The prices of Polyolefin Elastomer (POE) have continued to increase in the global market during the second week of April 2023 due to a rise in demand from the end-use (automotive) industry. However, several factors have affected the market growth of POE, including volatility in upstream crude oil prices, continuous protests by workers in the European region, growing fears of a recession amid the failure of key banks in America and Europe, and aggressive rate hikes of central banks to tame inflation.

Prices of POE have inclined in the European market, backed by the improved demand dynamics coupled with limited supplies in the market. As the supply of critical components, such as semiconductors, improves, European vehicle sales have climbed the highest since May 2021. According to the European Automobile Manufacturers' Association, new-car registrations grew by more than 25% in March 2023, maintaining the good momentum in automotive industry sales and, as a result, boosting the demand for POE in the regional market. However, strikes in the European market have affected the supply chain and productivity rate of POE in domestic and overseas markets. Additionally, widened demand-supply gap has resulted in higher prices as it restrained POE availability in the regional market. Thus, POE Octene-based FD Hamburg prices were assessed at USD 3520/MT with a week-on-week increment of USD 80/MT during the week ending April 14th.

The price of POE in the US market raised by USD 70/MT on April 14th. This increase was due to a rise in demand for POE from the automotive industry as consumers continued to place new orders in the domestic market. Despite the banking turmoil in the US market, the prices of POE showed a positive trend as the automotive industry continued to operate at a moderate level. According to sources, US sales of used electric vehicles increased by 32% in the first three months of 2023. Additionally, the Ports of Long Beach and Los Angeles in the US faced a shortage of labor and dockworkers, which led to a shutdown of the ports and limited the supply in the domestic market. Therefore, the prices of Polyolefin Elastomer Octene based FOB New Orleans settled at USD 3700/MT.

Conversely, in China, POE has witnessed stagnancy with a marginal increment of USD 20/MT supported by the constant demand dynamics from the end-user automotive industries coupled with steady imports reaching Chinese shores and stable prices of POE.

As per ChemAnalyst, "Global POE prices are expected to rise slowly on account of stagnant demand from the automotive and construction industry (end-user)."