In the third quarter of 2023, the North American market experienced a slightly bullish trend in BOPP Films prices, witnessing an increase of approximately 3.5%. This uptick was primarily driven by a surge in the costs of the raw material, Polypropylene, which escalated by over 2% in the region. The demand from the downstream packaging industry remained steady, but local purchasing sentiments were constrained due to the Federal Bank’s ongoing interest rate hikes. In September, the core Consumer Price Index (CPI) inflated, and production costs rose alongside sustained demand, posing challenges for suppliers in maintaining sufficient supplies to meet current demands. Furthermore, the heightened prices of upstream Crude Oil, soaring by nearly 24% in the third quarter, added to production costs. The international market also witnessed strong demand for BOPP Films, as prices increased in key Central and South American importing markets.
Throughout the third quarter of 2023, the Asian market saw a bullish trend in BOPP Films prices, marking an increase of around 3%. This rise was attributed to the escalating prices of feedstock polypropylene, which surged by almost 5%. The downstream packaging sector maintained a consistent demand, contributing significantly to the upward trajectory of prices. Additionally, the surge in upstream Crude Oil prices by approximately 24% in the same quarter further propelled product prices. As purchasing sentiments improved, especially during the Mid-Autumn Festival, existing supplies proved inadequate to meet the rising demand. Moderate production rates failed to generate enough supplies for the market, leading to strengthened international export offers, particularly in the Southeast Asian market.
The European market experienced a marginally bullish situation in BOPP Films prices, with an appreciation of more than 2% during the third quarter of 2023. This increase was driven by rising costs of feedstock Polypropylene, which escalated by almost 2% in the European market. The heightened production costs, coupled with a nearly 24% increase in upstream Crude Oil prices, resulted in challenges for suppliers. Constant demand from the packaging industry was observed as trading activities normalized across Europe. However, issues in the supply chain emerged, with the European railway system requiring extensive maintenance and facing a shortage of staff. These factors, along with high inflation rates, hindered the circulation of sufficient inventory, leading to further price increments. Suppliers exercised caution to prevent an oversupplied market, and current BOPP Films prices are significantly influenced by Polypropylene prices, expected to rise as the third quarter concludes.
In the South American market, BOPP Films prices exhibited a robust bullish trend, driven by increased production costs in the exporting North American market due to rising prices of feedstock Polypropylene. The Federal Bank’s interest rate hikes led to higher factory gate charges, importing costs, port-leaving costs, and transportation charges. Port congestion in South America further delayed product procurement, exacerbating issues in the supply chain. Deliberate efforts by major suppliers in South America to create a shortage amplified product prices as inventories from the exporting North American market dwindled. The escalating prices of upstream Crude Oil also contributed to the overall hike. Despite constant demand from the downstream packaging sector, rising upstream and feedstock costs, and limited inventories from North American ports, BOPP Films prices experienced a sharp increase.
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