Price Reports August 2016

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:  August 2016

Standards Thermoplastics Engineering Thermoplastics Polyurethane Feedstocks GRP/Composites

 

  Standard Thermoplastics August 2016: Many rebates in August's first half / Polyethylene especially hard hit / Polystyrene unchanged / Rising crude stabilises polymers over the month / Trend for September likely higher

PE: August was a disappointing month for European PE producers. They had hoped at least to pocket the nominal cost reduction of EUR 20/t in the ethylene reference price by pushing through an across-the-board rollover for PE prices and thus improve their margins. But it was not to be, and also the quickly announced suspension of orders by some suppliers largely failed to meet their objective because, as many people suspected, there was sufficient material around after all. Grades pressured by imports fell particularly heavily, while others were oriented more to the reference price. Towards the end of the month, the situation increasingly stabilised against the background of rising oil and naphtha prices, the gradual ending of the import season, and the generally expected rise in the cost of ethylene.

Surprisingly, the C2 reference for September was carried over unchanged, which meant that the many premature calls by producers for significant increases – there was even talk of hikes of up to EUR 70/t! – seem very ambitious in view of the stable costs. Consequently, many producers retreated to an increase of EUR 40/t while others were even more modest, asking for EUR 20/t. Nevertheless, it seems questionable in many cases whether even a rollover will be obtained, especially with LLDPE and some types of HDPE.

PP: Early August still saw slight price declines for standard PP grades. Over the following week, the situation stabilised, and the result was frequently a rollover. Nevertheless, the month saw marginal declines. For the first time, the compounds felt the influence of the new system of indexing to standard PP prices. Despite the firming trend for C3, most compounded grades followed the declines in standard material over the preceding months. This trend mainly reflected the usual weak demand in the key summer holiday month of August. The light-coloured compounds were an exception; they remained mostly stable under the influence of the sharp rise in titanium dioxide notations.

The C3 reference contract for September saw a rise of EUR 20/t. Standard grades can now be expected to rise by the same margin, though here and there the hikes could be steeper. Due to the indexing, the compounds also will come under this influence and trend higher. However, it remains to be seen whether this will happen in September.

PVC: However much they tried, European producers of PVC base material were unable to gain any margin increases in the holiday month of August. In the end, they had to pass on the usual share of 50% (but no more, as some buyers had wanted) of the drop in the ethylene reference price. The other PVC types kept to the usual yardsticks. In particular, titanium dioxide remained much calmer than many players had feared.

There is no sign of any substantial impulse for September. The ethylene reference price will roll over and the market situation is largely balanced despite all the scaremongering from the ethylene camp. This applies basically to all PVC types. On the other hand, titanium dioxide sellers have already announced the next round of price increases. It will depend on this whether the rigid PVC blends move up a little.

Styrenics: After the rollover of the August SM reference contract, notations for the majority of styrenics also remained stable, especially as there was no other stimulus to affect prices. Only with ABS were there one or two minor falls for standard grades because individual producers and distributors were evidently feeling a little more generous. Demand in August was largely dominated by the holiday season, although some players took advantage of the comparatively low price level to build up stocks.

For September, no significant price changes are to be expected. Processors aim for slight reductions, particularly as the September SM reference contract receded by EUR 20/t. Meanwhile, PS and EPS producers are demanding higher prices. A weak rollover could be a likely outcome. A certain upturn in business could possibly come from the increased demand when converters begin building up stocks again after their vacation, and also through the effects of the large number of working days in September (22).

PET: In the first few weeks of August, there was no way for European PET notations to go but to follow the earlier downward trend. In the last third of the month, however, the combination of rising prices along the oil chain and warmer weather resulted in a rise in demand for beverages, and with it, PET. In response, notations stabilised, although taken over the month as a whole, prices declined by anywhere between EUR 15-30/t.

Which way the winds will blow in September is still unclear. The overall framework conditions continue to favour erosion. Amid uncertainty about price developments across the oil chain, players will likely operate cautiously, which would point towards stable notations – not least since demand across Europe could rise if the good weather holds up. If oil prices stay put or decline, however, PET producers will have no reason to lift notations.

n Full reports available at www.pieweb.com/234684 (PE), /234685 (PP), /234681 (PVC), /234686 (PS) and /234682 (PET)

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

  Engineering Thermoplastics August 2016: Downward pressure on PC and PA 6 unabated / PA 6.6, PBT and POM stabilise / PMMA points higher / Trends continue / Automotive weak

In August 2016, the European market for engineering thermoplastics saw the return of the recently absent summer lull to Europe, with demand substantially weaker in the key summer holiday month. The relatively well supplied PC and PA 6 markets saw clearance sales spearheaded by “despecified” top-of-the-line products, and this hit regrind especially hard – see PIEWeb of 22.08.2016. The most basic virgin grades of these two polymers saw prices slip in monthly trading at distributors and traders. A similar picture was seen for the near-commodity ABS – see PIEWeb of 05.09.2016 – as well as PP compounds – see PIEWeb of 05.09.2016. All other polymer types covered by PIE remained stable, with PMMA even seeing upward pressure.

