RALEIGH, North Carolina, May 20, 2020 /PRNewswire/ -- The coronavirus pandemic has had unprecedented consequences in industries worldwide, devastating global supply chains, with the impact being felt in the chemical commodities market as well. Demand for some of the major polymers and petrochemicals have taken a hit with numerous countries under lockdown.
The impact of the shutdowns and drop in consumer demand is likely to take a few months to scale back to normalcy, according to Beroe Inc, a procurement intelligence firm.
At a global level, the demand for petrochemicals have taken a hit leading to surplus supply of naphtha in the Asian market, leading to naphtha cracker spreads entering a negative zone in Asia. The coronavirus outbreak is likely to result in a lower petrochemical supply in China as several companies cut their production amid rising inventory and a possible decline in consumption. India is a net importer of PVC and can reduce supply chain risks associated with logistics and shipping issues in Chinese ports by looking into other key areas, such as South Korea, Japan, etc.
Beroe, which is based in North Carolina, further stated that procurement experts can access this report on its market intelligence platform Beroe LiVE: live.beroeinc.com
With the COVID-19 pandemic, growing demand for face masks, disposable syringes, and other medical protective equipment is expected to boost the supply of transparent polypropylene (TPP) grade and polypropylene (PP) fibre grade, as well as ABS for keyboards, gaming consoles, and sheet ABS (for protective barriers). Specialty chemicals used by automobile and construction industries will continue to witness a huge demand drop.
Rubber chemicals, dyes and pigments, and carbon black are likely to face supply issues over the coming months. In contrast, the availability of feedstock petrochemicals like Ethylene, Benzene, Styrene will see a surplus in the market. Factory shutdowns, retractions at ports and lockdown of a few cities are likely to increase the lead times. Increasing restrictions in individual countries and markets are leading to difficulties in transportation.
Although medical grade of PVC resin has been impacted more as an end-use sector, due to applications for blood bags, tubes, and medical packaging, these sectors contribute to only approximately 1 percent of the overall PVC demand, and hence, a strong surge in buying momentum may not be expected.
The prices of PCs decreased by 7 percent during Q1 2020 on a Q-o-Q basis, due to weak demand and large supply. The prices are expected to witness a further decrease of 13 percent during Q2 2020 owing to the downtrend in upstream crude prices and weak demand conditions.
The U.S. ABS market sentiments have been impacted by a pause from major auto manufacturing companies, on account of the COVID-19 pandemic. In Europe, logistics issues have made Asian imports more difficult than regional deliveries.
The market for natural latex witnessed weak trading activities for both demand and consumption as a result of the global market slowdown, as the world fears the economic impact of COVID -19 pandemic.
A slow recovery in downstream demand for acetone is expected in the near future, in response to the overall low plant run rates, despite a mild rally fuelled by resuming transport conditions.
IPA prices in China and Asia increased as demand picked up from the pharma segment, owing to the coronavirus outbreak. Supply is expected to remain tight in China owing to various plant shutdowns and reduced operating rates in the wake of the COVID-19 pandemic.
The research methodology adopted for the report included:
- Experts with twenty years of domain experience
- Interaction with buyers
- Inputs from supply chain partners
The recent fluctuations in upstream crude oil valves have added more uncertainty for domestic buyers, while downstream demand from polyester fibre and Engineering plastics remained uncertain. As crude oil prices decline, prices for resins, elastomers and immediate crude derivatives are likely to come down. However, prices for specialty chemicals are expected to witness a hike in the short term. In Asia, some of the downstream applications are supporting the overall demand for PET, such as using fibre grade PET chips for non-woven applications to make masks.
The report also includes:
- Industry-Level Impact – Chemicals
Major Risk Factors:
- Industry Risk Drivers,
- Risk Probability
- Raw Material Supply
- Lead Times
- Price Volatility
Supply–Demand Dynamics Chemicals:
- Nylon and ABS
- Natural Latex
- Plant Status
About Beroe Inc
Beroe is the world's leading provider of procurement intelligence and supplier compliance solutions. We provide critical market information and analysis that enables companies to make smart sourcing decisions—leading to lower costs, greater profits and reduced risk. Beroe has been providing these services for more than 13 years and currently works with more than 10,000 companies worldwide, including 400 of the Fortune 500 companies.
To learn more about Beroe Inc., please visit: http://www.beroeinc.com
SOURCE Beroe Inc.