Price Reports December 2022

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!

  Standard thermoplastics December 2022: Start price for 2023 the focus of discussions / Processors mostly able to negotiate in their favour / Demand to pick up initially

PE: During negotiations in December, the prices for the final month of the year only played a very minor role because hardly any material was purchased anyway. Producers and converters quickly reached an agreement on reductions, sometimes slightly below and sometimes slightly above the fall of EUR 25/t in the cost of the C2 monomer.  Instead, the focus during the sometimes-tough negotiations was on fixing the starting price for the contract agreements in 2023. Neither side wanted to give ground, which meant that the discussions were correspondingly fierce. In the end, the entry prices for 2023 for LDPE and HDPE were reduced significantly and, with the C6 and C8 grades for LLDPE somewhat less in view of the more balanced supply situation. In any case, many converters are intending in 2023 to reduce the volumes secured by contract agreements and instead take advantage of favourably priced spot market material.

In January, most PE prices are likely to drop further. The reasons for this are the reduction in the starting price, the latest fall of EUR 95/t in the C2 reference, the continuing influx of low-priced imports, and the still-weak demand, which is picking up only hesitantly despite some stock-building activities. The C6 and C8 grades of LLDPE are the most likely to escape this price pressure because demand is apparently gradually stabilising and there is less competition from cheap imports.

PP: What a year 2022 was! In April, the war in Ukraine pushed prices for polypropylene to heights never seen before and never anticipated - well above EUR 2,400/t, an increase of 100%. And then came the turnaround. Since then, prices have been pointing in only one direction - downward, though as in real life, everything, including polymer prices, is relative. A look at the history of PIE's continuous coverage shows that pricing is at a high level compared with the period before the pandemic.

How polypropylene will develop going forward is anyone's guess. Certainly, plastics buyers in the plastics industry have no crystal ball. The numbers show that the C3 reference sank by EUR 30/t in December, but the decline was not entirely reflected in the price of base polymer.

Due to force majeure declarations and production cuts, European output was limited. Contract commitments could be filled, however. Cheap imports, especially from Asia, widened supply. The holiday-studded short working month reflected the forecasts. As they continued to draw down inventories toward year's end, converters covered only their immediate needs.

In negotiations for the first contract of 2023, skirmishes were hard-fought. This was because in many cases, imports from the Middle East, Asia, and the US were far cheaper than European products. This played directly into converters' hands, as they could threaten to order less from their usual suppliers and instead buy on the spot market.

PVC: PVC prices continued their downward trend in December 2022. In the case of base material, weak demand and inexpensive imports put prices under pressure. The resulting downward movement also prompted further price reductions for compounds, although these were cushioned by lower cost reductions for additives, as was seen with S-PVC (U) and S-PVC (P).

Since prices for PVC base material reached their peak in April, quotations for the material have fallen 18%. December's price is also down 7% from the previous year. If we take the comparable figure for December 2020, however, when PVC was just at the outset of its almost two-year run of high prices, quotations are 56% higher.

However, much more than current costs for December, the starting price for 2023 has featured prominently during the sometimes acrimonious end-of-year discussions. Converters frequently achieved a significant reduction in the starting price by pointing out to producers that they would be covering their volume requirements to a greater extent via the spot markets in future. This argument, continued weak demand, and the EUR 95/t decline in the C2 reference, are likely to result in even more pronounced price reductions in January.

Styrenics: The bottom has probably been reached – at least for the time being. In December, styrenics prices dropped severely again after the styrene reference for the last month of the year plummeted (down EUR 132/t). Several polymer producers kept their discounts below the monomer cost reduction, pointing towards increased energy costs. Particularly for EPS and ABS, however, some suppliers passed on the full SM cost decline as a reaction to weak demand, which was further dampened because processors were reducing their stocks.

Considering the year as a whole, the landscape of polymer prices looked rather mixed. In April, ABS prices had marked an all-time high, just as polystyrene and EPS later in July. Then came the crash. The downturn led to ABS injection moulding being 15.6% cheaper in December than the same month in the previous year, HIPS injection moulding being 8.5% cheaper and EPS insulation white 14.3% cheaper. However, these decreases are put into perspective when looking back a little further: against the comparable values of two years ago, ABS injection moulding was still 27.6% more costly, HIPS injection moulding 30.3% more costly and EPS insulation white 50.5% more costly.

At the start of 2023, prices are likely to move upwards again, at least for PS and EPS, after the styrene reference for January went up by EUR 115/t. In ABS, meanwhile, the discounts for butadiene (EUR -100/t) and the expected decline for ACN are slowing down the upward momentum.

In addition, demand is picking up again. This is because many processors who, for balance-sheet purposes, made sure to keep inventories as low as possible at the turn of the year, will have to replenish their stocks. It remains to be seen how sustainable the resulting recovery in demand will be. At least in the construction sector, demand remains subdued, and ABS is under continued price pressure from low-cost imports. However, even if the demand for plastics should subside again after the inventory replenishment effects, prices will receive some support from further supply limitations when maintenance-related plant shutdowns are added on top of the existing production curtailments shortly before spring.

PET: Following the hefty turbulence of the previous months, the European PET market oscillated rather more gently towards the end of the year in December 2022. While demand remained at a miserable level, massive curtailments by producers gradually started to take effect. Inventories seem to have passed their peak already. Production in Asia was also reduced to a noticeable extent due to the weak demand worldwide, causing the most aggressive import offers to disappear. European producers seized this sliver of hope and adopted a tougher approach to the annual negotiations for major contracts. At the same time, they were able to limit price reductions to a comparatively low figure of around EUR 20/t.

