Price Reports February 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!

Standard Thermoplastics February 2015: Producers manage to pocket some of the cost relief / Suppliers'  order stops signal turnaround by mid-month / Rebound  in oil notation will likely result in increases in March

PE: After four consecutive months of decline, European PE notations bottomed out in February. Although producers passed on a significant share of the C2 cost reduction in their regular business, many of them stopped taking orders at the end of the first week, thereby raising the price of transactions made later in the month. Suppliers of niche grades, including several HDPE and some LLDPE types, only granted concessions much lower than the actual cost reduction.

The run on material early in the month, as it became evident that prices were bottoming out, was put to an abrupt end by producers' refusal to accept orders for additional quantities. Now that the triple-digit rise in the monthly ethylene contract has proved true producers’ speculations on rising notations, prices will rise across the board in March. In fact, suppliers have already announced hikes of up to EUR 160/t for tighter niche materials. For the first time in many months, imports from Iran could help limit the extent of the rise.

PP: European PP producers passed on almost all of their feedstock price relief to regular customers in February. Still, most could improve their margins for the fourth consecutive month. After only a week, however, when it looked as if the price downswing had bottomed out and amid a virtual onslaught of requests, most suppliers stopped taking orders. Top-up orders cost more. As expected, many PP compounds contracts indexed to C3 saw noticeable concessions, but the buoyant demand kept notations from crumbling further. In March, all PP grades will see hikes, with producers seeking to add a little more than the EUR 105/t rise in the propylene contract.

For compounds used in durable goods applications such as automotive or electrical appliances, prices for indexed contracts will bear the full brunt. For standard PP grades, where margins are already high, producers could face opposition. As they did not pass on all of their price relief, why should they insist on passing on all of the increase, the argument goes.

PVC: Although European PVC suppliers were able to pocket a small share of the decline in February's ethylene contract, producers' hopes for larger gains in retroactively negotiated deals were quickly dealt a blow. Even though both oil and naphtha prices firmed as the month wore on, converters were able to squeeze their suppliers for double the concessions the latter had originally been willing to make. Declining additive costs meant the fall was steeper for rigid compounds and dry blends, while flexible PVC producers mostly kept the declines in tune with the matrix material.

The downtrend was also less marked for E-PVC. Following the triple-digit increase in the monthly ethylene contract, prices will definitely rise in March, and one producer has in fact already called for a hike of EUR 100/t. It still remains to be seen whether this call will be heeded. The odds that manufacturers will be able to improve their margins, however, are quite high.

PS: The renewed decline in the SM reference contract pulled styrenics prices down in February. However, it increasingly looks like notations have bottomed out. In anticipation of rising prices, many processors wanted to order beyond their actual needs, but were quickly thwarted by producers. ABS and PS suppliers in particular closed their order books early. With strong demand strengthening their negotiating position, they were able to pass on only a fraction of the cost relief.

EPS producers were also able to improve their margins, but to a lesser extent than with PS and ABS due to it being the offseason for construction activities. After months of – at times steep – descent, styrenics prices are expected to rise again in March. After a lot of back and forth, one SM contract for March was fixed quite late and ended up rising by a massive EUR 175/t.

PET: The European PET market was a mixed bag in February 2015. Players that had not been able to receive sufficient concessions earlier now managed to secure moderate declines. On the whole, however, notations once again rose slightly. By mid-month, firming upstream notations left at least a psychological impact. Once news emerged that spot prices along the Asian polyester chain were also pointing up, notations rose slightly. Recyclate prices, by contrast, continued to decline even in mid-month.

However, firming virgin material notations could prompt a turnaround on the secondary front in March, too. Primary market prices could firm in the last month of Q1, as both feedstock and polymer producers will endeavour to reap the benefits of the slight rise in both oil and naphtha. However, demand remains rather lacklustre. As a result any potential increase will likely remain moderate.

