2013 A promising start?

After a normal “seasonal” slowdown in demand in December 2012 the first month of the year showed very good and promising plasticizer demand. Part of this can be explained by customers reducing stock in December and therefore ordering more as they need in January.
However one could argue that if customers do not have stocks it is rather difficult to destock…hence, a good January does not mean restocking, but simply good demand!
If that is the case this should mean that February will show similar demand as January….the good news is that February really seems to show good demand. Although it is very early to tell all signs seem to indicate that the first two months of 2013 will indeed really show promising demand. An explanation for the good February demand can be that customers do expect costs to increase significanly in the coming months. If we look to costs developments in the USA this is happending and will continue indeed. In EU turnarounds and force majeures for oxo-alcohols (main raw material and cost driver for most plasticizers) are putting upwards pressure on plasticizer pricing. Thus, although things seem promising, the good demand can potentially be explained by a combination of destocking and pre-buying to prevent higher costs.
This is a less optimisitc view and nobody actually really knows…I choose for the optimistic view for now and conclude that 2 good months are better than 0 good months.

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