For the Quarter Ending September 2023
North America
Polyolefin Plastomer (POP) prices in the North American market during the third quarter of 2023 exhibited a mixed pattern. They saw a significant increase in July, only to subsequently decline consistently in the following months. The price of POP in the US market went up in July due to strong demand, driven by a substantial rise in vehicle sales in the US (more than 20% in June) and Western Europe (approximately 19.6%). This led to higher POP procurement in July. In the United States, the Manufacturing Purchasing Manager’s Index (PMI) for June dropped to 46.3 from 48.4 in May, primarily because of reduced manufacturing activity, a decline in new orders, lower input costs, and increased destocking, which indicated reduction in POP supply, which supported the surge in its prices. However, for the rest of the quarter, the POP market experienced a noticeable decline in prices. This decrease can be attributed to the continuous fall in the prices of the raw material, Ethylene, which had a downward impact on the overall production costs of POP. Interestingly, despite robust market sentiments in the global automotive and tire sectors, the market dynamics favoured oversupply, resulting in a significant decrease in pricing trends.
APAC
Unlike North America, Asia-Pacific region witnessed consistent decline in Polyolefin Elastomer (POP) prices during the third quarter of 2023. In the third quarter of 2023, the Asian new vehicle market experienced significant growth, mainly due to the ongoing recovery from the COVID-19 lockdowns that began to ease in the latter part of the previous year. This recovery was further facilitated by an improved supply of semiconductors, allowing automotive manufacturers to increase production and reduce order backlogs. Despite strong demand from the automotive industry, the prices of POP in the Asian market have been consistently decreasing. This price decline can be attributed to several factors, including a simultaneous drop in the prices of the key raw material, Ethylene, and increased competition in the market. These factors have combined to reshape the pricing dynamics in the POP sector significantly. The reduced cost of Ethylene, has directly impacted manufacturing expenses, necessitating a downward adjustment in the prices of the final products. Additionally, heightened competition has led manufacturers to strategically lower their prices to maintain their competitiveness in the industry.
Europe
In the European market, the Polyolefin Plastomer (POP) sector witnessed a consistent and noteworthy increase in prices during the first month of the third quarter. This price surge was primarily attributed to a substantial surge in demand from the automotive industry. Additionally, the escalating costs of crude oil and Ethylene further contributed to the initial uptick in the price of POP. However, an interesting development occurred in the subsequent two months, where a gradual and sustained decline in POP prices became evident. This downward price trend can be predominantly ascribed to a substantial reduction in production expenses. The driving force behind this cost reduction was the extended period of decreasing raw material costs, notably in the case of Ethylene, which serves as a crucial component. This decrease in the costs of raw materials had a direct and pronounced impact on the final pricing of POP. As a result, the market price of POP exhibited a continuous and discernible decline. This ongoing price descent occurred despite the backdrop of positive advancements within the automotive sector, which continued to demonstrate growth.
For the Quarter Ending June 2023
North America
In Q2 2023, the North American market showed a mixed trend in Polyolefin Plastomer (POP) prices. Prices fell sharply in April, rose sharply in May, and fell again in June. The Polyolefin Plastomer market declined in the US market as the automotive sector struggled with rising interest rates and challenging economic conditions. This ultimately reduced demand in the Polyolefin Plastomer market, driving prices down significantly throughout April. In the United States, prices for Polyolefin Plastomers soared in May following a surge in demand in sectors as diverse as packaging, consumer goods, and automobiles. This increased demand has created a demand-supply imbalance, driving up the price of Polyolefin Plastomers. However, the price of Polyolefin Plastomer (POP) in the US market fell in June due to an oversupply of the material. The price of POPs fell as the supply of POPs far exceeded what the market needed to meet demand. The US manufacturing Purchasing Managers Index (PMI) fell to 46.3 in June from 48.4 in May. The further decline in PMI was due to lower new orders for some products, lower input costs, and higher destocking. However, POP prices were unaffected by his PMI drop in the country.
