66/MT from January to March ending 2021.
Europe
European market faced high export demand for all types of Petroleum Resins due to the shortage in supply from US in the global market. Since the production from Europe was not sufficient to satisfy the global demand alone and hence it led to an upsurge in the prices. Later during March end Suez Canal crisis created another critical condition, where it increased the prices of most of the chemicals traded between Asia and Europe. High freight cost also emerged as a considerate factor that propelled the prices of Petroleum Resin in the European market.
For the Quarter Ending December 2020
Asia
The supply of Petroleum resin across Asia was observed tightening by the end of the Q4 2020 with the prices gradually decreasing due to tight regional supply. However, the uptrend was absorbed in the spot prices of petroleum resin due to reinstated demand from end user industries such as adhesives & sealants, rubber compounding, paints & coatings, etc. with several sectors picking up after a muted Q2. Resilient demand from these industries rose the spot prices of Petroleum jelly in Q4 of 2020. The long-term contract prices are further estimated to be ascend with anticipations of further increase in demand from the paints & coatings sector owning to re-establishment of construction activities in the region.
Europe
Supply tightened due to restricted lockdown occurred due to second wave of Covid-19. Also, seasonal hurricanes hitting the US export market created deficit of imports in the European region, creating a further slump in supply. Traders and end users dived into the spot markets amidst strong fears of short supplies during the next quarter. Spot offers were hiked by double-digit as compared to Q3. Some unprepared buyers rushed for procurement from the nearby sources, in anticipation to secure cargoes to cater to near-term demand.
North America
Significant increase in the export demand due to increased production activities from the Asian market increased the export spot offers of the product. Low inventories due to strong downstream also pushed up the pricing curve towards the year-end. As downstream industries are expected to operate at higher production rates, the contract price of Petroleum Resin is further expected to increase for the next quarter. Moving into Q1 2021, Petroleum Resin market prices are expected to respond to the change in the demand-supply situation and indeed an increase in the price is expected for due to stability in demand and soaring upstream rates.
