Price Reports August 2021

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!

Articles: August 2021
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

 

  Standard thermoplastics August 2021: Imports calm the situation a little / Will Hurricane Ida hamper supply? / Supply chains remain tense / Uncertainty in the automotive industry

PE: With some film grades, the increase in imports significantly improved the still very short supply situation. Apart from that, suppliers were mostly able to meet their contract agreements in August, helped by the summer break in southern Europe. Some converters even succeeded in obtaining additional quantities for their projects. Also, the feared repercussions of the defective naphtha pipeline did not materialise. The cautious decline in prices at the beginning of August became significantly stronger as the month progressed. For September, more imports are expected from the US, but it remains to be seen whether and how Hurricane “Ida” will mess up these plans and quotas. Supply from European production has improved slightly, but is still low. Converters are left with uncertainty and fundamental hope. With the pipe grades, the boom in the building sector further intensified the existing market bottleneck with HDPE pipe 80 and pipe 100. The overwhelming shortage meant that larger price increases were seldom up for negotiation. Once again, quantity has priority over price. Also, in the next few months, demand from the industry is expected to remain high because the rebuilding work in the flooded regions of Germany is likely to drive the demand for materials to new, previously unpredictable heights.

PP: The downswing in PP prices that began in July continued into August. In view of the very high levels already reached and converters’ increasing reluctance to order, producers could not even think about factoring in the EUR 58/t rise in C3 contract. The result was that notations for standard PP gave way for the most part. For compounds, however, accounts indexed to the monomer paid slightly more on average. Supply lengthened noticeably during southern Europe’s classic summer holiday month, and volumes not called up there could be redirected to central and northern Europe. At the same time, Asian imports and the restart of a key production line in the Netherlands helped further increase availability. Another factor was that the European automotive industry had to correct order volume substantially downward, due to the chaotic situation in its supply chain. All of this dampens producers’ sales expectations for September. Due to the increasingly cloudy outlook for business in a number of markets as the number of coronavirus cases continues to rise, as well as the extremely high price levels for PP, many converters have begun curbing orders. For this reason, notations should remain under pressure as Q3 draws to a close. The minimal downward correction of EUR 5/t in the September C3 contract will not play that much of a role, as over the past few months polymer prices have been continuously decoupled from the monomer anyway.

PVC: August was the 14th straight month with higher prices for S-PVC, with costs virtually doubling over that period. So far, nothing has changed as regards the causes of this long-time surge. As before, it is the serious shortage of materials that is driving prices from one record to the next. The price connection to the monomer base ended long ago, and the rise of EUR 53/t in the cost of C2 in August is merely a subsidiary aspect. Because imports are still desperately lacking in the required quantities, and because overall availability continues to be extremely limited, the soaring prices will continue despite the already astronomically high price level and the small drop of EUR 8/t in the cost of ethylene in September. In the slipstream of S-PVC, compound prices will also continue to increase.

Styrenics: In August 2021, the EUR 36/t increase in SM reference caused polystyrene and EPS prices to turn upwards again. At the beginning of the month, premiums were still largely in line with the monomer price increase, but they crumbled somewhat as the month progressed due to declining demand during the holiday season. Price increases were more pronounced for ABS, where cost increases for butadiene (up EUR 225/t) and ACN (up EUR 105/t) led to a higher increase in composite costs. The still-prevailing market tightness, however, made transferring the costs easy for processors. September, meanwhile, is likely to bring back declining prices. Once again, SM reference is leading the way, and in September, it went down by EUR 91/t. In the case of polystyrene, large parts of the cost reduction are likely to be passed on to customers; in the case of EPS, somewhat less than the entire cost reduction because of foreseeable bottlenecks. With regard to ABS, market players expect a rollover or a weak rollover, as recent cost increases for butadiene (up EUR 90/t) and likely also ACN, are slowing down the decline in composite costs – and the market is still characterised by significant supply bottlenecks.

PET: The situation on the European PET markets remained glum in August. The predominantly dull weather and continuing pandemic regulations tamed demand. Production output was correspondingly calm, and at the same time imports were increasingly being consigned to history. In this situation, the only real impetus was the rise in the cost of PX. Producers were able to at least factor in proportionate increases in costs. None of the market players expressed interest in getting excited about it; the general mood is likely to remain gloomy for the time being. Feedstock prices are still moving up. Because there is no other substantial impulse in sight, the small cost increase will presumably determine pricing. Increases must therefore be expected.

 

 

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 2021: Converters hovering between hope and fear / Shortage of raw materials and crumbling supply chains lead to rising prices in many industries / Building sector up, auto sector down

The market for engineering thermoplastics continued its roller coaster of emotions in August. While prices for transparent PC, for example, remained largely stable in the final month of Q3 as the market rejected calls by one producer for increases, Hurricane “Ida”, with its still-unpredictable consequences for the supply of glass fibres, put deep furrows of worry on the foreheads of converters.

As earlier, especially in southern Europe, some PC lines were not up and running for economic reasons. Imports from Asia were also very few and far between. Despite relatively calm business due to the holiday season, delivery times did not exactly shrink but stuck at an astronomically high 25 weeks or so.

