Price Reports December 2019
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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! |
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Articles: December 2019 |
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Standards Thermoplastics |
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Standard Thermoplastics December 2019: Hardly any movement worth mentioning in December / Bonus purchases partially stabilise demand / Stability expected in January at first glance
PE: Polyethylene producers tried in vain in December to factor in the small EUR 10/t rise in the C2 reference. Supply was simply too good for them to be successful, and with the LDPE and LLDPE film grades they even had to grant minor concessions. At the end of it all, attempts to pass on the cost increase succeeded only with higher-specified HDPE injection moulding grades. Demand was characterised by the shorter production month of December. Converters occasionally placed extra orders to obtain their bonuses, but otherwise most of them did what they could to ensure that stocks remained as low as possible at the end of the year for balance sheet reasons. Major price movements are not expected in January either, particularly as the ethylene reference contract stayed as it was. Some producers are certainly keen to raise PE prices in view of their reduced margins, but it remains to be seen how much of an increase – if any – they can actually push though. They are probably most likely to succeed with HDPE.
PP: The small EUR 5/t rise in the December propylene reference was quickly brushed aside as prices proceeded to roll over, whereby the deterioration of spot notations played a role. With plants running uninterruptedly, there was sufficient product in the market. Demand was supported by buyers looking to reach certain bonus levels. Some producers are predicting a decline in demand in January – and thus receding prices – especially as a number of converters restocked in December. Buyers with contracts will be unable to avoid paying the generally expected minor increases. As the January propylene reference contract rolled over despite an expected increase, compounders whose contracts are indexed to C3 will not face hikes as had been feared. Reflecting the sluggish automotive economy, order activity will likely be below average – at least until the inventories converters built up in December have been depleted. Seasonal material for spring production lines could see stronger demand.
PVC: The marginally higher costs for ethylene in December were not priced in everywhere in the customary manner. While, at the start of the month, it looked as if this would happen – particularly for customers taking small quantities, virtually no costs were passed on in the further course of the month. Producers, however, also refused to grant the discounts that a number of processors were demanding. Since the price of the additive components also remained predominantly unchanged, there was similarly little movement in the compounds. The price reduction for plasticisers was the sole perceptible impulse in December, but this had no impact on flexible PVC materials. Production was generally adapted to the reduced level of demand. The ethylene reference contract for January 2020 remained at last month’s level, with PVC prices likely to be largely unchanged. While a number of production lines will be starting up at the beginning of the month already, this will be for the customary stocking up on finished and semi-finished goods. The month as a whole is thus likely to be characterised by the effects from replenishment.
Styrenics: Western European styrenics prices in December 2019 followed the EUR 47/t decline of the SM reference. In order to reduce inventories, suppliers granted price reductions above the cost decreases, especially for larger-volume purchases of white EPS and ABS. Prices for all styrenics reached their respective lows for 2019. All materials were readily available, and there was still oversupply at times. Demand was characterised by the short production month of December – many companies stopped production before Christmas and will not restart plants before the second week of January. Those processors that keep inventories low at the end of the year for balance sheet reasons did not order more than absolutely necessary. For the others, the low-price level offered a good opportunity to buy. There should be an uptrend again this month since the styrene reference contract for January 2020 rose by EUR 64/t. With the increased costs, styrenics prices will inevitably climb again.
PET: After several months of falling prices, Western European PET notations evidently bottomed out in December 2019. Prices for freely traded and large volumes remained at the previous level of just above EUR 800/t, while deliveries linked to the PX reference similarly resulted in a rollover. For the medium to small volumes subject to regular monthly transactions that PIE reports on, prices at the lower end of the range slid by around EUR 50/t. The very small volumes and specified grades at the upper end of the range remained mostly stable, by contrast, since purchasers generally had to have recourse to goods from the European production lines running at a reduced output. Prices stabilised on account of more expensive imports among other things. The new IMO provisions for global shipping coming into force in January 2020 are already making themselves felt here. The upcoming switch to low-sulphur fuels will push up freight costs by about EUR 30/t. In the meantime, changes have evidently come about in the market structure. The price spans for the different trading models have broadened considerably. Instead of the usual range of EUR 100-150/t to date, the difference between the lowest and highest prices is now more likely to be EUR 250/t or more. In addition, prices of food-grade rPET have been higher than those for primary PET grades for a good year now. The environmental debate on plastics is clearly reflected in the continuing demand for food-grade recycled plastics, which is starting to replace the dependence on primary products. While no major momentum is in sight to boost demand for 2020, and warehouses will thus remain well-filled, slight price changes may come about. The start of the year is set to be quiet.
