In Africa, August offers from Middle Eastern suppliers indicated rollovers or moderate gains as compared to July levels in most regional markets. Although supplies were not ample, weakened demand conditions prevented sellers from seeking large hikes in August.
In Nigeria, a major Saudi supplier’s new offers for August indicated increases of $40-50/ton while LDPE offers were unchanged from their previous levels. Meanwhile, ELEME -Nigeria’s domestic producer- also announced rollovers for August.
“We are waiting to hear from Asian suppliers but they are unlikely to be competitive against their Middle Eastern counterparts,” a trader said, citing increased freight costs.
The trader also reported a log of pending orders from the major producer and said:
“Delayed shipments are affecting the supply levels in the market. Supplies are diminishing fast and this keeps prices firm despite the disappointing demand.”
Access to foreign currency was also reported to have been restricted in Nigeria. In late July, Nigeria’s central bank halted the sale of foreign exchange to money changers. The decision, which was aimed at easing pressure on the nation’s currency, halted the central bank’s supply of $5.72 billion annually.
In Kenya, a major Saudi producer’s new offers increased by $40-50/ton, with the exception of LDPE film grades, which remained stable from July levels. According to daha from ChemOrbis Price Index, this marked the first increase since May.
Players reported slower-than-normal market activities and dwindling end-product sales. “Supplies are not ample but they are enough to meet demand,” a trader said.
In South Africa, offers for Saudi LDPE film were stable from July while HDPE film and LLDPE C4 film offers increased by around $40/ton. The supply availability was largely balanced with demand. “Players are pushing for lower deals, largely due to slow activities,” a trader in Durban said.
In Algeria, sluggish demand overshadowed the fact of limited availability in the region. Accordingly, the latest offers for LDPE film and PPH grades were stable from last month while HDPE and LLDPE C4 film prices dropped by $20-70/ton.
“Activities are slow as buyers are limiting their purchases to immediate requirements,” a trader in Algiers said.
In China, PE prices have been steadily rising since the second half of June, with LDPE taking the lion’s share of these gains. As for PP, meanwhile, a stable to slightly firmer trend has dominated the market within the same period.
Import LDPE film prices rise to 2-month high
Supply tightness for import LDPE film has carried prices to the highest level since mid-May, ChemOrbis Price Wizard shows.
According to the weekly average data obtained from ChemOrbis Price Index, CIF China basis LDPE film prices have gained a total of $135/ton in the last five weeks to reach $1325/ton while LLDPE and HDPE film prices with similar terms have witnessed $65/ton increases during the same period to $1115/ton and $1100/ton, respectively.
“Import PE offers in China have been firmer, particularly for LDPE amid tight availability from the overseas markets. Local supply has also remained limited due to ongoing plant maintenance turnarounds at home. Despite some lingering demand concerns, domestic inventories have been drawn down sharply this week, reflecting higher consumption.
Dalian LLDPE futures have also rallied despite volatile crude oil prices and continued to support prices,” said a trader.
PP sentiment supported by low supply
ChemOrbis data also show that the weekly averages of homo-PP raffia and injection and PPBC injection offers are now standing at $1115/ton and $1185/ton CIF China, cash, respectively. If a slight firming in late June is disregarded, they have been mostly flat in the past five weeks.
“Import PP prices are flat due to limited availability from the overseas markets while there is also support from rising Dalian futures amid lower local inventories. Whilst the overall demand has remained limited with the lull season, there has been an uptick seen in buying activity this week, which has helped sentiment,” said another trader.
PP, LLDPE futures rise as demand pick-up seen
As of July 22, September LLDPE and PP futures on the Dalian Commodity Exchange posted weekly gains of CNY220/ton ($34/ton) and CNY283/ton ($44/ton), respectively. Firmer Dalian futures have pushed spot local PP and PE prices in China as well.
Despite volatility in energy values, Dalian futures have been driven higher by lower inventory levels inside China, reflecting demand pick-ups.
