Price Reports April 2020

The following information is provided by Plastics Information Europe.  For more than 34 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read entire versions of the following reports, go to www.pieweb.com and sign up for a 48-hour free trial!

Articles: April 2020
Standards Thermoplastics  Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate  Engineering Recyclate

 

  Standard thermoplastics April 2020: Large decreases predominate / Producers attempt to limit damage / Mostly equal passing on of falls in feedstock costs / Demand is variable

PE: The polyethylene market in Western Europe presented a varied picture in April, reflecting a situation influenced by customer markets and availability. Demand fluctuated significantly depending on the application. Buyers’ interest was focused on coronavirus-related products, especially for the food, pharmaceuticals and hygiene sectors. Producers attempted to limit to EUR 80/t the share of the latest reduction in the ethylene contract they passed on to their customers, and in individual cases they tried for even more. With some products they also succeeded, but primarily due to the shortage of some grades or to strong demand from certain applications. On average, they factored in around half of the C2 reduction, although converters of HD pipe grades were able to win almost the entire cost reduction due to the oversupply. There were signs of a surplus tendency with some film grades too but not everywhere. Producers with a strong customer presence in the locked-down Southern European countries were left sitting on material, and they tried to dispose of it in Western and Northern European markets. This resulted in a surplus of product in these regions. The price pressure will continue since the ethylene contract was fixed EUR 100/t lower at the beginning of May. Producers’ attempts to limit the share they pass on to customers are being helped by measures to control supply, especially with LLDPE (C8) materials. In May, this strategy could be extended to C4 and C6 grades. The bank holidays in May could put an additional damper on orders. Apart from that, downstream customer industries are still affected by capacity limitations. The re-start of the automotive industry could liven things up a little – for example for blow moulding grades.

 

PP: On the back of the EUR 175/t crash in the April contract for C3 feedstock, polypropylene prices saw triple-digit declines, even if producers didn’t pass on their entire cost savings. Producers’ attempts to hold their price concessions to EUR 80/t were not crowned with success. Concessions for automotive material as a rule were higher than, for example, packaging-grade polymer, where robust demand supported price levels. Despite outages here and there, supply was sufficiently long, due to the reduced demand amid the coronavirus crisis. With orders from the automotive sector practically dried up, some compounders shut down their lines entirely. When the automotive industry restarts its assembly plants, compounding lines will start up again successively. On the whole, demand for PP will remain weak and the market long. This means that if the propylene contract loses ground again in May, producers will have no choice but to further reduce prices.

 

PVC: The plunge in the cost of ethylene in Western Europe led to a major drop in the price of PVC. Some producers tried at an early stage to limit the size of the cuts to EUR 50/t, but with the prevailing surplus of product on the market, this proved impossible. The full C2 cost reduction, which amounted to EUR 100/t in April, was not factored in either. For S-PVC (U) and S-PVC (P), the smaller fall in the cost of plasticisers, stabilisers and other additives helped to limit the size of the price reductions. With PVC base, there was sufficient material around despite various plant outages. Only with film grades were there any bottlenecks. Compounding lines are generally running normally now, particularly as the lively activity in the construction industry boosted selling-off initiatives. After the EUR 100/t price decline for C2, further price reductions are expected for PVC in May. However, producers will again try to hang on to some of the decreases since they also need to factor in old stocks that were produced earlier at a higher price.

 

Styrenics: The rapid decline in styrenics prices in Western Europe continued unabated after the SM reference dropped EUR 315/t in April. Prices for polystyrene and EPS slipped to a 10-year low, and ABS has not been this cheap since 2015. For the most part, producers did not pass on the cost reductions in full, as they first needed to sell off more expensively produced stock materials. However, they granted increasing discounts during the month, so that price agreements widely varied. The PIE price range was significantly widened. Demand was marked by the coronavirus crisis, and plastics producers tried to adjust output to the lower demand. In May, PS and EPS processors are expected to push for further reductions after the SM reference eroded again, even if only by EUR 13/t. It is likely that at least those prices in the high bracket that ended up at the top because of the wide spread in price reductions will be readjusted. As for ABS, the reductions are likely to be more pronounced after the butadiene cost component saw another steep decline by EUR 200/t.

