News #014

The uncertainty of the markets following the sharp increase in the price of oil has led the raw materials to an extremely important uptrend that has obliged all producers to revise their commercial offers.

Asian producers sold many volumes in a short time before withdrawing their offers, while European producers, while benefiting from the competitive prices of Raws in the previous months, also decided to put themselves in holding position.

Demand is strong enough especially in view of the summer, and this certainly does not help buyers because most of the criticality and price evolution is due to a downward revision of margins.

Profit even in times of war is always everyone’s priority, unlike support in partnership between supplier and customer which should be the true ambition of the supply chain.

We also note Ukraine, a market of about 300,000 tons of pets, which will obviously fail or move to other countries.

The world is changing in flows, especially due to the impositions towards Russia which will result in the downsizing of flows in all plastics and also in the pet sector.

What to expect in the coming weeks? It is the recurring question from everyone; unfortunately in crisis situations the solution or rather, the strategy that we suggest to our customers is that of splitting up purchases, in order to avoid making wrong decisions.

The impact of exchange rates amplifies the already dramatic situation in itself; in this context, obviously the logistics are not improving yet. Energy cost will be the key driver of the demand, most of converters are force to shut down in order to avoid a significant loss that cannot be recovered from the market compression.

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