According to market sources, two major Chinese producers’ overall polyolefin stocks were reported to have declined by 45,000 tons on the week to 660,000 tons on July 22.
On a side note, concerns for the new capacities in China remain despite current low inventory levels. Around 1.3 million tons/year of LLDPE, 1.4 million tons/year of HDPE, and 1.9 million tons/year of PP are expected to become operational in the country in the July-August period.
On July 29, 2021, An Phat Holdings (APH) held an online event to reviewbusiness activities for the first 6 months of the year and review plans for the last 6 months of the year. This is an annual activity to assess the operation, production and business situation in the first and second quarters to propose plans to increase production in the second half of the year.
Attending the online event was the chairman of An Phat Holdings and the Board of Directors of APH and member companies in Hanoi, Ho Chi Minh, Hai Duong, Hung Yen, Yen Bai etc.
In the context of complicated developments of the Covid-19 epidemic, APH held the ceremony online, ensuring the prevention and control of the epidemic.
Reviewing the business performance in the first half of 2021, the Group assessed business and production activities for the first 6 months and plan to implement key projects of the year.
In particular, the Group’s Board of Directors emphasized a number of important activities in the past time such as the cooperation with Actis – the British Investment Fund in the field of industrial real estate, preparing for the construction the of PBAT An Phat manufacturing plant, boost export activities to the US, Europe… in the context of the world economy has gradually recovered.
Especially, in the context of complexity caused by Covid-19 and the fact that freight costs are rising in the world, the Group has still achieved positive results in both revenue and profit. The Group’s Board of Directors commended and awarded three member companies with the best achievements, namely An Phat Bioplastics, An Phat Complex and An Thanh Bicsol. The Board of Directors of the Group expressed their confidence in the leadership team of the subsidiaries and employees, encouraging all employees to strive for the best and putting more efforts in the coming period.
Mr. Pham Van Tuan (right), Deputy CEO of APH, General Director of An Phat Complex received flower from Mr. Dinh Xuan Cuong – Vice Chairman, CEO of APHMs. Dao Thi Bich (left), Standing Deputy General Director on behalf of An Thanh Bicsol received flower from Mr. Dinh Xuan Cuong, Vice Chairman, CEO of APH
In the plan for the last 6 months of the year, the Board of Directors requests that all subsidiaries focus on production and business activities to achieve the set targets, and at the same time ensure maximum safety for production and employees, strengthen the plan to vaccinate employees for Covid-19 prevention… This is the key for the Group’s success in 2021 and to set the stage for 2022-2023.
Actis – A leading global investor in sustainable infrastructure, signed a cooperation agreement with An Phat High-Technology Industrial Park Company Limited (An Phat Complex), a member of An Phat Holdings in which Actis invested more than USD 20 million in An Phat 1 Industrial Park to own 49% of the company’s shares.Additionally, the parties have signed a Memorandum of Understanding to form an RBF / RBW development joint venture program worth US $250 million.
An Phat Holdings (ticker symbol: APH) and Actis, a leading global investor in sustainable infrastructure, officially signed a development cooperation agreement that will focus on two areas: the development of industrial parks and ready-built factory and warehouse (RBF / RBW) for lease. Accordingly, Actis will invest more than US $20 million in An Phat 1 Industrial Park to own 49% of the company’s share. Additionally, the parties have signed a Memorandum of Understanding to form an RBF / RBW development joint venture program worth US $250 million.