 

PET: The situation on the European and global PET market continued to be mixed in April. The strong downtrend through the slump in the price of paraxylene in March was partly absorbed by an increase in the demand for PET for disinfectant containers. Whereas orders tied to the price of the raw material inevitably declined because of the lower cost of PX, producers took advantage of the boom in demand to limit the price cuts for all freely negotiated purchases. Notations for the various order models were thus again widely spread. On the supply side, logistics delays were reported. However, the healthy demand allowed stocks to be reduced for the first time in several weeks, with the result that supply is gradually returning to normal. Many disinfectant containers are made of PET. With the exploding demand for this packaging during the Covid-19 pandemic, the need for the corresponding materials rose accordingly. The downward pressure on costs will presumably continue into May. The boom in the demand for bottles for hygiene products and water is unlikely to wane as long as the coronavirus crisis continues. For this reason, it is possible that prices will widen even further, depending on the type of contract. Because recyclate notations have barely fallen so far, the price pressure on secondary food-grade materials is growing. Many sorting facilities have been taken out of operation because of the pandemic. There is thus a threat of increasing problems for recycling plants.

 

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

 

  Engineering thermoplastics March 2020: Most grades roll over / Only polyamides on the decline / Benzene crash to overshadow April / E&E sector could stabilise prices for POM and PBT

With the exception of the natural polyamide grades, which saw continuing erosion, producers were largely able to salvage their respective prices in March – helped by the quarterly agreements. In the case of PA 6, the surplus tendency affecting base resin triggered a downward reaction, while PA 6.6 saw its previously high price crumble again after having a short breather last month. In view of the weak demand, there were few reports of supply problems, particularly as Chinese facilities are resuming operations again.

 

The enormous slump in prices in the aromatics chain (benzene topped the list with a EUR 400/t plunge) will put a definite end to any hopes producers had of raising prices in April. On the contrary, they will find it difficult to limit the triple-digit reductions – and that against the background of subdued demand. Only POM and PBT could buck the trend since the E&E sector is still ordering at a solid rate in contrast to the automotive industry, which is out for the count.

 

Instead, there could be attempts to shorten the market through speculative stocking up. Producers hope, should demand pick up again in the second half of 2020, that prices will be somewhat higher. For the first time, they are asking converters to estimate their requirements until the end of this year in order to be able to plan things better.

 

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

 Polyurethane feedstocks April 2020: Isocyanates little changed / Decreases on the horizon / Foam product demand sinks by a third / Rigid polyols precursors compete with disinfectants

With relatively few contracts signed up to mid-April, the price rounds for isocyanates in Western Europe were accompanied by heated discussions. By standing firm, producers were able to limit rebates for polymeric MDI to EUR 30/t, despite the dramatic EUR 400/t drop in the benzene contract and the substantial price declines that were observed in Asia and the Middle East as well. TDI buyers did only slightly better, gaining rebates of EUR 20/t. Producers were able to widen margins considerably, even though demand collapsed – for which reason most isocyanate plants were operated below capacity. Notations for both types of polyols gave way noticeably.

With many plants closed or operating below capacity due to the Covid-19 pandemic, output of foam products fell to about half or at least a third of the normal level. This applied mainly to facilities in Southern Europe, with Northern Europe less severely affected, according to the industry association Europur – see PIEWeb of 08.04.2020. Rigid foam for insulation and technical applications fared somewhat better than flexible foam.

How the situation develops going forward will depend on how strict the limitations on business operation continue to be. If the coronavirus lockdown seen in various forms in European countries over the past few weeks continues – as is expected – until the beginning of May, it could have additional repercussions for order volume and put further downward pressure on notations for all polyurethane starting materials. Products for insulation and technical applications should continue to perform better than flexible foam for the bedding and automotive sector. A very slight improvement in demand from the automotive industry is possible if assembly lines are ramped up again from the end of April as expected.

Along the ethylene chain, producers of rigid polyols are now having to compete with manufacturers of disinfectant products to be supplied, and this could act to support prices.

