For the Quarter Ending June 2021
Supply shortage of upstream Propylene and Acrylic Acid increased the prices of downstream commodities in USA during Q2 2021. Despite of improvement in production activities across Gulf of USA, low inventory level of upstream chemicals led to a further rise in prices of downstream chemicals including Superabsorbent Polymers in USA. It was observed that the prices of end use products like sanitary pads and diapers kept on rising in USA, and prime reason behind this rise was Texas freeze of February. Meanwhile, the demand from end use segments remained sufficient to further support this price hike in USA.
Asia witnessed stable demand for SAP during this quarter, under ample stock availability. In Indian market, prices of SAP fluctuated marginally, while the demand remained stable to firm throughout the quarter. However, despite of high prices in other countries like USA, prices in India remained in a narrow range due to dull market sentiments. Traders had to sell their cargoes on a cheaper rate to regulate their inventories. Meanwhile, BPCL announced a 50 KTPA SAP plant in India, under the vision to reduce India’s import dependency for SAP. In addition, South Korean giant LG Chem revealed that they have got ISCC-Plus certification to produce 9 sustainable chemicals including SAP at its Yosu and Iksan facility.
SAP demand in Europe remained firm during this quarter, as being an essential commodity the demand for Super Absorbent Polymers from consumer usually remain stable in Europe. While prices also showcased buoyancy throughout the quarter, backed by several factors like transportation difficulties, lower feedstock availability and expensive imports of raw materials from other countries like USA. Meanwhile global inflation also played an important role in providing buoyancy to the prices across the region for SAP.
For the Quarter Ending March 2021
Disruption across the US gulf region due to the freezing temperatures created a global shortage of feedstock chemicals, during this quarter. Several feedstock chemicals plants like Polyacrylamide remained idled due to unfavourable operating conditions. Besides, several upstream Acrylonitrile plants like INEOS and Celanese were compelled to declare a force majeure under this rare climate calamity. Due to the rise in prices of feedstock chemicals amidst firm demand from downstream diaper manufacturers, prices of SAP rose effectively and reached historic highs during the quarter.
The Asian market faced shortage of Superabsorbent Polymer (SAP) across the region due to lower domestic output and reduced imports frequencies. Due to the shortage of containers and record high freight cost prices of SAP observed consistent increments throughout the quarter. Since SAP is a majorly imported commodity in the Indian market, the high transportation cost directly affected the price of SAP in the country, which rose from CFR USD 1547.6 per MT (January 2021) to USD 1654.8 per MT (March 2021). In addition, Formosa plastics announced investment of more than USD 7.17 million on its Taiwan based plant to boost the production by 20 KTPA SAP.
Europe showcased firm demand from domestic diaper manufacturing sector, during Q1 2021. However, the supply remained insufficient to satisfy the overall demand, as traders were also looking forward to satisfying export demand to improve their margin. Meanwhile, BASF announced permanent closure of its Mannheim SAP plant in Germany due to unfavourable market conditions. In addition, they also announced to invest USD 30.2 million in Antwerp Belgium, to produce SAP.
For the Quarter Ending December 2020
The Asian SAP market outlook for Q4 2020 was shrouded with acute volatility due to upstream supply crunch. A leading SAP manufacturer in South Korea reported double digit decrease in its SAP sales during the fourth quarter owing to acute shortage of upstream materials. Scheduled turnaround at LG Chem’s Yeosu NCC plant significantly affected the feedstock availability in the region. Since SAP is majorly imported in India, the shortage of containers and soaring ocean freight directly affected the prices of SAP in the Indian markets. Due to increase in the shipping charges and upstream price pressure, the CFR JNPT price of SAP increased from USD 1603.2/tonne in October 2020 to USD 1680.2/tonne in December 2020.
USA dominates the North American super absorbent polymers market in terms of demand. During the final quarter of 2020, the demand of upstream Acrylic Acid increased, which led to increase in Sodium Polyacrylate prices. In addition, the price of upstream Propylene witnessed sharp increase during this period, due to acute shortage of supply across the region. This shortage was led by the reduced functioning of refineries at several locations due to seasonal hurricanes hitting the gulf region. The demand from consumer durables segment was on rise along with recovery of domestic activities from the pandemic-induced slowdown.
The European SAP market seemed grappling with tight supply of raw materials during the 4th quarter including upstream Acrylic Acid. The overall demand for Acrylic Acid was strong during Q4 2020 but the supply was pressured due to shortage of upstream Propylene which seemed not to ease at least in the first half of 2021. A series of plant turnarounds exacerbated the product tightness. Pushed by a number of factors, price of SAP witnessed sharp increases between Nov. and Dec.