Price Reports August 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: August 2020
Standards Thermoplastics  Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate  Engineering Recyclate

 

 

  Standard thermoplastics August 2020: Prices follow slight movements of feedstocks / Producers fail to achieve margin improvements due to weak demand / PVC reacts to multiple outages

 

PE: Producers were only able to push through the full ethylene cost increase of EUR 21/t for HD pipe grades and EVA in August. For these materials, generally very low stock levels played into their hands. However, there was no way for suppliers to meet their additional goal of increasing margins by calling for hikes of up to EUR 50/t as demand was simply too slack. European buyers of blow moulding materials also had to dig deeper into their pockets due to a general lack of cheap imports. Apart from that, increases reached just about half the additional costs, although in many cases a rollover was agreed. Production stoppages left supplier’s stocks very low. They were nevertheless usually able to deliver goods on time because of equally sluggish demand. Large LD film converters should now consider starting expected discussions on the potential cancellation of end-of-year bonuses instead of waiting until January. It would at least be conceivable to partly offset them with contracts for the coming year. Calls for increases of up to EUR 50/t suggested by many producers for September are based almost exclusively on attempts to improve margins. The pure ethylene cost base remained stable at the beginning of the month, so it is probable that August prices will be carried over, although an autumn revival could provide for minor upward tendencies. The phase of production cutbacks that continued to dominate in August is likely to gradually dissipate in September. The lack of cheaper materials, along with other issues emanating from North America due to numerous forces majeures following Storm Laura, should at least help support prices.

 

PP: Notations in Europe saw slight gains in August. The increases in the first third, due mainly to plant outages followed the monomer's EUR 27.50 rise in full, but became noticeably smaller over the course of the month. In the shadow of soft demand, which reflected the twin factors of the coronavirus crisis and the summer holiday season, the outages had little impact on the market. For compounds, the minimal rise in the monomer price in any case was not enough to trigger an index change. For September, PP market players expect no significant change, as the C3 reference rolled over. However, we will have to wait and see whether the hurricane related forces majeures in the US lead to supply bottlenecks in Europe. In any case, the end of the holiday period and the beginning of a new season should have a positive effect on demand.

 

PVC: The upward trend in PVC prices continued in August 2020. Suppliers priced in the pro-rata increase in the cost of C2 at the very least. They were also able to introduce slightly higher increases for S-PVC base material and pastes due to poor availability. Demand was quite brisk despite the holiday period. Planned and surprise plant outages in PVC and plasticiser production and a further increase in demand for construction products are set to exacerbate an already tight supply situation. Against this background, further hikes are on the cards for September.

 

Styrenics: The styrene reference’s minimal increase of EUR +4/t in August set the course: European PS and EPS prices hardly moved at all. The price changes for ABS were only slightly more pronounced. For EPS, a rollover was agreed almost without exception, with only one (important) supplier often insisting on small price increases. With regard to PS, the scenery was more colourful: in addition to slight price hikes, there were also some renegotiations that led to downward adjustments. ABS, on the other hand, recorded slight premiums, especially since the other compounds had become somewhat more expensive. In addition, a producer of injection moulding materials was looking to improve margins to benefit from the tight market. Demand for PS and ABS was generally rather slack in August, which was hardly surprising given the combination of the corona crisis and the holiday season. EPS insulating materials fared somewhat better, although a slight dent in construction activity could be observed in many areas. Processors hope this was mainly due to the holiday period and the market will pick up again in autumn. Styrenics in general, however, are not expected to gain much momentum. In view of the slight decline in the SM reference of EUR 13/t in September, most grades are likely to roll over or see minor reductions at best.

 

PET: No clear impulses emerged for European PET markets in August. Feedstock prices improved only marginally, while everything on the production side in Europe remained stable. Demand continued at a rather subdued level, even though hot weather triggered a slight revival in the beverage sector. Imports from Asia became more attractive in price terms, prompting a number of customers to take a closer look in the region. As a result, European suppliers had to concede a few euros for freely negotiated monthly purchases in order to secure the business, especially in the case of higher notations. Large deals essentially remained stable while spot notations fell slightly due to imports. No clear impetus for change is on the horizon for September. On the supply side, what will happen on the import front remains unclear. As far as demand goes, uncertainty continues due to the pandemic. Notations will most likely stay stable at a low level, with more cheap imports possibly gnawing at 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!

 

 

 

 

  Engineering thermoplastics August 2020: Polycarbonate prices freeze / Glass fibre-reinforced polyamides down / Longer-term agreements stabilise PBT business / PMMA price will follow increase in cost of MMA

For the engineering thermoplastics, August proved to be a typical middle-of-the-quarter month. In other words, it was unspectacular. Polycarbonate prices, for example, did not budge from their last month’s level. As in the previous weeks, production facilities at many locations were operating at reduced capacity. Despite this, producers had no difficulty satisfying the low demand. They are, of course, keen to push through higher prices at some time or other, and, should demand increase further at the end of the main holiday season, they might be successful. On the other hand, existing quarterly contracts up to the end of September will hinder these endeavours.

