Mounting cost pressures led to significant price rises

Mounting cost pressures led to significant price rises

Producers of standard thermoplastics pushed through significant price increases in January as cost pressures mounted. L/LDPE experienced the largest hikes with settlements up by more than 10% on the previous month. HDPE, polypropylene and polystyrene prices rose by nearly 5%. PET prices rose by around 2% in a very tight market. PVC was the only polymer not to see any gains with prices being rolled over in January.

Higher than expected increases in Q1 monomer contract prices gave added momentum to the upward price movement. Market conditions were already ideal for polymer price hikes even before monomer prices were agreed. Producer stocks are low and availability is generally quite tight after an unusual number of plant shutdowns for maintenance in recent months. Demand has also held up reasonably well as converters attempted to replenish their stocks before prices went any higher.

The scene is now set for further price hikes in February. Producers will be pressing hard for substantial increases to recover higher costs and improve their overall profitability.