Resin Industry Struggles to Find its Footing Amid Economic Uncertainty, says Beroe
RALEIGH, N.C., Feb. 7, 2023 /PRNewswire/ -- The global market for resins has been struggling throughout 2022 due to a bearish economic outlook, weak demand from downstream applications, several producers cutting operating rates of polypropylene and polyethylene production units resulting in narrow profit margins, and higher energy prices caused by the Russia-Ukraine crisis which has added to the difficulties faced by the industry.
The major factors driving the negative trend in resin prices were weak demand from both the construction and automobile industries. Despite some market participants anticipating modest restocking activity towards the end of the year, China's strict COVID-19 controls could remain a bearish factor. Additionally, rising inflation rates around the globe have discouraged buyer activity.
Looking ahead to 2023, the market for resins is expected to improve as inflation rates are forecasted to fall due to increased interest rates around the global markets. This is expected to lead to a recovery in demand for resins from downstream industries. Producers currently operating at lower rates are expected to improve production and keep supply ample to meet the expected increase in demand, according to a latest report by Procurement Intelligence firm Beroe.
However, the prices for feedstock propylene and ethylene are expected to increase marginally in H1 2023. But in H2 2023, crude oil prices are forecasted to decrease which will impact feedstock prices resulting in a negative trend. The impact of feedstock prices on the resin prices is expected to be medium, as downstream demand is expected to drive the prices in the long term.
According to the data provided, the average price for polypropylene is estimated to be $1622/MT in 2022 and $1683/MT in 2023, and for polyethylene is estimated to be $1483/MT in 2022 and $1467/MT in 2023, respectively.
For more such market data, insights, and intelligence check out Beroe LiVE.Ai™.
Beroe is a global SaaS-based procurement intelligence and analytics provider. We deliver intelligence, data, and insights that enable companies to make smarter sourcing decisions – leading to lower cost, reduced risk, and greater profits. Beroe has been a trusted source of intelligence for more than 15 years and presently partners with 10,000 companies worldwide, including 400 of the Fortune 500 companies. For more information about Beroe Inc., please visit https://www.beroeinc.com/.
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SOURCE Beroe Inc.