Price Reports April 2021
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The following information is provided by Plastics Information Europe. 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 entire versions of the following reports, go to www.pieweb.com and sign up for a 48-hour free trial! |
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Articles: April 2021 |
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Standards Thermoplastics |
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Standard thermoplastics April 2021: Hikes for all grades, sometimes massive / Forces majeures and maintenance further limit availability / With demand at good level, end of the price boom hardly foreseeable
PE: Across all the polyethylene types covered by this report, the rate of price increases in April was only slightly lower than in the previous month. In what is a purely sellers’ market, many converters had to swallow increases of up to EUR 320/t – on average, they amounted to EUR 250/t. Quantity took precedence over cost, and at present prices are not up for negotiation. The maintenance season has since begun, and additional reports of forces majeures from Europe frequently reduced supply even further. On top of that, imports from the US and the Middle East were virtually non-existent. Contracted quantities were mostly subject to allocation and were delivered late. Material for additional projects was simply unavailable. Some converters with a desire to experiment managed to track down volumes in Iran and the Ukraine. As expected, the hard times for converters will last through May. Not until June might substantial imports arrive in Europe. Even before the ethylene contract was fixed, producers were calling for hikes of EUR 200-250/t. Because of the still very tight market situation, it is highly likely that these increases will go through, despite the minimal rise of EUR 5/t in the cost of C2. After all, stocks are empty and there has been little possibility to build them up during the last few turbulent weeks. In some sectors such as agriculture and beverage filling, regular demand is rising. The stockpiling of recent months, on the other hand, has virtually died out. In many cases, the extreme shortages are significantly slowing down the potential growth of converters. One example is the pipe segment, where the pain barrier for prices has been reached and buyers are already postponing orders to autumn.
PP: Gaining even more momentum, polypropylene prices shot through the roof in April 2021, completely decoupled from the cost development for C3 (up EUR 45/t). Driving force was the market’s extreme tightness, which grew even tighter over the month due to plant outages and the absence of import material. Adding to the misery was the strong demand, with panic buying to secure supply exacerbating the situation. On their long journey upward, there is no indication that notations will lose momentum anytime soon. In May, more price increases are to be expected, in particular as supply is likely to deteriorate further and the slight rise of EUR 10/t for C3 is almost incidental. No longer able to pass on the excessive hikes to their customers, some producers decided to either curb production or even shut down the lines.
PVC: It’s the same old story for months: in April 2021 there was also no change in the market environment for PVC. Availability remained extremely tight, with demand running at a good level. Against this backdrop, suppliers took the opportunity to drastically crank up their prices once more. There was not much that those wanting to purchase materials could do. The hikes for PVC thus again far exceeded the pro-rata cost increase for C2 (up EUR 40/t). In May, the picture is still one of extreme undersupply. In the case of compounds, the supply situation for plasticisers at least is showing a gradual improvement again. This will not, however, be curbing the general upward price trend for May even if there are no significant impulses on the C2 side (up EUR 5/t) – on the contrary, prices are still rising for what is now the 12th month in succession. Converters will not, however, be in a mood to celebrate this particular one-year anniversary.
Styrenics: After the massive price hikes in March, which were higher than ever before, April 2021 brought a new round of massive premiums. The price increases for polystyrene and EPS almost completely followed the renewed sharp increase in the styrene reference (up EUR 312/t). Against the backdrop of scarce availabilities, producers needed to make no major concessions, but they also refrained from any margin improvements in view of the latest round of historically high prices. Meanwhile, ABS premiums exceeded the purely arithmetical increase in composite costs (up EUR 222/t). However, producers pointed out that these premiums did not increase their margins either, as they had to buy feedstocks such as styrene or ACN at inflated prices on the spot markets. The generally tight to very tight supply situation prevailing for all styrenics is likely to worsen in May. This is because PS and ABS capacities are down due to maintenance, while EPS is driven by strong demand and by plant cutbacks at some producers who are not backwards integrated. Despite the availability problems, however, the upwards trend is losing steam. The decisive factor is the far too high level of the styrene reference, no longer leaves much leeway. The SM contract went up “only” EUR 87/t in May – as opposed to the decisive triple-digit figure seen in the two previous months.
PET: European notations for PET increased sharply again in April 2021, as expected. The PTA bottlenecks caused by plant problems in Belgium and Poland continued to severely curtail production, while imports were still highly subdued due to the tense logistics situation and the pull of high prices in the US. Prices thus increased noticeably even without taking feedstock costs into account. With demand remaining below expectations, the increases were “only” just into triple digits in most cases. The pandemic lockdowns and the rather cool weather reduced demand considerably, more than had been expected. In most cases, converters were therefore still able to avoid stoppages due to material shortages. It was more the case that poor sales prospects depressed the mood. No substantial change in the precarious production situation is in sight for the next few weeks. The price levels attained could, however, make deliveries from Asia more attractive. If bottle business picks up as temperatures rise in May, further increases will be on the cards. Since the pandemic situation is continuing to have a subduing effect on demand, the hikes will presumably no longer attain the dimensions of previous months.
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 April 2021: More triple-digit hikes as demand remains vibrant / Many shops struggle to secure material / Another twist of the price screw inevitable
The tight to very tight supply situation with most base polymers and feedstocks combined with the start of a new quarter led to further price increases for the compounds, averaging around EUR 200/t. In the case of PBT, POM, standard PA materials for car production, and PMMA, the increases were just about reasonable because of longer-term price ties. But these, too, are likely to climb in the coming weeks, and large-volume buyers were not spared the hikes.