The situation with the polyamides is very similar, with converters of glass fibre-reinforced types even benefitting from an end to the high-price phase, as prices fell at least by EUR 50/t. Despite increased prices for the feedstocks, producers were unable to do anything about it. As demand picks up after the end of the main holiday season, stocks are expected to shrink, and this, in combination with the still reduced production output, should lead to a balanced supply situation.

In the heavily regulated PBT business, longer-term agreements have meanwhile had a stabilising effect anyway. Although feedstocks along almost the entire chain have become noticeably more expensive since around May this year, producers have not had any success with passing on these costs to their customers. There are no indications here of any changes in sales volumes.

As things stand, it does not look as if there will be much movement in September either. Although demand as a whole is expected to pick up again, price increases are not on the horizon. This could, however, change suddenly from Q4. Present price increases, for example with the PMMA feedstock MMA, are clearly pointing the way.

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 August 2020: Triple-digit hikes on strongly higher demand / Isocyanate output slowly normalises / More hikes in September

Thanks to a noticeable increase in demand, coupled with tight availability, prices for polymeric MDI rose more sharply than had been expected. On average, small and medium-sized accounts had to pay EUR 225/t more than a month earlier. The EUR 210/t increase for TDI was negligibly smaller. The minimal rise in the benzene contract did not influence pricing significantly.

In Europe, the outage at Covestro and the maintenance turnaround at BorsodChem reduced supply of MDI by 20%. For TDI, the shortfall was nearly 30%. While the BASF plant tripped, it seems to be back on its feet now. The restart of plants that had been operating at reduced capacity is proving tricky. For products in strong demand, buyers often faced longer delivery times and in some cases allocation. Here, TDI was particularly affected, due to the shortfall in the US. With effect from 31 August and 1 September, BASF and Dow announced price increases for MDI in North America.

If supply and demand are at the same ratio in September, notations for both MDI can be expected to point farther upward. Sources have told PIE they anticipate hikes of as much as EUR 100/t. With some certainty, the ramp-up of capacity will take at least until the end of August, if not longer.

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 August 2020: July firming leaves few traces / Little momentum overall / Glass fibre products also mostly stable

For the most part, notations for medium reactive ortho resins remained in the July groove in August. There was little impetus for change from the feedstock side and, due to the summer holiday season, demand was thin. Standard grades at the lower end of the PIE table made only slight gains in the wake of the styrene contract’s rise. Many price agreements were settled at a rollover.

In the final tally, the catch-up dynamic seen in July turned out to be less stable than hoped. In August, the demand gap typical for the classic summer holiday month was less pronounced than usual but nevertheless was noticeable in almost all consumer industries. Even where still operating at reduced capacity, producers were able to meet the weaker demand without any problems.

In September, resins producers can be expected to at least half-heartedly attempt to raise prices, though this would certainly not fall on open ears. A rollover is the most likely scenario, especially as principal feedstock styrene after a slight dip in September is unlikely to see much momentum in October, either.

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 August 2020: Slump in demand in the holiday month kills off plans to hike prices / Order books slowly filling again / Recyclers hope for topping-up effects in September

The slump in demand during the holiday period completely destroyed any plans recycling companies may have had to raise prices in August. Their production plants are still being operated with reduced output, and in many cases the utilisation rate is hardly more than 50%. Base material is sufficiently available, also – depending on the type – at reasonable prices. During recent weeks, stocks have shrunk significantly, with the production cutbacks also contributing to this. Although order books began to fill up as expected, they did so only very slowly because of the holiday period.

Should the livelier trend continue after the end of the holiday period, as would normally be expected, September could perhaps not be too bad from the demand point of view. The topping-up effects will, however, not yet be sufficient to provide enough scope for price increases in the short term. With the imminent end to the support measures and short-time working, many recyclate suppliers will restart their production lines, but there will still be many cases of reduced output that will probably continue to accompany the industry for a while to come.

The majority of recyclers have the justified hope that topping-up activities will begin at the end of the holiday period. Apart from that, plastics producers are also pushing very hard to lift prices. These two impulses together could also provide the hard-hit recyclate producers with a little more room to manoeuvre.

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 July 2020: Prices stabilise further / Decreases only with rPET and rHDPE blow moulding grades / Demand improves slightly / Holiday season to dampen demand in August

Western European prices of standard recyclate gradually stabilised in July after the downtrend of the previous months came to an end. Only rPET and rHDPE blow moulding grades saw prices decline further because of weak demand. Individual special deals for other materials did not coalesce into a trend. For rLDPE natural film grades, the renewed rise in virgin material notations led to slight price hikes.

The relaxation of coronavirus restrictions in large parts of Europe has led to a hesitant increase in demand. Demand for recyclate was stimulated by rising virgin material prices. In the weeks to come, however, demand is likely to be dampened by the peak of the holiday season. Against this background, the scope for price hikes is limited, and notations are likely to move horizontally. However, this does not apply to rPET – here, the downtrend should continue due to subdued demand.

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!