The blog launched its Downturn Alert last week, since when we have seen dramatic moves in oil markets.
These may well lead to a slowdown in chemical orders, as buyers now have no need to secure supplies ahead of price increases, and may instead start reducing inventories to more ‘normal’ levels.
• Brent (dotted red line) is now up 24% since 1 January, versus 32% a week ago
• Benzene NWE (yellow) is up 14% versus 13%
• HDPE USG (purple) is up 25% versus 31%
• PTA China is back at 1 January levels, versus up 4%
The PTA move since the end of March is highlighted on the chart, as it may turn out to be a leading indicator for other products.
ICIS news also reported the following comments from a European PE trader on the new mood in the market:
“Suddenly there is much more availability in the market. Although producers might not be under so much pressure to sell, resellers are pushing volumes and cutting their losses. Buyers sense it, and so they wait. We offer reductions of €30-50/tonne to consumers, and they still want to wait for another few days before they buy”.