The Plastic market has started a pattern of sharp price increases

Time:2021-02-26

The Plastic market has started a pattern of sharp price increases,

SPC Production cost will increase significantly in 2021!

Crude oil stands at $60/barrel gate: Just increase for the price

Crude oil as the source of the plastics industry chain, the continuous increase in prices recently also provides a strong support for the increasing spread of the plastic market. SPC floor with the plastic as the main materials has also been affected by this tide, which will usher a new price increase in the next period of time.

Recent international oil price trend

After a year, international oil prices were affected by the rise in the international crude oil market. Crude oil chemical varieties rose at the forefront. Oil production plunged nearly 40% by freezing oil well operations due to the severe cold in the United States. According to traders and industry executives, crude oil production in the United States has decreased by more than 4 million barrels a day. The U.S. waterway for overseas delivery of crude oil was cut off for most of this week. That time New York crude oil prices continued to hit a new high of $62 per barrel during trading in Asia, a record high of one year. While Brent crude oil futures rose to $64.68 a barrel on Wednesday. The increase of oil price caused by weather is the main reason for the increase of SPC production cost.

Price increase of Crude oil

Price increase of Crude oil

Rising in crude oil price lead to the sharp price increase of SPC raw materials

China’s commodity market rose on February 18, 2021. the first trading day of the Year of the Ox. Styrene, ethylene glycol and staple fibers rose by the daily limit, with PE rising by 8.06%, PP up 7.18%. PVC and other varieties rising strongly.

While, this is definitely not a good news for SPC floor producers. SPC is mainly composed of UV oil layer, wear layer, printed film layer, rigid core layer and IXPE pad layer. Wherein, almost every layer requires some of plastic materials more or less. For example, Wear layer and printed film is mainly made up of PVC. The production of Rigid core, in addition to PVC powder need to use PE materials, including CPE, PE wax, OPE , IXPE, etc. Therefore, the price increase of these plastic materials will give a huge shock to the SPC floor production.

Latest situation of plastic materials

Latest situation of plastic materials

PE and PP futures rose continuously, and PE futures rose 600 yuan/ton in two days

Sharp price increase of PE,PE

Sharp price increase of PE,PE

Due to the above reasons, the cost of each layer of raw materials in the SPC floor has increased significantly. Among them, PVC accounted for the largest proportion, including the floor rigid core of PVC tree powder, wear layer and color film of the PVC raw materials needed. In addition, the price of additives in the floor rigid core is also affected, like CPE, PE wax, OPE and etc. The bottom layer of the cushion pad material is IXPE, and also with the hot melt adhesive which consists of crude oil material. So, there is no doubt that prices will continue to rise in the next period of time.

Raw material prices of SPC may continue to rise in the coming week!

Steady progress has been made in vaccination in Europe and the United States, which is in line with the market expectations. With the expansion of vaccination coverage, the decline of new cases per day and the continued economic recovery. This has further contributed to the increase in the price of plastics in the market.  Also, that will continue to cause the price increase of SPC raw materials. That means the production cost of SPC floor will be harder for SPC factories. Subject to the recent rise of international commodities boost, most SPC factories think that the future price is easy to rise difficult to fall. Therefore, the plastic market in the next period of time is likely to usher in a wave of price rises againFor .

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For more details about our SPC products: https://www.youtube.com/watch?v=7IFZ7pAWFcg

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