Polymer Industry Tumbles; Oil Price War and Covid-19 Worst Encounters yet!

Polymer producers around the world are forced to curtail their production activities as the combined blow of Coronavirus and crude oil crash has hard hit the sector. Prices of Polyethylene and Polypropylene in the international markets have followed a downtrend as feedstock ethene, ethane and propylene witnessed downward pressure due to sudden slump in crude oil. The oil price war initiated by Saudi Arabia has brought a huge downturn in the oil industry which is anticipated to impact almost all the economy driving sectors of the world.

When China is resuming factory operations, the unprecedented campaigns launched by the governments in rest of the countries to prevent the spread of the contagious virus have almost put a halt on the economic activities. Asian refiners are curtailing production sensing muted demand from the downstream polymer industry.

Demand Outlook

Demand for polymers being used in food packaging, healthcare products and sanitizers is high as consumption trends boost due to coronavirus outbreak. Polypropylene demand has plummeted due to shutdown of automobile plants across several countries although demand for non-woven PP has boosted appreciably. 

Moreover, demand for Polyethylene Terephthalate (PET), which is majorly used for making bottles for sanitizers and beverages show a positive growth outlook. LLDPE and HDPE markets remained almost muted throughout March due to feeble demand prospects and cheaper feedstocks. Analyzing the complete scenario, growing demand from medical and healthcare has slightly eased the continuous decline being faced by polymer and resin industry, but it is certainly not enough to uplift prolonged dull market.