Euro Area annual inflation incerases to 8.6% in June compared to 8.1% in May, according to Eurostat.
Unsursprisingly energy prices was the major component driving inflation up, registering an increase of 41.9% in June.
Food and alcohol inflation reached 8.9% in June, compared to 7.5% in May.
The rising inflation due to higher energy prices was beginning to translate into a worst-case scenario for polymer players.
While inflation could slow down growth and impact demand, the rising energy prices threatened margins.
Moreover, as costs continue to increase in Europe, the loss in competitiveness against other regions will add further strain across entiere value chains.
The nightmare scenario of low demand, oversupply, and rising costs is becoming more plausible for all players.
In fact in June in many markets such a scenario seems to be already unfolding.
Producers in many polymer markets are facing low demand and are having to lower prices amid rising costs.
At the same time, buyers continue to suffer also from the higher energy costs amid falling demand.
The markets that are suffering the most are acrylonitrile butadiene styrene (ABS), polypropylene (PP), and polystyrene (PS).