BLOG: Big divergence between Europe PE, PP markets continue, creating seller/buyer opportunities

John Richardson

17-May-2022

SINGAPORE (ICIS)–Click here to see the latest blog post on Asian Chemical Connections by John Richardson. Regular readers of the blog will know that we first highlighted the great polyolefins market divergence in April 2021. We said that:

  • Asian and Middle East producers needed to sell more to Europe because of much better netbacks than in China.
  • Buyers should secure more resin supplies from Asia.
  • Until comparative price differentials and spreads started to normalise – which we would be able to recognise from the historic ICIS Pricing data – producers and buyers needed to focus on these two parallel opportunities.
  • But this would require dealing with very challenging container-freight markets. ICIS trade-flow data suggest this can be done.

We also presented a scenario where European demand remained strong with supply tight as China moved in the opposite direction. This scenario has happened, as we detail in today’s post.

If you haven’t done so already you can literally, make or save millions of dollars from these highly unusual trading patterns. It is never too late to start.

Editor’s note: This blog post is an opinion piece. The views expressed are those of the author, and do not necessarily represent those of ICIS.

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