Price Reports December 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: December 2016
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

 Standard Thermoplastics December 2016: Cost developments mostly passed on / Polyolefins and PVC point down / Styrenics in steep upward flight / Moderate rise for PET / Producers planning January price offensive

PE: There was little discussion among European PE market players in December, and in most instances the decline in the ethylene contract was passed on in full. On some occasions, the cuts were a little smaller – as with HD blow moulding – or a little higher – as with LLD (C4). In most cases, however, notations reflected the cost decline. Availability trended slightly long as a result of the bank holidays.

Producers will step up their game in January. Not only do they plan to factor in the latest increase in the ethylene reference price, they are also resolved to recover some of their lost margins. The creeping margin erosion of 2016 is to be put to an end, suppliers agree. The big question is not whether they will succeed at this, but how much they will manage to obtain. If the upward price trend continues, customers could start building up stocks, which would push notations up even further.

PP: Almost all attempts by producers to hold rebates to less than their cost relief in December 2016 came to naught. The market was too balanced, despite production levels being adapted to the slack end-of-year demand in the short working month of December. Compounds producers also passed on their entire cost relief without much ado.

Headed into January, producers are determined to pass on not only their higher costs. They are also calling for structural adjustments, accompanied by plans to curb or cease output of materials with weaker margins. Although it remains to be seen how much they will be able to achieve in the end, there is little doubt that the trend is pointing upward.

For compounds, too, producers will pass on their higher costs. The new system of indexing notations to standard PP could lead to stronger than usual price momentum.

PVC: Despite putting up firm resistance, European suppliers of most PVC grades ultimately had to bow to the market reality in December and lower their prices. Their goal of improving margins proved a pipe dream. It was entirely different for flexible compounds, however, as the shortage in global plasticiser availability took on dramatic proportions at times. In the final tally, notations for PVC (P) compounds even rose slightly.

The increase in the latest ethylene reference contract is expected to pull the entire PVC portfolio up in January, with disproportionate increases likely for flexible compounds.

Styrenics: Styrenics prices skyrocketed in December following the significant increase in the SM contract, with PS and EPS scoring triple-digit hikes. Although the uptrend for ABS was limited by the rollover for butadiene and the decline in the ACN contract, notations still reached their highest point of the year in December 2016. The significant price increases further diminished processors’ buying mood at a time when many of them were anyhow trying to keep stock levels low for their end-of-year balance sheets.

Yet, the final word on the uptrend will not have been said in December. Already there are signs of another increase for January’s SM contract, which will invariably take styrenics prices up with it. The widely expected rise will be even steeper for ABS following the EUR 140/t hike in butadiene.

PET: European PET prices rose slightly in December 2016, with the hikes ranging from EUR 10/t for medium-sized orders to EUR 45/t for smaller lots, yielding a rather heterogeneous price picture. Demand was muted, as expected. The increases were set against an earlier uptrend in Asian notations across the entire polyester chain. As a result of the weakening euro – or, more accurately speaking, the strengthening USD – competitively priced imported material quickly disappeared, allowing European suppliers to pass on their moderate cost increases. Anything beyond that, however, was not possible.

Headed into January, costs continue to trend up, which could lead PET notations to increase in the first month of 2017 as well. The price of Asian material is not low enough to prevent producers from trying to factor in any potential cost 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!

 

 Engineering Thermoplastics December 2016: Little movement as the year draws to a close / PMMA continues to rise / Producers plan January offensive / Rising costs / Price hikes highly probable

As predicted, there was little movement on the European engineering thermoplastics market in December. Most producers were busy gathering ammunition for the price offensive planned for Q1 2017. Converters, for their part, were not impressed, focusing instead on preparing for the holidays. PMMA was the only exception, as some of the quarterly increases were factored in again. For the commodity-related materials, ABS rose markedly in response to the extreme rise in December’s styrene reference price. By contrast, PP compounds notations fell slightly. Here, too, feedstock price developments set the tone.

If producers have their way, the period of calm will come to an abrupt end early in the new year. A number of them have already called for triple-digit hikes for numerous materials. As usual, the brunt of the offensive is directed at the quarterly notations, although it will certainly also impact the regular monthly distribution and trade business. PC and polyamide prices in particular are expected to rise, and PMMA continues to move up anyway. Driven by higher costs, ABS notations are also likely to increase. PP compounds are headed in the same direction, as the widely expected rise in the price of the standard materials will inevitably leave its mark.

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 2016: TDI and polymeric MDI move higher / Plant outages limit deliveries amid relatively strong demand / Markets wait for idled plants to restart

Both polymeric MDI and TDI prices moved higher, by EUR 60/t on average, in December. The outage at a large European producer meanwhile is having a bigger impact on the market than a few weeks ago. As a result, supply is noticeably restricted. Allocation is the rule rather than the exception, as the tightness coincides with relatively strong demand from all applications sectors. The short working month of December does not appear to be putting the usual damper on demand.

In the polyols market, price stability was the watchword in December. Solely the flexible grades saw minimal increases, but this had nothing to do with the force majeure at a major propylene oxide producer at the beginning of December.

The restrictions on production are likely to last a few more weeks – exactly how long is hard to determine. There is at least a theoretical possibility that some of the TDI plants currently off stream or operating below capacity will be ramped up in the near future and the FMs lifted. If they do come back on stream at the beginning of January, it should bring some needed relief to the market. A slight upward momentum is still likely to be seen in any case.

 

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 2016: Resins prices begin to point upward / Firming styrene continues to drive / No noticeable movement for glass fibre products as yet

The upward trend in prices for the key feedstock styrene, which began in October 2016, continued into December and pushed notations for medium reactive ortho resins upward by about EUR 35/t on average. Even if the cooling of demand in December was not as pronounced as in previous years, order volume still fell back noticeably. The automotive industry still ordered relatively well, however. As the styrene contract price rose again in January, it is clear that the upswing in notations for ortho resins will not come to a halt anytime soon. It is entirely conceivable that prices will rise by a similar margin as in December. The producers' first thrust towards this goal will probably not succeed, as demand in the first month of the year is not strong enough to support an increase of this dimension all at once.

It was mostly all quiet on the glass fibre market at the end of 2016. A minor deterioration in the range for assembled roving was so unspectacular as to have no overall influence on pricing. Large accounts saw no change at all.

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 2016: Notations still trending down / Only rPET rolls over / Poor demand / Bottom could soon be reached / Virgin market developments have stabilising effect

Notations for most standard recyclate materials proceeded to crumble in December 2016, continuing the trend of earlier months. The only exceptions were rPET and select rPE grades, notations for which rolled over. Availability of rHDPE, rPS and rPET trended long. In the cases of rHDPE pipe and rPS, demand was dampened by seasonal and end-of-year effects. As for rLDPE film, rHDPE injection moulding grades and rPP, low-cost virgin material imports offered a competitively priced alternative.

Market activity is expected to decline a notch in the coming weeks, as many recyclers and processors will close up shop during the holidays. In their talks with PIE, a number of players said they expect little movement for most recyclate prices, many of which are held up by rising virgin material notations.

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!