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Throughout the year, prices experienced a consistent decline, exhibiting regional disparities and occasional fluctuations. The substantial decrease in the price of propylene, the principal raw material for PP, exerted notable downward pressure on overall PP prices.
Oil prices then soared in 2021 and early 2022 due to the recovery in global demand and the Russia-Ukraine war. These oil price fluctuations caused polypropylene prices to be quite volatile throughout the period.
The COVID-19 pandemic caused significant disruptions to global supply chains, including those for polypropylene. This led to shortages of the material and higher prices.
Simultaneously, certain propylene units plan to resume operations, suggesting limited potential for further upward movement in propylene prices, indicating a more robust pricing trend.
Downstream participants actively engaged, leading to a decrease in on-site inventory. Simultaneously, upstream players actively raised prices. This week, crude oil experienced fluctuations with minimal impact from the news.
Certain months saw propylene prices hovering around the $850/ton mark, offering a semblance of predictability for manufacturers. 2023 wasn't a year of consistent decline, it offered glimpses of stability amidst the volatility, providing cautious optimism for the future.
The Ukraine war and subsequent global energy crisis sent crude oil costs into overdrive, making propylene production significantly more expensive. This translated to record-breaking prices for consumers, particularly in the first half of the year.
In 2021, propylene prices embarked on a volatile journey. Pent-up demand collided with ongoing supply chain disruptions, creating erratic pricing.
While some sectors faced challenges, the surge in demand for essential goods like medical supplies and food packaging, both heavily reliant on propylene derivatives, propelled prices upwards.
Additionally, the secondary TMT prices continued to decline, adding pressure on primary players. Despite expectations for further price reductions, primary mills chose to maintain stable offers.
The gap between primary and secondary markets is narrowing, and with a rising demand for primary materials, the market is poised for potential growth.
There was a decline in pricing as the Iron ore and coal prices are also trading at reasonable rates, thereby lowering steel pricing in the month of May’23. As of July 2023, as compared to July 2022, TMT rebar prices were at a 24-month low.
Prices of structural steel saw an increasing trend in September 2023. This increase was seen due to the increased price of iron ore and other raw materials. In early Dec’23, rebar prices started declining due to subdued demand.
The macroeconomic condition regarding the hike in the global inflation rate provoked buyers to shy away from placing large orders. The increased extraction and energy cost has been implying a downward pressure on the Magnesium Alloys market.
Factors such as rising interest rates, supply shortages of Aluminum and Magnesium feedstock, disruptions in domestic Magnesium plants, and higher raw material costs have contributed to the price hike. The Chinese auto sector's profitability and government policies boosting transaction rates have also driven increased demand from the downstream auto parts industry.
The cumulative year-on-year export decrease for the entire year amounted to 21.5%.
However, factory profits from current magnesium prices are near their bottom, suggesting limited potential for further price reductions. Consequently, the expectation is for magnesium ingot prices to remain stable, reflecting a delicate balance between excess supply and minimal room for further decline.
However, the industry may face shortages and price increases in January 2024 unless additional capacity is introduced. Recent challenges in the chemical industry, marked by dwindling raw material supplies and inflationary pressures, have been exacerbated by supply and demand imbalances, causing disruptions in the availability of caustic soda, a vital component for chemical and food manufacturers.
Q3 witnessed a rise fueled by demand, disrupted supply chains from China, and increased import costs in Brazil. Q4 maintained resilience due to constrained supplies, transportation issues, and rising demand from the Alumina industry in Brazil. Volatility, import challenges, and downstream demand influenced a December price surge.
June witnessed another upswing, influenced by decreased downstream demand, force majeure events, and the USA's high inflation rate. September remained stable,with declining prices driven by lower demand and impending plant shutdowns.However, by December, prices plummeted due to muted demand, market uncertainties, and increased supply, prompting a Force Majeure by Covestro.
While a gradual recovery is anticipated, especially in emerging markets, concerns about ongoing inflation in Europe may impact industrial and commercial energy needs, affecting natural gas consumption.
Despite initial constraints, a tightening supply/demand balance later in the year may lead to higher spot gas prices, with a projected full-year average of $3.50/thousand cubic feet (mcf) on NYMEX.
The U.S. benchmark Henry Hub spot price, a key indicator, averaged approximately $2.80 per million British thermal units during the winter heating season, a significant decrease from earlier projections. This drop was primarily attributed to record-high U.S. natural gas production in November 2023, reaching around 105 billion cubic feet per day and resulting in market oversupply.
The year also witnessed the influence of regulatory changes and environmental policies, shaping production and consumption dynamics in the natural gas sector.
This downward revision is attributed to expectations of subdued global growth, which is anticipated to limit demand. Despite this, ongoing geopolitical tensions are seen as a factor that could provide support to prices.
Additionally, theongoing Israel-Hamas war has contributed to the stabilization of oil prices.Countries such as Saudi Arabia and Russia have justified these production cutsas a precautionary measure aimed at maintaining the stability of the oilmarket. Crude oil prices have been influenced by various factors, including astronger US dollar and the recent increase in US bond yields.
However,the latest meeting conducted by OPEC+ proved to be disappointing for those expecting an upward trend in prices. Investors perceived limited impact from the announced supply cuts on the oil markets, contributing to the subdued response in crude oil prices.
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