Mr Pham Van Tuan (left), Deputy CEO of An Phat Holdings signed a cooperation agreement with Actis
Mr. Brian Chinappi, Partner and Actis’ Head of Asia Real Estate said “The industrial and logistics sector is consistent with our strategy to invest in sustainable infrastructure in growth markets in Asia and globally. We see compelling opportunities to pursue our build-to-core strategy in the industrial and logistics sector, reinforced by what we at Actis refer to as the 4Ds: Demographic shifts, Digital disruption, Deficient supply and Demand for yield. Vietnam’s industrial and logistics real estate market is poised for outsized growth given the sustained relocation of manufacturing base from markets like China, strong growth in domestic exports and imports, and an accelerating shift to e-commerce retailing. An Phat Holdings has a strong track record in this space, a clear development strategy, and like Actis, it is fully committed to sustainable development. An Phat 1 Industrial Park will be the beginning of our strategic partnership with An Phat Holdings and we are excited to jointly pursue industrial park and ready-built factory/ warehouse development opportunities on a large scale”.
Mr Brian Chinappi, Partner and Actis’ Head of Asia Real Estate
Commenting on the strategic cooperation, Mr. Dinh Xuan Cuong – Vice Chairman, Chief Executive Officer of An Phat Holdings expressed: “This is the first step in the long-term cooperation between An Phat Holdings and Actis, aiming to develop An Phat 1 Industrial Park into a leading, green industrial park in the North. For us, this cooperation provides funds and also provides An Phat Holdings with more resources to deploy to new projects and unlock potential of the industrial real estate segment. Along with that, we can improve reputation, product and service quality, and maximize operating capacity of An Phat 1 Industrial Park.”
Mr Dinh Xuan Cuong, Vice Chairman and CEO of An Phat Holdings
Actis is a leading global private capital investor focused on sustainable infrastructure. The firm has a strong emerging markets heritage across Africa, Asia and Latin America raising more than US$ 19 billion, in over 260 investments in the last 20 years. Actis connects the world’s leading institutional investors with investment opportunities in sustainable infrastructure sectors. Through deep operational experience, on the ground presence, and a values-led approach, Actis delivers competitive returns for its investors and transformational positive impact for the countries, cities and communities in which it invests. At present, the company has a team of more than 120 investment professionals, working across 17 offices globally.
An Phat 1 Industrial Park is a project of An Phat High-Tech Industrial Park No.1 Joint Stock Company, a subsidiary of An Phat Bioplastics (Ticker symbol: AAA) – member of An Phat Holdings. An Phat 1 Industrial Park is also one of its four new industrial parks in Hai Duong province, with an area of 180 ha in phase 1 with the charter capital of VND 375 billion. When it comes into operation, An Phat 1 Industrial Park aims to attract 50 – 70 manufacturing plants, creating jobs for approximately 12,000 workers, and reaching a 100% occupancy rate by 2024.
An Phat 1 Industrial Park
An Phat 1 Industrial Park’s goal is to develop Hai Duong’s leading high-tech and environmentally-friendly industrial park, which attracts investors from a wide range of industries, such as electronics, food and beverage (F&B), plastic, injection molding and supporting industry among others.
Currently, An Phat 1 Industrial Park is at the site clearance stage in preparation for construction to begin in July 2021. It is expected that the industrial park will come into operation and start commercial activities from the fourth quarter of 2021.
An Phat Holdings is the leading high-tech and environmentally-friendly plastic Group in Southeast Asia. Currently, An Phat Holdings owns two leading industrial parks in the North, An Phat Complex and An Phat 1 Industrial Park (a joint venture with Actis). In the next 5 years, the group plans to develop a large land bank in Hai Duong, a favorable location to attract foreign investment into Vietnam due to its high-quality workforce, supporting infrastructure and connectivity to major sea and airports, and close proximity to the Chinese border.
Europe’s PE markets have reversed the course after seven straight months of hikes to recede from their all-time highs on the back of aggressive import offers and growing resistance against inflated prices.
PE suppliers initially approached the market with rollovers to increases for European origins, with the support from the ethylene hike. However, they had to take a step back and apply discounts in a bid to stimulate buying interest as the month wore on.