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 December 2019: Year ends quietly / Production plants running with reduced output / January starts late because of weak automotive segment / Significant reductions announced for polyamide 6.6
As expected, the month of December ended on a quiet note. Most Western European prices remained at their November level, with the exception of the transparent PC grades, POM and PBT, which trended very slightly lower. In the case of POM, the dwindling flow of imports from Asia provided for a certain stabilisation, otherwise prices would presumably have dropped by a larger amount. Only PMMA lost significant ground.
Most production plants were running with reduced output to prevent stocks from overflowing. With PA 6.6, the closure of the ADN facility in France for maintenance was barely noticed because of the healthy stock level, and the weak demand from car producers balanced things out.
Only with polyamide 6.6 is there expected to be any significant movement on the price front in January. Most of the large producers announced considerable reductions before the end of 2019, usually in the triple-digit range, with some companies ready to grant cuts of up to EUR 300/t. Reinforced types as well as materials for automotive applications will likely be affected to a lesser extent. All other grades covered by this report will probably remain unchanged in view of the lack of contract agreements for the first quarter and the continuing weak demand. The production cutbacks with polycarbonate could well have an effect.
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 December 2019: Isocyanates and polyols plunge / Market oversupply meets weak demand / Outlook sobering
With the end of the year approaching and demand still sluggish, rebates were widely spotted across all segments of the Western European market in December. As producers rushed to empty inventories before the new year, price cuts were often deep. The “fire sales” pushed notations for small accounts down by about EUR 55/t on average. Large accounts profited from prices around EUR 60/t lower. The recent rise in the benzene notation did nothing to support price levels.
Notations for pure MDI deteriorated more sharply than for the polymeric grade. This was due to sinking demand for footwear and TPU, which had been ordered relatively well up to then. Despite the maintenance turnaround at BASF in Ludwigshafen / Germany, MDI supply was rather long. Lengthening the market further were Asian imports that washed over into Europe.
The erosion of polyols prices continued and gathered a little more momentum compared with the recent past. This was presumably due to the lower notations for olefins.
In the meantime, automotive is not the only segment ordering sluggishly. The trade conflict between the US and China, market oversupply and the sobering economic outlook for the coming weeks were also factors depressing demand in December. The outlook therefore is for further price deterioration with supply continuing long and demand remaining weak.
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 December 2019: Market remains stable as the year turns / SM price rise could lead to firming in February / Glass fibre unchanged
With demand weak, the resins price took another steep nosedive in Western Europe in December. Standard grades and price levels that were previously low were the most affected. The principal starting materials phthalic anhydride and styrene gave up further ground.
As trading ramps up, the market will see a bit of refilling. The clear increase of EUR 64/t in the price of styrene is unlikely to have much of an impact initially, so that resins notations may well roll over.
Order activity may not ramp us as quickly as usual after the Christmas break this time, due especially to the automotive industry’s late restart. That said, some application sectors, in the main, sheet for the recreational vehicles market – which has enjoyed relatively strong demand of late – could liven up.
Not all supply contracts for glass fibre products for the first quarter had been finalised at press time. Major movements don’t seem to be on the horizon, though. An anti-dumping investigation concerning imports from Africa and the Middle East could lead notations for some glass fibre products to firm in the medium term.
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 December 2019: Sliding virgin material prices depress prices for pure grades / Oversupply for almost all grades / Demand ebbs at the end of the year / Hardly any change in January
Most recyclate prices eroded further in December 2019. The abundant supply as well as discounts for virgin materials exerted pressure on the secondary market and, above all, on pure grades. Demand remained weak as well. In addition to seasonal effects, the brevity of December as a production month also made itself felt. For balance sheet reasons, the processors also did not order more than absolutely necessary in order to keep inventories as low as possible at the turn of the year.
Many recyclers and processors will close for company holidays during the Christmas holidays and not resume production until the second week of January. Output is correspondingly low, but so is demand, which means that the existing oversupply is unlikely to change much. As the market will be rather hesitant to wake from hibernation, no major price movements are to be expected for January.
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 December 2019: Prices down for nearly all regrind types / Significantly weaker demand at year-end / Nevertheless surprisingly strong order-book situation for January and February
Most of the recyclate types covered by this report underwent very significant price reductions in December, mainly attributable to the falling prices for the respective primary materials. Even with the still high-priced rPA 6.6 product, recyclate producers were unable to escape making minor concessions to stimulate sales. Only rPOM remained surprisingly stable. With business weakening significantly as the year draws to a close, the recycling companies are taking advantage of the opportunity to carry out maintenance work.
Against the background of the continuing crisis in the automotive industry, the number of incoming orders for spring 2020 is surprisingly good. In fact, January already seems to be almost sold out. A certain topping-up effect is evidently taking place again, although last year it was not so marked. Compounding lines are therefore likely to be started up relatively quickly in January in order to be able to meet the stronger 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!