The situation seems to have bottomed out in December 2022 and the signs for January are that things will calm down. Initial indications of a slight recovery are emerging from the end markets, and the supply situation would appear to be heading towards normal again. Import offers are at an appreciably higher level than of late. This would suggest that the downward trend will come to a halt.

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 2022: Weak demand lowers costs / More orders expected in some areas / Prices set to fall further in January

Not surprisingly in view of weak demand, prices of all engineering thermoplastics covered by this report fell in December. For PMMA, it was the first reduction in nearly two years.

The balanced market was able to slow things down somewhat for only very few materials. On top of that, the European market was divided into two for some polymers: while the contractual commitments in Western Europe seemed to have a stronger effect, prices to the east declined in some cases quite considerably. One note: when this report was written, only a few agreements had already been concluded.

European production was able in most cases to adequately meet the contractual obligations. An increase in Asian import volumes improved the supply situation generally and for more than just standard materials.

Encouraged by their success in December, converters will push for more price cuts at the beginning of the year. They will be helped by what are in some cases very cheap imports. One of the main arguments put forward by the converters will be their threat to dissociate themselves from the contract agreements that were preferred in 2022, and to buy considerably more material on the spot market. This will force the producers to make concessions.

With a slight improvement in the volume of orders from the automotive sector and the general stock-building measures, January should begin on a positive note. Ordering by the building and E&E sectors, on the other hand, will still leave much to be desired.

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 2022: Weak demand and cheap imports lead to price reductions / More semi-finished and finished goods from Asia / Lack of orders burdens European processors

In the first two weeks of the month, rollovers were predominant for both isocyanates and polyols. As the month progressed, however, the first price reductions were made due to an increasing influx of cheap imports – also by European producers. TDI in particular came under quite significant pressure towards the end of the month.

Overall, demand remained weak and could be met adequately despite the numerous plant outages in Europe, thanks to imports. This will also not change much in the first half of January. There might be a pick-up in demand, but it will not be all that significant. This means that prices are also likely to remain largely unchanged.

But there is one thing that worries processors more than anything: if European prices remain this high in the first quarter, more buyers will order semi-finished and finished goods in Asia. This could set the course for the entire domestic market, with European processors losing out.

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 2022: January styrene rebound makes up for December decline / Possible rollover for resins

For the most part, converters expect more of the December decline in the styrene price to be factored into resin purchase prices this month. However, the EUR 115/t increase in the January contract for the key precursor, along with the rise in spot prices to around EUR 300/t over the course of December, suggest otherwise. On the other hand, phthalic- as well as maleic acid anhydride in some cases gave up considerable ground, while propylene glycol remained relatively stable.

The overall direction is unclear. In contrast to expectations, slight price declines or even a rollover are in the realm of possible for resins as demand remains weak. At the end of 2022, so many projects were pushed into February that order activity in January should be modest.

Rumours of impending price declines for glass fibres have been widely making the rounds. At the beginning of December, rebates of 10-20% were being discussed, but by the end of the year the expectations had grown to 40%. As there was no change in December, the substantial price drop that people hope for likely to take a few days longer. That it will come is seen as a given, but the extent remains unclear.

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 2022: Prices continue to slide / Company holidays and destocking by processors depress demand / Replenishment effects expected for January

It is almost like every year, but this time, the effect seems to be particularly pronounced: before the turn of the year, many plastics processors have reduced their stocks and did not buy more recyclate than absolutely necessary for the short production month of December. This caused an already weak demand to subside even more. As was foreseeable, prices slid further down in many cases.

An outright landslide, however, materialised for rPET. Demand for the material was so weak that simply passing on the significantly lower bottle purchase prices was not enough to attract any customers. This was particularly the case for rPET flakes, where low-cost imports were competing with locally produced recyclates.

After the turn of the year, demand is likely to pick up only hesitantly, as many processors are not expected to resume production until the second week. But once they begin replenishing their stocks, it should take the pressure off prices for some recyclates, or at least reduce it to an extent.

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 2022: Price reductions dominate / End-of-year demand weaker than usual / January price cuts uncertain / Short-glass fibres face extreme hikes

In a significantly weaker December, the majority of recyclate prices reacted to the continued fall in the primary products with price reductions. Most recyclers described business as reasonably stable, with partially better availability of the somewhat cheaper regrind material. However, demand from all sectors remained very modest.

The many production cutbacks by the producers of primary products have tended to shift some of the emphasis to the recyclates, although occasional bottlenecks for regrind can be observed due to weak overall demand from converters. Further markdowns at the beginning of the year are therefore not necessarily a foregone conclusion. Instead, a rollover is more likely, and for some grades even increases – especially when glass fibres come into play.

Here, there are two exceptions: POM recyclates could come under pressure now that a primary product supplier has entered the European market with an aggressive pricing policy. Some recyclers have already announced price reductions. Polycarbonate now presents precisely the opposite picture with a large production plant currently under force majeure. Market players are not yet in agreement about whether the increased influx of imports can make up for the shortfall. At any rate, market activity in general is very inconsistent, with business certainly slack.

Anyone who previously hoarded glass fibres can consider themselves fortunate. Talk has been of increases of up to 20% in recent weeks, but there are now reports of up to 40% for January. This will drive up prices for glass fibre-reinforced recyclates significantly, even if demand does not immediately pick up again.

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!