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

  Composites/GRP April 2020: Resins crash in April / Chopped strand mats under some pressure / Soft demand claims its due / Downswing may bottom out in May

After the first minimal declines in March, ortho resins prices saw a more pronounced downslide in April, giving up EUR 55/t on average. The soft demand and plunge in the styrene contract left producers no escape route. With this, the coronavirus pandemic has squarely hit the composites market. The phthalic anhydride contract price took a further EUR 15/t step downward. Prices for standard chopped strand mats lost a good bit of ground, while the higher end material saw only slight declines.

Up to now, ortho resins prices have not taken full account of the proportional decline in the SM price. In terms of figures, a reduction in May in the amount seen in April might be conceivable, though this is likely wishful thinking on the part of processors. More likely is a continued erosion at a slower pace, especially as the downturn in the cost of the principal feedstock appears to be bottoming out. Styrene gave up an additional EUR 13/t in May, but that was hardly noticeable in view of the steep plunge it took in early April. With spot notations under enormous pressure, phthalic anhydride could move farther downward.

The automotive market has been showing increased momentum since the beginning of May. However, it should take a little more time for order volume to begin picking up again. How strong the rebound will be remains to be seen.

 

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

  Standard recyclate April 2020: Coronavirus shakes up market / Dwindling demand, cutbacks and short-time working / Crash in virgin material prices pressures rPE and rPP / Lasting damage expected

Recycling companies in Western Europe are going through difficult times. In April, the slump in virgin material prices and a sharp drop in demand due to the coronavirus pandemic have put all types of rPE and rPP under pressure. This led to price reductions, some of which were severe. The effects on rPS, however, were limited until now. The price gap to virgin materials has melted away, and the virus pandemic will not leave this segment unscathed. Recycled PET, meanwhile, benefited from the start of the beverage season, resulting in largely stable or even slightly increasing prices.

The balance of supply and demand was vigorously shaken by the coronavirus. In all sectors not considered essential, processors and buyers of plastic products have suspended or massively reduced production. The resulting slump in demand led to swelling inventories at many recyclers. Against this backdrop, many of them are also cutting back on output, putting employees on short-time working or even planning a complete shutdown. Smaller recycling companies, in particular, could easily get caught up in this situation. Market watchers expect that some of them will not survive this period of drought.

 

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

 

  Engineering recyclate March 2020: Reductions only for recycled polyamide 6.6 GF and polycarbonate / Supply plentiful / Wide-ranging price cuts expected in April / Fall in virgin material prices and coronavirus-related slump in demand

Despite the drastic change in the cost base with virgin materials, the pressure these exerted on recycled products was not too great, and recyclate producers in Western Europe managed to hold prices largely stable until mid-April. Recycled ABS and polyamide 6.6 on the contrary fell significantly, with the trundling primary markets here exerting great pressure. Notations of recycled polypropylene compounds also slipped, but to a slightly lesser extent – attributable mainly to the lack of demand.

Because so many processing facilities are shut down, plastics scrap was scarce. As a result, recyclers’ compounding lines were operating at least at reduced capacity as well as to avoid the build-up of stocks. Supply was correspondingly thin. Only the polycarbonate market, which had previously seen a surplus, remained relatively long.

Ordering by the automotive and machinery manufacturing industries – of PA 6.6 for example – came more or less to a halt, but the E&E and construction sectors continued to do business as usual. This also propped up POM and PC.

This situation will probably continue until mid-May. Carmakers such as VW are planning to re-start some production lines towards the end of April. With a certain delay, converters would then resume purchasing during the first week of May. Until then, most recyclate prices will probably fall significantly again. In other segments, the easing of the lockdown measures should provide for a faster revival of demand, which will limit the price reduction accordingly. In some cases, virgin material producers have taken supportive measures as a precaution, and these will have a stabilising effect on recycled engineering polymer grades.

 

For more than 35 years, PIE has been an invaluable source of information for European plastics industry decision makers - a quick, yet in-depth look at the development of plastics markets and polymer prices. Available online 24/7 and as a printed newsletter twice a month. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!