The market for polymers is experiencing good days now. The relative rise in supply volumes on the stock exchange market (IME), along with the lack of tangible growth in base prices as well as the close proximity to the end of the year, and, of course, increased demand for final products and polymeric materials, led to the growth of attractive polymers.

In the last week, the trade volume of polymers rose by 8% and reached to nearly 76,000 tons, the highest since the end of last Iranian calendar year (1396). This point should be considered very important because it shows that the market is strongly encouraged to buy raw materials in a situation where the attractiveness of mediators and speculation has declined slightly, indicating the favourable situation of production in the downstream industries.
On the other hand, due to the fluctuation in the US$ market value in recent months, the imported material market has either been limited or can’t be found easily because of limiting its supply. The same has provided attractive opportunities for domestic converters to boost their production volume in order to feeding domestic markets as well as regional markets and to record new successes. This situation is evident in the fact that the free market for polymers benefits from a relative relaxation, and given the high volume of trade in polymers in the last 4 weeks, we see a sufficient supply of raw materials from the market, which has so far prevented from rise in prices, even with the rise of base prices by PDID (as we reported last week).
During last week, we saw a 9% increase in the supply of polymers, but the volume of demand fell by more than 2% in the stock market. This signal suggests that the probability of low supply of attractive grades should be taken in consideration, because, the demand rejection should have a logical reason. Of course, if the total supply volumes are high, the market will not tend to compete for higher volume purchasing and price growth, and this signal will limit the attractiveness of the influx of demand. As a typical example we may consider some materials like film grades of HDPE, PET and PET bottles, plus PP for which we saw a decline in trading volumes compared to the previous week, which could justify a decline in demand in the stock market. Of course, other grades in this area were faced with the growth of trading, which is an important driver of price growth, but the attractive grades mentioned have their own particular conditions.

The following table shows the total trade volume for last week (Feb. 2nd-8th, 2019) at the IME hall in 156 times of deals. All prices are in Iranian Rials.