As summer wanes and autumn draws near, storm clouds continue to gather on the horizon and creep closer with every new record for the Dutch TTF gas price. It is not a hyperbole to say that this winter looks quite harrowing for many commodity marketplaces, and Europe is ground zero for what on paper looks to be a seismic event that could lead to governments there deciding between heating homes and businesses operating. Let us hope the doomsday scenarios do not come to pass. Regardless, the situation sets up three themes that I think define the rest of 2022 and likely start the narrative that will be 2023:
Chemical Connections
Sustainability challenges posed by recycled plastic inflation’s long game
The packaging supply chain needs to come to grips with inflation, but in a context few are considering at the moment – the sustainability movement. Escalating prices for recycled plastics were expected. Escalating prices for everything else was not, and that poses new challenges for those who transact in the plastic supply chain and those tasked with steering their companies’ plastics circularity objectives.
Volatile resin markets require rethinking 2022 contracts
Negotiations on annual contracts are under way for many in the plastics supply chain, and the market conditions looming over the bargain table have rarely been as complex and vexing. After a year of ever-increasing resin prices on the back of strong demand and the potent cocktail of supply and logistics issues, diverging market pictures […]
Global PP market divide may rebalance painfully
They say a picture is worth a thousand words, but I can prove the one here is worth 1,034. How so? Because my colleague John Richardson wrote that many in his excellent 5 September blog on the yawning gap between NE Asia and US polypropylene (PP) prices, and the reasons behind that. Without knowing those […]
Market danger set to lurk in the Gulf
Time to keep a watchful eye on the Gulf of Mexico. Apropos of the approaching peak of the Atlantic hurricane season, there is growing chatter among meteorologists about the possibility of a significant storm building in the southern Gulf’s Bay of Campeche by early next week, with the possibility that this could evolve into a […]
Chemical, resin plants may be hurricane-ready, but markets are not
Forecasters of this year’s hurricane season expect above-normal activity, and so far that seems on point with the naming this week of the Atlantic’s fourth tropical system. The active start also should bring to mind the precarious state commodity chemical markets and their participants find themselves in right now. Should the Texas-Louisiana coast not navigate […]
Logistics making inflation worries more than transitory
How bad are things on the logistics front? A COVID-19 outbreak at the Port of Yantian in China is causing container ships to back up or to be diverted as services and deliveries are delayed. The port is critical to exports from China’s Pearl River Delta, a major manufacturing center in the world’s major manufacturing […]
Fundamentals will matter to plastics markets again, and be careful when they do
Supply tightness in key commodities such as chemicals, polymers, lumber and steel has been a major story of 2021, but increasingly logistics are taking centre stage in this story as production of many materials ramps up only to find difficulties in moving products downstream to customers. Shortages seen in the plastics and chemicals markets are […]
Can consumers afford the price rises commodities are portending?
Get ready to open your wallets a bit more. Whether you are in the chemical business, the services industry or the business of feeding people, the cost of business continues to rise. As those costs rise, so too are the number of questions surrounding the emergence of inflation into economies hoping to emerge from the […]
Immense challenges facing chemical, polymer procurers
Mid-February’s prolonged freeze on the Texas-Louisiana coast has juiced up market commentary as much as it has most petrochemical and polymer pricing. Just days after the storm, a polyethylene (PE) trader said that the freeze’s effects on regional and global supplies would be “worse than Hurricane Harvey”. Perhaps so, because not long after, a PE […]
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