The outlook in the short term sees prices supported by firm energy costs. Gas prices decreased in October from €170/MWh to €100/MWh but have since rebounded to €120/mt. The outlook remains highly uncertain.
The polymer industry could experience another spike in gas prices should temperatures fall below average levels. At the same time, lower demand in China can potentially lead to lower prices in the region across the value chain which will ultimately lead to more downward pressure in Europe.
A seasonal pick up will be shallow in the spring, with prices supported by firm energy costs. The fall in gas prices during the warmer weather in the spring amid expected poor macroeconomic conditions will continue to push prices down during the spring and summer.
As energy prices look set to remain high, inflationary pressures will continue to slow down economic activity and demand. As such, there is a strong chance that prices next year could fall further than expected.
The market update is an exerpt fromt the monthly report.