The British pound’s sharp slide to 31-year lows versus the US dollar in the volatile aftermath of last month’s Brexit vote could potentially hike the United Kingdom’s polymer import costs by $100 million, a 13% increase in the overall net import bill for polymers (polyethylene and polypropylene). As a result of this potential hike, British pound could lose the equivalent of 3% on import value as a percentage of the overall domestic market. The UK’s net import bill accounts for 20% of its market value in terms of demand and as a result of the post Brexit currency volatility, this could increase to a quarter of the value of the market. All the analysis throughout this post is based on 2015 annual polyethylene and polypropylene trade figures and the net import bill is based on 2015 average exchange rates and rates in the aftermath of Brexit. The morning of the June 23 Brexit vote, the US dollar was at $1.47 against the British pound and average 2015 levels were at $1.525. By July 8 it had fallen more than 12% to $1.29, levels not seen since 1985 when Mikhail Gorbachev took the helm of what was then the Soviet Union and star-studded Live
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Source: CTRM Center