Contracts with large buyers that have now been concluded for the quarter are stable and more or less unchanged. Prices for most monthly orders are also expected to orient themselves to this. Following the euphoric forecasts for car production in the second half of the year, we are now seeing rather sober estimates based on the increasingly severe shortage of chips. This would reduce demand and put the price under pressure. Many suppliers have naturally taken advantage of the situation and kept their production lines running. Ordering activity in the building and household appliance sectors is also surprisingly lively, especially for POM and PMMA.

 

 

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 2021: Construction applications buzzing, lull in comfort segment / Upswing for components in the rigid foam sector, decrease for flexible foam materials / Limitations for MDI and solid polyols persist

Like the prices of many other materials, PU components also developed unevenly. While the prices of TDI and polyols for flexible foams declined in August due to the lull in the comfort segment, components for rigid foams continued to move upwards, mainly due to the persistently strong construction industry. But the peak seems to have been reached – the movement was considerably less pronounced than it had been in the past few months in some cases. MDI pure was one small exception that did not show strong mark-ups: the weak outflow into automotive construction freed up volumes for other applications and provided a general calm, albeit only slight.

It is likely that the respective trends will continue over the next few weeks. Prices for rigid foam components will probably trend sideways, while flexible foams are more likely to come under pressure. Overall, however, the movements should only be small.

Some maintenance work for isocyanates will follow, and some plants under force majeure are not yet running at full capacity again. As a result, the current limitations, especially in the rigid foam sector, will probably remain for a while.

 

 

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 2021: Resins market leaning toward rollover / Supply improves somewhat / Bottlenecks for glass fibre / Q4 to start with steep hikes

Price movements for medium reactive ortho resins were uneven in August. Large orders and good contacts helped in obtaining rebates. Smaller accounts, by contrast, were likely to see higher prices, despite styrene monomer prices being in free fall since June. All in all, the market saw a weak rollover.

In the shadow of excessively high level of resins prices in July, the declining SM price brought some relief in August, persuading converters to open their order books again. One obstacle, however, was the shortage of glass fibre, which consequently meant smaller resins purchases. On the whole, order volume was more modest than usual for this time of the year.

With the path of hurricane Ida passing directly over the state of Louisiana with its many petrochemicals and plastics plants, this year’s tropical storm season on the US Gulf is shaping up to be somewhat more worrisome than usual. According to reports, more than a third of North America’s styrene capacity was offline as September started. Repairs to production facilities could take weeks. Even if Europe is not directly dependent on US deliveries, the shortfall could lead to a run on material and thus to higher 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!

 

 

 

 

 Standard recyclate August 2021: Market remains inconsistent / Recyclers worried about scarce input materials / Sustainability projects and a fourth wave could intensify price upswing

It looks as if a two-tier society were developing in the Western Euopean reclaim films market: recyclers converting mixed commercial films were unable to increase their prices and also had to accept narrower margins due to increased purchase costs, while suppliers recycling production scrap managed to push through an increase. In all other respects, the summer was largely quiet.

The relaxation is likely to come to an abrupt end when buyers return from holidays. This will revive demand. The first indications can be seen in the primary sector, where prices have already increased slightly. At the same time, it shows that recyclers’ concerns about fluctuating margins and a lack of input materials will continue. If the South Eastern European markets were to join the rat race for scrap material, this competition would further aggravate the situation.

The situation with rPET is becoming dramatic. This summer – which hardly justified the name – did not really make Germans thirsty. Therefore, there is an ongoing lack of used bottles. The situation is made more difficult by the sometimes-overambitious plans of numerous brand manufacturers who have discovered sustainability for themselves and want to distinguish themselves on the market by using recyclates. In doing so, they are further draining the market of its already-slim resources. If a fourth wave of the pandemic were to occur, and if it incites staff working from home to hoard, it could drive prices to ever more ludicrous heights.

The situation with rPP homo or copo black is also leaving a lot to be desired. Wherever rare additives like glass fibres are lacking, there is a risk of costly bottlenecks.

 

 

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 2021: Recyclate seen as new supply backbone / Prices of most types continue to rise / Shortage of glass fibres provides for additional increase / Further price hike on the cards

The picture with engineering recyclate was divided down the middle in August. Prices for PA regrind remained largely stable, while those of nearly all the other secondary materials rose again, in some cases quite considerably. With the latter, the main reason was the shortage of primary products. Overall, regrind material was and still is much sought-after everywhere, often also because of the lack of imports of primary material, which usually form the supply backbone. This function has now been taken over by the recycled material.

With the end of the holiday season, fears are that the recently somewhat weaker demand will increase again considerably. This will force recyclers to buy very expensive base material, which, in turn, will be accompanied by significant price rises on the secondary market. The rising demand could, however, somewhat ease the tight situation with the respective base material, because more scrap would again be produced. One ironic point that has since come to light is that some converters actually prefer to send scrap for incineration for confidentiality reasons instead of having it recycled, because – so it is said – they want to avoid any chance that the ingredients might be analysed.

Car manufacturers are planning to raise European production significantly from September to 1.8m vehicles a month. It is, however, not clear where the material will come from, considering that even now the reduced number of orders can barely be met.

Should the latest round of price increases on the primary market currently under discussion be imposed, regrind would also become correspondingly more expensive. At the same time, prices of short-glass fibres are rocketing. In some cases, Chinese material has increased to nearly treble the usual price. On the other side of the globe, in North America, as in Europe, self-sufficiency is definitely not guaranteed.

 

 

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!