Prime virgin prices, sourced from major polymer websites in China, are quoted in Renminbi (RMB), including VAT, with an exchange rate of 1 US dollar equaling RMB at 7.1471.
Crude prices settled in New York at $73.81, driven by increased tensions in the Middle East and supply disruptions in Libya. Oil prices are affected by the US surge supply from shale gas, facing challenges from Houthi attacks in Red Sea areas, and global demands.
Prime resin prices in China remain volatile due to declining feedstock costs of propylene, ethylene, and styrene for PP, PE, and PS. Other feedstocks like Ethylene Glycol, PTA for PET, Phenol, and Acetone for polycarbonates are also affected. With Chinese New Year holidays leading to a pause in material purchases for six weeks and uncertainty around increased freight prices due to Yemen’s Houthi attacks in the Red Sea, the industry faces tight liquidity. Petrochemical companies initially announced price increases but ended up offering discounts for cash deals due to slow demand. Market conditions are uncertain and pessimistic due to geopolitical factors and oversupply.
Demand for recycled materials of PE, PP, PET, and PVC is slowing down due to Chinese New Year holiday shutdowns and a lack of overseas orders. Some participants might stock up for post-Chinese New Year and cautiously offer at bargain prices. Engineering plastics like Polycarbonates, Nylon, PMMA, and POM, serving electrical applications, the automobile industry, and compounding factories, face demand challenges linked to consumer demands and price competitiveness. The downward trend in global prime prices over the last few months has negatively impacted recycled material prices. In China, recycled PET flakes have good demand at around US $800 FAS for both exports and domestic markets, but the cost of feedstock bottles in bales exceeds $600. Competition is tough everywhere, leaving no margin.
Scrap plastic supplies for Southeast Asia are impacted by an unexpected increase in freight costs, especially from Europe. Shipments are delayed and incurring higher freight costs, leading to order cancellations. There is a mismatch in global prices, with suppliers unable to reduce prices, and customers unable to afford higher prices due to shipping lines’ surcharges. The thin margin situation is also attributed to high costs of collection and separation, freight, and processing. Offers like PE grade A film for $400 FAS, but customers in Asia can only accept prices at CNF. There are offers of polycarbonates regrinds from bottles for $1250 to $1700 per ton, but Asia can only accept less than $1100 per ton. 2024 poses another challenging year following a difficult 2023.