Non-European origins stand well below spot ranges
Aggressive imports have served to cease the 7-month bullish rally in the spot market. Europe’s massive premium over other global markets attracted more import cargoes. Arriving imports brought some relief to the regional markets, which had been grappling with tightness amid production glitches and logistical hurdles impeding imports.
Non-European origins stand roughly €200-300/ton below the prevailing spot ranges, which adds to the pressure on the regional suppliers.
As for LDPE, Saudi material was offered at €1950/ton FD Italy, 60 days. Although not widely confirmed at the time of writing, a few buyers reported offers at or slightly below the €1900/ton FD level. Russian, Saudi, and US LLDPE C4 film was offered within the range of €1600-1650/ton with the same terms.
HDPE film offers stood at €1480-1500/ton for various origins, while Egyptian HD b/m was offered at €1420/ton. In Germany, US and Egyptian HDPE inj. deals stood at €1600-1650/ton FD, 60 days.
PE still at record-highs after drops
Spot PE markets on FD Italy/NWE basis still stand at all-time highs after coming off their peaks. Meanwhile, the pressure on LDPE was rather moderate compared to other grades. HDPE grades saw sharper decreases.
Despite the recent fall, the weekly average of LDPE and LLDPE prices on FD Italy basis remained 113% higher than the levels in November 2020, when the uptrend first kicked off. HDPE grades still stand nearly 90-100% above November levels, meanwhile.
Decrease expectations put buyers off
June drops failed to stir demand as buyers expect spot prices to retreat further in the latter half of the month and July. They refrain from committing to new materials, considering the fact that prices still stand at inflated levels. A converter said, “End customers have also been sidelined as they wait to see raw material decreases, which is crimping activity in general.”
On the evening of June 5, the launching ceremony of the national COVID-19 vaccine fund in Hanoi was held with the presence of the Prime Minister, representatives of leaders of government, enterprises and organizations.
Deputy Prime Minister Le Minh Khai (right) presented donation certificate to Mr. Pham Van Tuan – Acting Deputy CEO of An Phat Holdings (left)
Attending the event, An Phat Holdings was honored to receive the Government’s commendation as pioneer donor to the national COVID-19 vaccine fund. Representative of An Phat Holdings’ management, Mr. Pham Van Tuan – Acting Deputy CEO of the Group received certification for making contribution of VND 20 billion (~$ 851,000) to the national COVID-19 vaccine fund.
In the fight agaisnt COVID-19, An Phat Holdings wishes to contribute to the community, demonstrating the social responsibility of businesses for the country to quickly stamp out Covid-19.
See more pictures at the event:
An Phat Holdings attended the event as a typical enterprise making contribution to the national Covid-19 vaccine fundRepresentative of managements of An Phat Holdings, Mr. Pham Van Tuan – Acting Deputy CEO of the Group (left) received certification of donating VND 20 billion (~$ 851,000)
The blockbuster rally in India’s PVC market has run out of steam and import K67 prices have receded from their all-time highs this week in the face of rapidly reduced demand amid a second wave of deadly infections.
Import PVC K67 prices of overall origins were assessed $30/ton lower from last week at $1640-1700/ton CIF India, cash basis.
Despite the fall, the weekly average of PVC prices on CIF India basis remained 260% higher than the levels in May 2020, when the longest ever price rally first kicked off.
Import PVC prices CIF India
COVID-19 crisis likely to dampen pre-monsoon buying interest
India’s death toll from the pandemic has gone beyond 200,000 amid a shortage of oxygen, medical supplies and hospital staff. The deadly second wave has seen around 300,000 people tested positive for the virus daily which has overwhelmed healthcare facilities.
PVC players in the country reported that downstream manufacturing sectors are again facing disruptions since more states impose fresh curbs on public movement and transport to contain the spread of the virus. “We might face closures at ports due to partial lockdowns, and PVC supplies to the country might be disrupted,” a few players commented.
With the surge in COVID-19 cases yet to reach its peak, market players expect sharp pressure on PVC demand and prices in the near term. “We may not see the traditional demand increase ahead of the monsoon season this year due to the COVID crisis in the country,” noted traders.