APAC
Polyolefin Plastomer (POP) prices continued to fall in the first two months of Q2 2023 before stabilizing over the last week. The continued struggles of declining demand and high inventories in automotive industry of China were hurting the Polyolefin Plastomer market. As a result, demand for Polyolefin Plastomers in the market ultimately declined which caused a significant fall in POP prices throughout April. Furthermore, Chinese Polyolefin Plastomer prices fell in May despite strong demand from downstream industries. This price drop was due to overflowing stocks in the market. Though there was an adequate demand from sectors such as construction and consumer goods, the supply of Polyolefin Plastomers exceeded immediate demand. Excess inventories resulted in oversupply and downward pressure on prices. Despite strong demand from the downstream industry, the market was unable to absorb excess inventories, driving Polyolefin Plastomer prices in China down throughout May. Polyolefin Plastomer prices stagnated in the Chinese market in June. However, June's POP price remained unchanged as the supply and demand dynamics stabilized and supply was sufficient to cater to the demand.
Europe
In the second quarter of 2023, the European market showed a mixed trend in Polyolefin Plastomer (POP) prices. Prices fell sharply in April, rose sharply in May, and fell again in June. April saw an improvement in market sentiment of the downstream automotive industry despite falling Polyolefin Plastomer prices in the Spanish market. Ultimately, poor performance of the replacement tire industry led to lower Polyolefin Plastomer prices, resulting in lower Polyolefin Plastomer purchases. However, strong demand from the automotive and pharmaceutical industries made Spain's Polyolefin Plastomer prices soaring in May. In the automotive sector, demand for Polyolefin Plastomers, which are essential in the manufacture of tires and other auto parts, increased. As a result, increased demand from these sectors has significantly increased the price of Polyolefin Plastomers on the Spanish market. In Spain, the market value of Polyolefin Plastomers fell in June. According to the Spanish Automobile Manufacturers Association (ANFAC), the number of passenger car registrations in June increased by 13.3% from a year earlier. The Spanish market suffered from weak demand for POP despite the booming market dynamics of the downstream automotive industry. The manufacturing Purchasing Managers Index for the Spanish market fell to 48.0 in June, indicating a slowdown in industrial activity in several sectors. However, the Polyolefin Plastomer market was unaffected by his PMI drop in the country.
The Polyolefin Plastomer market had mixed sentiments in the first quarter of 2023, which was aided by changing dynamics of supply and demand. Prices for Polyolefin Plastomer climbed in January, followed by a stable pricing trend in February. However, as the quarter's end approaches, prices have started to fall. As soon as the semiconductor supply started to improve, the automotive industry started to rebound, but it was severely harmed by the economic turbulence brought on by the failure of two big US banks. The automotive industry used less Polyolefin Plastomer because of the recession's harsh effects, which eventually led to a drop in price. Hence, In the USA, the assessed price of Polyolefin Plastomer (POP) was USD 4000/MT FOB USGC during March.
The Polyolefin Plastomer market in the Asia-Pacific region displayed conflicting sentiments. In the Asia-Pacific region, the price of Polyolefin Plastomer increased till February before declining in March. As China started to destock its automobile inventories, the ailing Asia-Pacific automotive market began to show signs of deterioration swiftly. Tesla decreased the market value of cars because of high inventories and low sales, which sparked a pricing war in the Chinese auto industry. Hence, the manufacturing of automobiles decreased because of the automotive industry's strong destocking efforts, which also influenced the demand for Polyolefin Plastomer. Thus, the price of Polyolefin Plastomer (POP) assembled at USD 3300/MT CFR Qingdao.
The Polyolefin Plastomer market across Europe revealed mixed emotions. The cost of Polyolefin Plastomers had been falling for the first two months of the quarter before a large price surge in March. As China's market started to open more in March, prices for Polyolefin Plastomer increased. An increase in the supply of semiconductors allowed for this surge. The need for Polyolefin Plastomer in the automobile industry increased along with the increased production of automobiles. Additionally, during the quarter, Polyolefin Plastomer inquiries increased due to the underserved automotive demand in the European market, which increased auto sales. Due to these factors, the cost of Polyolefin Plastomer (POP) in Germany in March was USD 3400/MT FD Hamburg.
