Are Petrochemicals’ claims about increasing supply real?

The supply of petrochemical products in 1996 was equal to 3 million 888 thousand 899 tons and in this year the equivalent of 2 million 687 thousand 479 tons of these products were traded and reached the buyer. But the available statistics show that in 1997, 3 million 697 thousand 706 tons of petrochemical products […]

The supply of petrochemical products in 1996 was equal to 3 million 888 thousand 899 tons and in this year the equivalent of 2 million 687 thousand 479 tons of these products were traded and reached the buyer. But the available statistics show that in 1997, 3 million 697 thousand 706 tons of petrochemical products were offered in the commodity exchange, of which 2 million 229 thousand 542 tons were traded. In 1998, the volume of supplies was 4 million 276 thousand 877 tons, of which 3 million 98 thousand 605 tons were traded. The year 1999, however, was accompanied by many flows and tensions between supply and demand, and nevertheless, we see that in the first 8 months of the year, despite the supply of 2 million 899 thousand 329 tons, the amount of 2 million 229 thousand 542 tons Has been traded. Experts believe that the demand has been false in some cases, and this is evident in 1997, when Iran was again sanctioned and the exchange rate rose sharply; Because in 1997, the demand reached over 10 million tons. But this false demand gradually subsided. Many argue that in 1999 the impact of false demand on the market was negligible, largely due to the steady rise in currency prices and inflation expectations. The steady rise in the exchange rate in 1999 led raw material buyers to decide to buy more of what they needed, as rates rose every week; Because not buying every week was equal to buying more expensive raw materials the next week. This boosted demand in the early months of the year, and we are now seeing that we are practically in a recession as we reach the final months of the year and inflation expectations subside. It was noteworthy that during this period we saw very significant competition in some grades, and this shows that supply and demand did not have the necessary balance. Now, for comparison, we should refer to previous years, and if we consider the year 1996, we will see that in this year, the demand was equal to 147% of supply. In the first eight months of 1999, however, total demand was only 119 percent of supply, and given the recession we are witnessing these days, it is expected to be even lower. But what should be taken into account is that despite the passage of several years and the issuance of several operating licenses and construction of new units along with the development of many units of complementary industries in the country, overall demand not only did not grow but also decreased due to trade restrictions. Also found. Now the tricky thing is that despite this limited demand, this year we have seen significant competition that in some cases the percentage of competition reached over 100. Thus, it can be seen that the increase in supply was not only unbalanced with demand, but also was not statistically real, and this clearly explains the inflammation in the market.