August is a slow month in nearly all polymer markets this year with many holidays and seasonal factors coinciding, as per the pricing service of ChemOrbis. Despite slowing market conditions, polymer markets remain bullish across the globe, which is mainly attributable to the fact that energy markets continue to gain ground.
Europe shows a traditionally slow performance in August as regional players mostly halt their operations, particularly in the second half of the month for summer holidays.
Many Muslim countries in the Middle East, North Africa along with Southeast Asia are also facing slow August trading this year due to Ramadan, which ends as of this Sunday with a three day long holiday, while the majority of players will prefer to extend it until the last week of August.
Not only the holidays, but also some seasonal factors are contributing to the overall August lethargy. Typhoons have hit China and Taiwan recently while the monsoon season is having its impact on several South and Southeast Asian countries. The Philippines has been suffering from floods while Vietnam and Thailand are dealing with heavy rains.
All of these factors listed above are, needless to say, weighing down on demand this week, resulting in less appetite for players to take a step forward.
Nevertheless, polymer markets are retaining their strength across the globe despite the lack of demand.
This is mostly because energy markets have been steadily firming up since the beginning of August. Crude oil futures on NYMEX have not settled below the $90/ton threshold since August 1 while they have moved above $94/bbl recently. In the naphtha market, Asia has gained $88/ton on average while Europe has posted an increase of $107/ton since the early days of August.