Wikiplast

A report on Petrochemical products market, 2nd week of July 2019

A growth to just above the Harsh recession threshold

According to Wikiplast, sparks of increasing prices in domestic markets, along with the increasing amount of trades in stocks market, can be viewed as promising signals toward an improved situation. However this statistics might just be false optimism and have no considerable eventual impact on the undesirable condition of the market.

The amount of 50,000 tons is considered as a threshold in the market, below which the markets enters the condition of harsh recession.

The amount of trades in the market have been below this threshold for weeks now, but last week it increased 25% to reach the amount of 50,600 tons. This is not a desirable condition yet, since the average weekly trade was 62,800 tons last year.

This growth is due to the increase in the base prices for many grades in stocks market, while the amount of offers had a 4% increase as well.

The concern about further increase in stocks prices can be considered as a reason for growth in the amount of trades. However, this growth is an inevitable sign of attraction for production.

It is not yet safe to presume a definite uprising trend in the market, but the slight increase in some grades can be seen as a growth in demands.

Maybe this is the first signal for the end of the recession. Although the data does not overlap with other pieces of data, it can still be considered an optimistic sign, especially now that most markets are desperate for good news.

The amount of trades might even experience a decline in the next week, but it will most probably not be a considerable one.

The domestic market saw a rise in the prices last week, mostly due to the rise in governmental dollar exchange rate. The other reasons for that could be the low inventory stocks and the limitations of mediating dealers’ activities.

These elements may still be in place next week. It is therefore possible to witness the same rising trend in the prices.

The lowest recorded governmental exchange rate is 115,000 IRR which is 1.4% higher than the previous rate. According to this fact, an increasing trend can be anticipated for some grades in the following week, though the growth is not thought to be very considerable.

Product groups which demonstrated an increasing rate in the stocks markets are most likely to experience a price growth in the coming week.