It is rumoured that in the meantime, converters are not only verbally fighting over pallets. At any rate, there are signs of a considerable struggle in product distribution. The price has become almost secondary in importance, even though accumulated increases of EUR 700-1,000/t since the beginning of the year are not rare.
The latest enormous increase in the cost of benzene came as a surprise to both converters and producers. The massive distortions are a consequence of a combination of various factors such as continuing refinery cutbacks and cracker outages in Europe and the US. A rapid recovery is not in sight, and availability in May is likely to be just as bad as it was in April. Also, the tendency to shortages exists worldwide, and even in China supplying local producers cannot always be guaranteed.
An interesting development generally in car production is that “just-in-time” no longer seems to be the measure of all things. Instead, despite the latest production stoppages due to the shortage of electronic chips, call-offs by OEMs are running at a high rate to enable them to build up stocks.
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 2021: Triple-digit hikes for isocyanates and polyols / Panic buying drives prices / Demand for bedding shrinks, building and automotive strong / No end to the price rally
Whatever material was available was sold at the highest price possible. The increases were again nearly triple-digit, reflecting in particular firming notations for starting material benzene. Buyers with quarterly contracts had to swallow hikes of more than EUR 500/t. Some producers stopped making pure MDI and concentrated on the bulk market for the polymeric grade.
Building applications such as insulation sheet, pipe or heating insulation were in strong demand. Converters raced to keep up with their customers’ orders. Along with the high season for construction applications, panic buying was a factor. Many products were on allocation, and delivery delays were also a problem.
The shock of the steep rise in the April benzene price led to sinking spot notations. If this trend holds up and the contract follows the trend, the cost situation for isocyanates at least will not worsen in May. Decoupled from the cost development, increases will still be seen, however. The volume of orders from the automotive and construction sectors is higher than normally seen, and will remain so. By contrast, the ongoing lockdowns in some European countries are depressing demand from the bedding and upholstery segment.
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 2021: Resins rise to new heights / Glass-fibre products somewhat higher / Automotive weakness curbs orders / Precursor bottlenecks could drive prices further
Price rises and no end in sight. After the already dramatic increases in March, the wave continued rolling in April. Buyers had to plunk down EUR 500/t more on average for medium reactive ortho resins. Propelling the trend was the upward momentum for styrene along with bottlenecks and price hikes for all other starting materials, in particular glycols. Glass-fibre products also saw slight increases at the beginning of the month.
High prices noticeably curbed orders for both resins and glass-fibre products. At the same time, the automotive industry’s engine as a market driver began to stutter. Availability of glass fibre was sufficient, but imports were absent. Even with matrix material tight, supply was adequate. Converters continued to cover only their immediate needs in expectation that prices would drop before the end of the quarter. Here and there, some players curbed production and postponed projects.
In May, resins prices should add more of the EUR 87/t rise in the styrene contract.
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 2021: Strong premiums on all grades / Scarcity of feedstocks fuels demand for recyclates / Further price increases in May likely
“Buyers are literally crying for material.” A recycler who participated in PIE surveys used these alarming words to describe, quite accurately, the current situation in the recyclates market in April 2021. The already-good demand is being fuelled by extreme supply shortages of virgin material, which is prompting processors to look for alternatives. In response to the numerous volume calls, recyclers increased notations in April, in some cases even by triple-digit premiums. New customers in particular have felt the impact of these surcharges, while regular customers generally got off more lightly.
However, part of the price increases was inevitable because production scrap was also in short supply, leading to significantly increased purchasing costs for recyclers. Many players are not even receiving enough feedstock materials, and therefore have to scale down production. Ongoing high fixed costs thus prove to be especially hurtful.
The general situation is unlikely to change in the weeks to come. In purchasing, production scrap remains scarce, and virgin materials are also struggling due to persistent bottlenecks. All of this is forming the backdrop for further increases for recyclates in May 2021.
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 April 2021: Price spiral rises even faster / May will be the worst month so far
The supply shortage – whether recyclate or primary material – has sent the prices for all secondary materials rocketing, without exception. The situation with polyamide 6.6 and polycarbonate was particularly acute. Feedstock costs and the former practice of tying the polymer price to the monomer price are becoming increasingly obsolete.
Converters were searching desperately for pellets. Serving the high-volume orders from the automotive sector – mainly for black polyamide types – proved to be particularly difficult. Customers were buying just about everything, without paying heed to the quality. At the same time, more and more converters are hanging on to their production scrap, which means that the independent recyclate manufacturers are increasingly having their basis for business taken away from them, and they are already unable to make up for the lack of primary product.
There are no signs on the horizon that the situation will improve. On the contrary, it is likely to become even worse in May. The industry sector resembles a beehive under attack from a swarm of hornets. There is no longer any real connection between incoming orders and purchasing, because the development is nowadays purely speculative. At the same time, there is a fear that feedstock prices would rise even further, with the effect that converters, for example, are stocking up on finished products of all kinds.
The desperate efforts being made by converters to secure material are therefore likely to continue. The stockpiling efforts are, however, increasingly encountering empty stocks at the recyclers. The latter are finding it almost impossible to obtain base material and additives, which means that their output is significantly reduced. There is no improvement in sight, especially as production in the US is still far from running normally again, and imports cannot be expected soon. Only at the end of last week there was another force majeure with polypropylene, this time at the smaller producer Pinnacle in Louisiana.
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!
