CHEMICAL MANAGEMENT

The multi-million dollar polymers opportunity: continued big regional price differentials

JOHN RICHARDSON | June 29, 2021

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POLYMER BUYERS outside northeast (NEA) and southeast Asia (SEA) have a big opportunity to save  millions of dollars on  procurement costs during the rest of this year through purchasing more from the two regions.The opportunity has arisen because I believe that NEA and SEA polymer prices will remain very cheap relative to most of the world until at least the end of 2021.

NEA comprises China, Japan, Taiwan and South Korea. Our definition of the SEA region is Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.NEA and SEA producers can also make a lot of money by constantly monitoring and acting on strong arbitrage opportunities in other regions.

As supply disruptions in the US look likely to continue, Europe and South & Central America seem particularly good opportunities for both buyers and producers.Before we discuss why I see NEA and SEA remaining cheap relative to most of the rest of the world until at least the end of the year, let us consider in more detail the size of the prize, starting with the resin buyers.

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