India’s monsoon season lasts from June to September and stretches longer in some years. During that period, heavy rains impede both building construction and agriculture sectors while rough seas make loading and unloading at ports difficult.
Prices may remain under pressure despite still-tight supplies
Most players believe that PVC prices in India may remain under pressure over the near term given fading demand amid the second wave of the pandemic.
“We might see lower June offers from a major Taiwanese producer despite the ongoing shortage of availability across regional and global markets,” some commented.
The Taiwanese major lifted its May offers by $30/ton after applying a massive hike of $300/ton for April.
In Africa, regional markets kicked off February on a strong note as a continued tightness in supplies kept sellers’ stance bullish. However, demand was moderate-to-weak across the continent as COVID-19 related concerns remained as the key driver.
Total value of African PE Deals By year ($Bn)
Nigerian producer ops for hikes amid tight allocations
In Nigeria, a key market for polymers in Africa, February offers from a domestic producer were higher over January levels. Accordingly, the local producer ELEME announced increases of NGN40,000/ton ($105/ton) for PE grades and also increases of NGN110,000/ton ($289/ton) for PP grades.
These changes brought the producer’s February price list to NGN836,800/ton ($2199/ton) for PPH raffia and inj., NGN863,000-867,500/ton ($2268-2280/ton) for PPBC inj., NGN7800,000/ton ($2102/ton) for HDPE b/m, HDPE film, and HDPE inj., and NGN757,000/ton ($1989/ton) for LLDPE C4 film, all on ex-Port Harcourt City, cash not including 7.5% VAT.
“Market players are still waiting to hear more offers from the Middle Eastern before committing to any fresh purchases,” a converter said, adding that the local producer’s allocations were quite limited. ELEME was heard to be running at lower operating rates but this was not confirmed directly by the producer.
LDPE, PPH raffia-inj. prices at highest since 2015 in Kenya
New import PP and PE prices in Kenya, the largest economy in East Africa, remained on an upward trajectory in February. Saudi HDPE film and LDPE film grades saw monthly increases of $60-70/ton and $80-90/ton respectively while LLDPE C4 film offers increased by $100/ton over January. Offers for Saudi and Chinese PPH raffia and inj. materials were also higher by $90-100/ton from last month.
Accordingly, the latest prices in Kenya were at $1230-1250/ton for HDPE film and HDPE inj., $1280-1300/ton for HDPE b/m, $1200-1220/ton for LLDPE C4 film, $1520-1550/ton for LDPE film, $1420-1440/ton for PPH raffia, $1430-1440/ton for PPH inj., all on CFR Mombasa, Kenya, 90 days basis.
As ChemOrbis Price Index shows, these changes brought the weekly average of LDPE film and PPH raffia and inj. import prices to their highest since mid-2015. HDPE film and LLDPE film offers, meanwhile, stood at their highest in two and a half years.
“Supply remains very tight and some sellers refrained from offers this month. Demand is moderate but is a bit better than last month. COVID-19 situation is still worrying and the nightly curfew is in effect up to March 12,” a trader in Nairobi said.
Tightness brings hikes of up to $100/ton in Algeria
In Algeria, a key market in North Africa, LDPE film and HDPE film offers from a major Saudi supplier were $20-40/ton higher while LLDPE C4 film prices remained unchanged on a monthly basis. Saudi PPH raffia and inj. offers, meanwhile, increased by $70-100/ton from January.
The latest offers were at $1250/ton for HDPE film, HDPE inj., and LLDPE C4 film, $1500-1520/ton for LDPE film, $1420-1450/ton for PPH raffia and PPH inj., $1460-1470/ton for PPH film and PPH fibre, and $1580/ton for PPBC inj., all on CFR Algeria, 90 days basis.
