Price Reports December 2015

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: December 2015

Standards Thermoplastics Engineering Thermoplastics Polyurethane Feedstocks GRP/Composites Standard Recyclate Engineering Recyclate

 

Standard Thermoplastics December 2015: Hikes for polyolefins and styrenics / Upward momentum slows during course of the month/ PVC and PET in weak rollovers / Notations expected to point mostly downward in January

PE: The major European buyers of polyethylene dragged the price negotiations in December on until the very last week of the year. They fought for every euro, also because bonus quantities meant that, in many cases, the order volumes were higher than normal in this short working month. On the other side of the fence, producers were determined to regain some of their lost margin territory. The net result was that the increases were generally EUR 40-50/t, which, although less than the hikes seen at the beginning of the month, were still above the nominal cost increase through the change in the ethylene reference price for December.

The weakness in oil and naphtha notations led to the announcement, shortly before Christmas, of a reduction in the C2 reference price for January. PE buyers will presumably want to benefit from at least this cost reduction, although it is likely that producers will initially offer a rollover. Should the year begin rather subdued, as generally expected, due to the continuing weakness of oil prices, at least moderate reductions will be difficult to prevent. One element of uncertainty, however, is the tense situation in the Middle East, where any escalation could influence both the global feedstock chains and polymer exports.

PP: After being caught in a downward spiral in November, notations turned around in December and pointed upward. Initially, prices added a hefty EUR 50/t or more; however, the momentum later stalled noticeably, and at the end of the month prices were EUR 10-40/t higher. In view of the stable propylene contract, producers’ margins improved. PP compounders’ contracts indexed to C3 moved sideways, in line with the monomer. At the month’s outset, demand was lively, but order activity slackened toward mid-December. Only film producers ordered continuously. All those who could shuttered production well ahead of the holidays as there was too little material in the market.

In January production cannot be expected to lengthen substantially. The C3 reference contract trended downwards quite significantly. How soon price rebates will be offered, will depend in the main on the development of demand.

Potential trouble is brewing in the compounds market. The large integrated PP players have called for "structural adjustments" in contracts indexed to C3, which, of course, means they will be seeking higher prices. While buyers are not likely to take it lying down, some of the hikes look likely to go through.

PVC: European PVC producers were engaged in a tough battle over their margins in December 2015. Their efforts to pass on the proportionate EUR 10/t rise in the ethylene price met with strong resistance. Although a few of them managed to add the occasional euro, most notations rolled over. There was little movement for PVC blends at the end of the year, despite the fact that demand was quite lively for the season. Suppliers of paste grades, by contrast, were able to pass on their higher costs without much ado. All considered, demand was surprisingly strong for a December – a likely outcome of the extraordinarily mild weather.

January’s ethylene contract was fixed lower than that of the preceding month, and base PVC producers would like to pocket at least part of the cost relief. The fact that demand is expected to be quite lively could work in their favour. On the whole, however, prices across the entire PVC portfolio are expected to decline slightly.

Styrenics:The rise of the SM reference contract by EUR 35/t in December 2015 also ended the recent month’s downward trend of EPS and ABS, after PS prices had already recovered in November. Premiums on PS often surpassed cost increases because supply was even more difficult to secure than for other materials. By contrast, ABS prices largely increased in parallel to costs while many EPS prices lay below cost rises. In general, demand was exceptionally strong for a December month until the industry prepared for its hibernation of holidays and maintenance cycles shortly before Christmas.
After the SM reference contract declined by EUR 20/t in January, prices for styrenics may point slightly downwards although producers will try to limit the extent of the price reductions.

PET: There was relatively little movement on the European PET price front in December 2015. With the cost situation stable, producers had to give up the small margin gains they had achieved in November, and most transactions were fixed at a weak rollover. Cheaper Asian imports were mostly to blame for the latest fall, and also were at the root of the slight trend towards oversupply. European production levels, by contrast, were normal for this time of year, and demand also seasonally low.

Barring any substantial changes on the cost front, there will be little impulses for change in January. So far, however, the feedstock front remains murky. If this uncertainty leads processors to hold back on their orders and should imports continue to find their way to Europe, notations will have nowhere to go but down.

Full reports available at www.pieweb.com/231607 (PE), /231612 (PP), /231617 (PVC), /231622 (Styrenics) and /231627 (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 December 2015: Polyamide prices continue to fall / PC and PMMA also slightly lower / Buyers tied to long-term contracts will fight excessive prices next year

European engineering thermoplastics prices continued to erode in December, and it was again the PA 6 grades that led the way. Free compounders had further scope for reductions as a result of the slump in base polymer prices, which are gradually reaching historical lows. The natural PA 6.6 grades were also dragged down, while the price of reinforced material remained stable due to the existence of long-term contracts and also because of the changes in flame retardants. In the case of PC, buyers continued to nibble away at the very high notations from spring, again achieving minor successes. With PMMA, too, the erosion continued. Apart from PBT and POM, the commodity-related ABS (see PIEWeb of 06.01.2016) and PP compounds (see PIEWeb of 06.01.2016) also remained stable this time.

