Several months of falling prices come to an end / Middle East conflict causes rise in quotations / Reliability of supply takes priority

Despite continued meagre demand, producers were able to push through slightly higher prices, although not across the board and not for all types. Quarterly contracts had a supporting effect. The multi-month downward trend in prices came to an end. What had been seen as a mere breather before the outbreak of the conflict in the Middle East now has the makings of a structural trend reversal.

Producers continued to curb output. Production rates, which have been reduced since at least the summer, appear to have become the new normal – without jeopardising supply. Demand has stabilised at a low level. This was accompanied by cautious restocking by processors. The agricultural and E&E sectors showed the first signs of life.

In view of the conflict in the Middle East, the PIE panel expects prices to rise significantly in March. Contract agreements will still likely mitigate any overly radical swings. But from April at the latest, producers and processors will have to come to an understanding regarding sharply rising quotations. Processors will therefore likely try to buy and store more material in the short term. Reliability of supply is moving up the list of priorities.

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