For September, the recent trends seen for the classic engineering thermoplastics are forecast to continue. While demand of consequence will pick up, many players who supply the very important automotive chain have more than a few doubts about the economic outlook for the end market. OEM suppliers can expect to see very little tailwind. One consolation is that the E&E sector is holding up rather well. Under the influence of problems higher up in the production chain, PMMA could be pulled upward.

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

 

 

 

 

   Polyurethane Feedstocks August 2016: TDI still volatile despite lower input costs / Only slight rise for MDI / Rollover for polyols / Summer holidays dampen demand

Amid seasonally weaker demand, MDI saw moderate hikes, and polyols rolled over, but TDI remained extremely tight. Although the price of feedstock toluene continues to decline – the last drop was quite substantial – the excitement of the previous months drove the PU feedstock notation EUR 70-80/t higher, spotlighting the continued anxiety in the market. Adding to the uncertainty was the fact that what will be Europe’s largest production facility is still stuck in the start-up phase, and it will likely take several more months before on-spec material will be available.

The most pessimistic voices in the marketplace predict that this situation will persist until the end of the year. However, given the latest drop in toluene notations, the most likely scenario is that the TDI market will calm and reach a plateau – possibly as early as October – even if the situation will probably not return to normal for some time. For the other PU feedstocks, stronger demand in September could pave the way for slight price increases.

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

GRP/Composites August 2016: Little momentum / Resins give way slightly / Glass fibre unchanged / Rollover in September? / New glass fibre type “Assembled Roving”

In the key summer holiday month of August, notations for composites starting materials – medium-reactive ortho resins and glass fibre products – remained largely unchanged. Resins gave way only slightly, by EUR 5/t, reflecting quiet trading amid somewhat weaker demand.

The styrene contract for August held steady at EUR 1,055/t and thus provided little impetus for activity. Notations for propylene and maleic acid anhydride also saw no change. Solely phthalic acid anhydride gave up minimal ground. Some feedstock plants were in maintenance, and minor supply bottlenecks were seen here and there. On the whole, however, all materials were in sufficient supply.

For September, as demand moves back into the normal range, a small amount of post-holiday inventory replenishing may be seen. The EUR 20/t decline in the September styrene contract could curb some of the momentum, however, so that a rollover is the most likely scenario. This would mean that the phase of slight weakening seen since June is bottoming out. Glass fibre for the most part should be unaffected by this trend.

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

Standard Recyclate August 2016: Falling primary prices take notations down / Demand dampened by summer holidays / Stabilisation appears to set in / Cost of some secondary materials likely to rise again

Many suppliers of standard thermoplastics regrind had no choice but to lower their prices in August 2016. Not only was demand slack as usual during the main summer holiday month, a high number of irritatingly cheap spot offers of simple virgin material pushed onto the market in the last few weeks. This also took down the price of production scrap, offering recyclers some relief.

However, it also became increasingly clear that recyclate prices will probably start rising again come September. Prices for virgin polyolefins have already started to stabilise. Apart from that, demand is expected to pick up once recyclers return from their holidays. In addition, as the price of primary material rises, several buyers will increasingly opt for recyclate. Against this backdrop, some secondary notations could increase sooner rather than later.

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

Engineering Recyclate August 2016: Virgin material surplus rings in landslide in secondary market notations / Polyamides and polycarbonate strongest affected / Despite signs of stabilisation, minor tremors still possible

The summer months have not been good on European engineering recyclate producers. An abundance of low-priced offers from the overflowing stocks of virgin material suppliers took a chunk out of the secondary market. This favourably priced "despecified" top-notch material could at times even be had for less than the price of regrind, forcing recyclers to significantly lower notations for a number of types. The impact was most pronounced for standard PA and PC regrind. The price of other types, including recycled ABS and POM, held stable, while rPP compounds responded to the declines seen for virgin PP in the preceding months.

Although there appears to be a tendency towards stabilisation on the European markets – which is also being supported by developments in the oil chain – the recyclate types hardest hit by the downtrend could slide a little further. That being said, however, all other signs point towards stabilisation.

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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!