Engineering thermoplastic prices will continue to decline at the beginning of the year, and the downtrend could gather more speed. Many customers have been sharpening their knives ahead of the upcoming important change of quarter (quarter, half-year, year). The price hike in spring 2015 – for PC and PMMA, for example – and the unyielding notations for POM and PBT despite the slump in petrochemical prices, will now be targeted by customers tied to longer-term price agreements. Polyamide notations are weakening anyway, while PA 6 is dragging its PA 6.6 relative further into the abyss. For the entire engineering polymer portfolio, quarterly buyers will seek price cuts that exceed the cost declines of the last three months. This, in turn, will pressure the monthly notations for regular business on the open market.

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 December 2015: Isocyanates mostly in a weak rollover / Pure MDI trips over imports / Polyols firm / Downturn may have ended / Uptrend likely in January

Notations for polymeric MDI as well as TDI were caught in a weak rollover in December, reflecting for the most part seasonal weakness and the low level of demand in the short production month – the same reason that led pure MDI to bend slightly under import pressure. Here, cheap Asian imports pulled prices downward somewhat. By contrast, after months of decline, polyols began firming again, as problems in ethylene and ethylene oxide supply impacted availability, while demand remained relatively robust for this time of year.

Across the board, price increases for polyurethane feedstocks, even if moderate, appear to be on the horizon for January. Even if imports may recede due to rising prices in Asia, pure MDI notations are likely to remain at their low level. Polymeric MDI and TDI are trending stable to firm, with polyols clearly firming.

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!

Composites/GRP December 2015: Ortho resins give way only slightly / No significant movement for glass fibre products / Diverging price trends likely in January

The downward trend in prices for medium reactive ortho resins lost some steam in December. After the quarterly maleic acid anhydride contract dropped by EUR 125/t and phthalic acid anhydride lost EUR 15/t, only the bottom end of the PIE range saw slight declines in December. The EUR 35/t rise in main feedstock styrene served as a cushion. No significant impetus came from the demand side. As a result, prices for glass fibre products remained largely unchanged.

In January, the market is likely to see more activity. A price decline for ortho resins seems to be shaping up in the wake of declining demand and the fall in notations for propylene (down EUR 50/t) and styrene (down EUR 20/t). Glass fibre prices should be pointing upward, and a number of producers have already called for hikes of 5-15%.

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 December 2015: Notations mostly roll over / A few adjustments here and there / Rise in virgin material only affects a few pure grades / Good scrap availability / Prices likely to remain stable entering the new year

The last month of the year was rather unspectacular for recyclers. Any noteworthy price movements were limited to natural rLDPE film grades and rHIPS. Notations for all other grades covered in this report reacted only marginally – if at all – to higher virgin prices or to the oversupply of opaque grades.

Availability of production scrap usually sufficed to meet demand – with the exception of HDPE hollow parts, which have been tight for some time already. Contrary to expectations, availability of sorted LDPE film scrap was quite good – mostly thanks to relatively low demand from China.

Both recyclate prices and the current level of demand are expected to remain stable in January. Although the end-of-year holidays are putting a damper on demand, some processors are already trying to rebuild their depleted stocks before year’s end.

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 December 2015: PA and PC downslide comes to a halt / Prices likely to bottom out soon / Demand drops significantly in December / January order books nevertheless already full

After having undergone significant corrections in the preceding months, engineering recyclate notations remained rather calm in December. The virtual avalanche in rPA prices subsided, and notations for the other secondary materials contained in this report also mostly rolled over. This gave recyclers time to catch their breath, after having had to lower their notations by up to 20% in the course of the ongoing Q4. The declines were the result of the slump in virgin material prices. Notations for primary PA, for instance, have hit a historic low following the hefty fall in the cost of benzene.

Virgin PA remains oversupplied, as does PC, although here the abundance is less acute. Both materials have, however, already paid tribute to most of the feedstock price slide. Nevertheless, there is still room for further declines on the secondary front – even if a bottom has already started to appear.

Production scrap was readily available and recyclers were able to lower the cost of their material purchases slightly compared to November. Demand is not exactly humming, and expected to decline further as the year draws to a close. Automotive suppliers are especially eager to lower their inventories. Nevertheless, recyclers already have their January order books well-filled.

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!