“The availability for PPH, HDPE film and LLDPE C4 film is extremely tight. Demand is moderate and short availability has become a concern for market players as most of them are not able to source enough materials to operate their plants,” a trader in Algiers said.
Supply in balance as demand remains weak in S. Africa
In South Africa, February PE offers from the major Saudi supplier were $70-80/ton higher for HDPE film and LLDPE film, and also by $90-100/ton for LDPE film. The latest offers were at $1250-1280/ton for HDPE film, $1530-1560/ton for LDPE film and $1210-1230/ton for LLDPE C4 film, all on CIF, cash basis.
“Supply remains restricted but it is somehow balanced with demand. We think a market saturation point is near and sellers might not be able to push for higher prices next month,” a trader based in Durban said. As ChemOrbis Price Index shows, the monthly average of import PE prices in South Africa has risen by around 60% to 80% since mid-2020.
Today (25 Feb 2021) at the headquarters of the Vietnam Fatherland Front Committee of Hai Duong, the representative of the Board of Directors of An Phat Holdings (APH) handed over VND 20 billion (~ $851,000) support to the provincial government to buy vaccines for residents of Hai Duong in the fight against Covid-19. Previously, in 2 times of support on February 1 and February 17, APH donated VND 11.35 billion (~$482,000), including cash, necessities, and equipment … to the Hai Duong provincial government.
Thus, only in February 2021, the total value of VND 31.35 billion (~ $1,3 mil) was donated by APH in Hai Duong’s Covid-19 fight. Together with 3 times of support with cash and necessities, An Phat Holdings in coordination with Hai Duong’s Youth Union, individuals, organizations, businesses… launched campaign “Relief and rescue agricultural products of Hai Duong”, rescued 1,000 tons of farm products.
Hai Duong Province’s Leader received VND 20 billion (~$851,000) from the representative of An Phat Holdings, Mr. Pham Van Tuan – Acting Deputy CEO.
Present at the headquarters of the Vietnam Fatherland Front Committee of Hai Duong province, the representative of the Board of Directors of An Phat Holdings, Mr. Pham Van Tuan – Acting Deputy CEO of the Group directly handed over VND 20 billion (~$ 851,000) to Hai Duong’s government representative to support the implementation of buying Covid-19 vaccine for the resident of Hai Duong. Hai Duong Province’s Leaders directly received support from APH and expressed appreciation to the Board of Directors and An Phat Holdings’ employees.
This is also the biggest donation that An Phat Holdings has donated to the representatives of Hai Duong Province in Covid-19 pandemic prevention. Mr Pham Van Tuan – An Phat Holdings’ Acting Deputy CEO shared “In the situation of urgent need to have vaccines, helping people feel secure and helping the government to control the pandemic early is not only the responsibility of An Phat Holdings but also other organizations and individuals who want to contribute. All the support of An Phat Holdings from human or material resources comes from the spirit of unanimity, joining hands toward Hai Duong, hoping the province will quickly overcome the pandemic.”
Hai Duong Province’s Leader expressed appreciation for An Phat Holdings’ support
Hai Duong is the key production area of An Phat Holdings with 10 plants, many subsidiaries and is where 3,500 employees are living and working. Therefore, the Board of Directors and more than 5,000 employees of the whole Group are always ready to accompany and share all difficulties of Hai Duong in any period and at any time.
Along with the community support, An Phat Holdings always strictly complies with preventive measures at all factories, production facilities and offices, perform Covid-19 tests on all employees for ensuring “Safety for Employees, Safety for Production”.
Previously, in early 2020, since the outbreak of Covid-19 in Hanoi, An Phat Holdings also donated compostable products to 300 residents and soldiers on quarantine duty in Truc Bach area (Hanoi) and donated 5,000 medical masks and hand sanitizers to Vietnam Embassy in the United States.
2020 is not ending as many expected in the European polyethylene (PE) and polypropylene (PP) markets, and sentiment has changed significantly in the last few weeks.
