The plastics market scenario

Since last November, all oil linked raw materials markets have been in turmoil.

The pandemic effects were supposed to lead to a cost reduction, especially for the oil goods, since the multiple lock-downs have slowed down people’s travels, have caused the shrinkage of economies and of consumption of goods. Instead, since November 2020, we have been observing a substantial increase of oil linked raw material cost all over the world.

What are the reasons behind? After an accurate observation, several factors might be traced, some of them have a major impact: the most important one is without any doubt the substantial increase of the crude oil price and its derived. This affects the prices of all the plastics derivates such as polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC) etc. The increase is due to the reduced levels of raw material supply that come from the main global oil producers (OPEC), which took advantage of the shrinkage of economies to plan and carry out plant maintenances. These activities led to a decrease in production for a long period. Furthermore, even though is not declared, the global oil industry keeps on raising process due to the fact that some countries have restarted their consumption. For example, in some areas such as Asia, the pandemic seems to be no longer a problem and, especially the Chinese market, is reaching high rates of economic recovery. This high demand attracted a large number of Western and the American raw material producers who have been moving their raw materials stocks from local to Asia, causing a lack of availability in Europe, both for local needs and imports.

Today, the main global and European publications related to raw materials trend also announce that this situation is likely to continue during 2021. In specific, they also confirm that the actual increase, which is 65% more or less, can get worse with the reopening of the Chinese market after New Year; certainly, there will not be any big decline in the long term during 2021, because the availability of raw material will be limited for the entire year.

In conclusion, we are going to face difficult times, but our professionalism and customer intimacy together with our broad product portfolio will be the winning cards to overcome obstacles with these tough times.