Will restocking activity significantly boost polymer prices in Q3 2023?

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Restocking Activity's Impact on Polymer Prices in Q3 2023 Remains Uncertain

Consultancy Chemical Market Analytics (CMA) forecasts a potential rise in polymer and monoethylene glycol (MEG) prices during the third quarter of 2023, driven by restocking efforts following a period of destocking in the second quarter. Similarly, prices for polyolefins, comprising polyethylene (PE) and polypropylene (PP), may have reached their lowest points and could see a recovery in the same quarter. Mid-July 2023 data indicated that PE, PP, and MEG prices were at or below their late-2022 levels.
Potential for Chinese Restocking Demand

A key factor influencing the market is the anticipated restocking activity in China during the third quarter of 2023. This demand is expected as the country prepares for the year-end holiday shopping season. This preparatory purchasing could contribute to increased demand for polymers and related chemicals.
Limited Price Recovery Expected Due to Market Conditions

Despite the prospect of restocking, CMA expresses a cautious outlook regarding the extent to which PE and PP prices will benefit. The consultancy highlights that ample global production capacity and a generally weak demand environment are likely to constrain any significant price recovery. This suggests that even with increased buying activity, the market may struggle to absorb the existing supply.
CGS-CIMB's Perspective on Petronas Chemicals Group (PCG)

CGS-CIMB Securities believes that Petronas Chemicals Group (PCG) has been selling polymers from its Pengerang facility at prices below market rates. This strategy is reportedly being employed to manage output during the plant's commissioning phase. Such pricing practices could potentially exacerbate PCG's commissioning losses in the second and third quarters of 2023.

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Will restocking activity significantly boost polymer prices in Q3 2023?

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