Packaging
Plastics
Plastics
Price movements (monthly)
LDPE
Month-on-month Change
Year-on-year Change
HDPE
Month-on-month Change
Year-on-year Change
PET
Month-on-month Change
Year-on-year Change
PP
Month-on-month Change
Year-on-year Change
PVC
Month-on-month Change
Year-on-year Change
PS
Month-on-month Change
Year-on-year Change
The trend of falling plastics prices in China continued throughout April, with supply reportedly outpacing demand.
Market sources expect an uptick in demand next month, but feedstock prices continue to drag plastics prices downward.
Plastics
Other price drivers
↓ Ethylene
Market sources reported bearish market sentiment for ethylene throughout April as the uncertainty of tariffs impacted trade. Demand was reportedly weak, and a declining naphtha price weighed on the market.
↓ Paraxylene
Paraxylene prices continued to fall throughout April driven by sluggish demand. Some market sources had anticipated an uptick in prices in April as the peak demand season approaches, but this has not materialized.
↓ Propylene
Propylene prices across the three major economies declined throughout April, but not as severely as in the ethylene market. Supply was ample, but order levels were depressed.
↓ Crude Oil
Crude oil prices continued to fall throughout April, chiefly driven by tariff-related demand concerns. Additionally, OPEC increased output by significantly more than expected.
However, a marked rise in oil imports by China limited the price decline, but market sources reported a predominantly bearish mood.
↓ Logistics
The shipping 40ft container composite index fell by 6% m-o-m to $2,206 per unit in April. However, the index was relatively stable during April. Demand for shipping remains weak, but market sources believe that the index reached the bottom at the beginning of April and has no room to decline further.
→ Macroeconomic Environment
In March, the US CPI was 2.4% on an annualized basis, down from 2.8% in February, falling 0.1% m-o-m. The main driver behind the deceleration was energy inflation, which was -3.3% y-o-y. In March, inflation in the Eurozone decelerated to 2.2% on an annualized basis, falling from 2.3% in February. Unprocessed food and services subindices continue to accelerate, registering 4.2% and 3.5%, respectively. In March, China was again in deflation, with the CPI reported at –0.1% y-o-y. Although the result constituted slower deflation than the 0.7% in February, market players are worried about persistently poor demand and the potential damage of the 145% tariffs on China by the US, despite the exemption for smartphones.
Plastics
Market sentiment for the month ahead
Uncertainty and Tariffs
The implementation of tariffs by the US and the countermeasures by China have caused significant concern among market players. To that end, sentiment is neutral, especially amid increased supply uncertainty for the months ahead and the coming of the peak demand season.
↑ Supply Uncertainty
Although the fundamental situation remains largely unchanged, the implementation of tariffs by the US and the further uncertainty have created some panic within supply chains within the plastics industry, according to market sources.
↓ Muted Demand
Demand remains largely weak, especially in the US and China, where there remains great uncertainty over tariffs. According to market players, demand will steadily increase with the coming of summer.
↓ Falling Production Costs
Feedstock prices declined across all three major economies, with decreases in ethylene and paraxylene prices being particularly pronounced. As a result, production costs were lower and are having a bearish impact on the plastics market.
→ Tariffs
The 145% levy on Chinese goods by the US and the 125% reciprocal tariff are severely impacting Chinese importers of plastics, and exporters to the US. The ethane market was particularly vulnerable as large quantities are imported into China from the US. Ethane is a derivative of natural gas and used in the production of various grades of polyethylene, an important material for packaging and construction. In recent days, market sources reported that the Chinese government waived tariffs on imports of US ethane due to the severity of the situation.
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