2020 was expected to be a poor year, as imports of ethane-based PE, mainly from the USA, were expected to arrive in greater supply.
In fact, there was an increase in PE and PP packaging, caused by strong buying as the first wave of the coronavirus pandemic sent buyers rushing to the shops.
Other industries were shut down, such as automotive, where 10-11% of PP is used.
By the second half of the year most applications were returning to normal. Automotive has fared better than expected, and packaging is back to normal levels. Those involved in health and hygiene have remained good throughout.
The appliances sector also has recovered beyond expectations in H2 2020, including both small and large appliances.
By the end of the year, a slowdown in polyolefin buying is the norm, with the odd special deal thrown in to boost sellers’ volumes, but this has not been the case in 2020.
Low prices in Europe, both for PE and PP, have meant that exports became a strong feature of the fourth quarter of 2020, leading to a tight market, particularly in the PP sector. Hurricane Laura prevented US imports, which added to the tightness, generating export opportunities to Latin America, among other destinations.
Rather than December being a slow month peppered by offers of cut-price material, prices of both PE and PP have jumped, particularly for low density polyethylene (LDPE) and PP.
The spread between the ethylene contract and PE has widened in 2020, from a very low base in 2019.
Not only are prices rising amid tight supply, but some producers are already warning buyers that the upward trend could well continue into January.
The recent price hikes in Europe are shortening the gap with Asian prices after months of European stagnation, while corresponding prices in China were driven by stellar domestic demand, especially since mid-Q3 2020.
Buyers argue that December and January are short months. There may yet be time for some of the production issues contributing to the tightness to go back to normal, easing the short supply.
Imports are not expected to resume until well into the first quarter, according to many sources, however, and this will affect the market.
When fresh imports are expected to reach Europe, from late January 2021, domestic demand in China will decelerate ahead of the Lunar New Year holiday period. This will probably help to realign prices in the regions, according to ICIS analytics.
Annual contracts for 2021 are under discussion at this time of year, and while the current tightness favours sellers, the second half of 2021 is not expected to remain as strong, so some pragmatism is entering the debate. Contracts are by no means all done, but several buyers said they have managed to achieve discounts of a couple of percentage points over 2020 for PP.
PE is expected to be more readily available, as global supply increases.
In terms of PE demand, ICIS analytics expects a slow but constant recovery during 2021, accompanied by expectations of improved economic conditions in Europe and globally. However, the PE market in 2021 could face a strong supply increase as effective PE capacity globally is expected to increase by 6.5% in 2021 versus 2020. This is likely to lengthen the 2021 supply and demand balance.
Effective global high density polyethylene (HDPE) capacity, in particular, is expected to increase by more than 8% year on year in 2021, while global linear low density polyethylene (LLDPE) and LDPE capacities are expected to increase by 7% and 3% respectively, in the same period.
PP supply will increase considerably in 2021 and especially in Asia, where 7.7m tonnes/year of new capacity will be brought onstream, corresponding to 10% of the PP volume processed globally in 2020. The effect on pricing is expected to be felt on the markets especially in the second half of the year.
The global ethylene market should show signs of improvement throughout 2021, according to ICIS analytics, on the assumption that the worst of the coronavirus pandemic impact will be over. Uncertainty over economic growth and distribution of coronavirus vaccines, as well as their effectiveness, might significantly weigh on supply and demand fundamentals. European ethylene is expected to remain long as supply increases.
Globally, propylene demand should increase at a higher average annual growth rate than GDP in 2021, but much depends on how global economies fare.
PP supply will also increase and no tightness is expected, although PP is not expected to see the same oversupply as PE.
Ultimately demand in Asia, and more particularly China, will have a significant impact on both PE and PP trends in Europe in 2021.
Total planned capacity additions in 2019 – 25PP capacity additions exceed demand growth in the short-termPE – Major world announced capacity changes 2021PP – World Annouced New Capacities (2021)