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 February 2015: Further price erosion / Aromatic derivatives yet to bottom out / POM stable, PMMA pointing up / March likely to see further price cuts despite a revival in demand

In February, the price erosion experienced by many engineering thermoplastics in Europe continued at more or less the same pace. Contrary to the trend among standard thermoplastics, there was no sign of notations bottoming out, let alone turning around. The only materials that were somewhat exposed to this trend were the more commodity-related ABS and PP compounds, although in these cases, too, notations still pointed downwards. The downtrend was much more clear-cut for polycarbonate, the polyamides and PBT. The gas-based POM, on the other hand, was generally stable, while PMMA bucked the trend and rose again due to the tightness of the MMA market.

In March, ABS and PP compounds are likely to follow the upward trend of their respective feedstocks. The EUR 105/t rise in propylene lifted notations to a higher level, while the monthly styrene contract virtually exploded, tacking on EUR 175/t. The latter is sure to impact ABS. POM and PMMA, too, are expected to continue on their present paths. By contrast, aromatic derivatives will probably continue moving down since the cost reductions have yet to be factored in to the entire value chain. There will be some scope for negotiation in the upcoming Q2 contracts. With demand expected to revive, notations for several engineering thermoplastics could bottom out in March.

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 February 2015: Declines, some of them substantial, across the board / Supply normal to long / Downswing likely to bottom out in March

Converters’ reticence to buy made it hard for producers to hold prices anywhere near their earlier levels in February. Polymeric MDI gave way by an average of EUR 85/t, and pure MDI followed with slightly smaller rebates. By contrast, TDI notations plummeted by nearly EUR 100/t due to an oversupplied market. While flexible polyols also saw substantial price cuts, ranging as high as EUR 110/t, the rigid grades came under only slight pressure.

As notations were expected to lose further ground, buyers continued to hold back. Demand, however, received some stimulus from the footwear sector. For the most part, converters are likely to begin ordering again in March, even if the price downswing is not likely to reach bottom before mid-month.

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 February 2015: Styrene plunge pulls resins down / Surprisingly steep rise in March's SM contract clouds outlook / Chopped strand mats slightly firmer / Demand almost back to normal

As the contract for feedstock styrene crashed in February, so did notations for medium reactive ortho resins. The cumulative SM contract drop across January and February was a resounding EUR 345/t. For ortho-resins, the downturn averaged EUR 50/t in February. Downward pressure came to play mainly at the lower end of the PIE range and was especially noticeable in free trading. The quarterly contracts effective from the beginning of January held the upper end more or less steady.

Notations for chopped strand mats made slight gains in February. For standard grades, low-lying notations were pulled upward, while there was movement at both ends of the PIE price spectrum for higher-grade strand mats.

Demand picked up as the month progressed and is now back to its normal level. The automotive sector boomed, despite the absence of Russian buyers. Automotive OEM suppliers from the plastics industry, who broke sales records last year, are finally seeing some, if limited, momentum after a dip earlier in the year.

The unexpectedly sharp rise of EUR 175/t in the SM contract for March worries buyers, as the EUR 100/t rise in the ethylene contract and the EUR 19/t rise for benzene respectively led to a higher production cost of only EUR 40/t. The strong price rebound was chalked up to the "unexpected" maintenance turnaround at Total in Gonfreville / France, which market observers say will last four to six weeks. If this price level holds up, resins notations can be expected to remain relatively stable, rather than receding slightly as had been expected.

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 February 2015: Primary market declines cut down peak rHDPE and rPP notations / Prices of all other regrind materials drop / Supply normal / Further downward potential for rPS

The cost of almost all recyclates covered in this report fell in February. While the declines for rHDPE and rPP were limited to peak notations, the downtrend was more encompassing for the other secondary materials. By now, most recyclate prices have probably bottomed out. The only material that still has room for additional declines is rPS.

With the exception of rHDPE, all regrind materials were readily available. Demand was in line with a usual February, but is expected to rise in the coming weeks both as a result of the onset of spring as well as in response to economic developments. With 22 working days, March is a busy production month and demand for recyclate is likely to pick up.

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 February 2015: Notations stabilise / Only peak prices trimmed / Solely rPP slips markedly / Turnaround likely in the coming weeks

February is turning out to be a disappointing month for buyers of engineering recyclate. Following the significant virgin material declines, many had expected substantial falls for secondary material, too. So far, however, the discounts have mostly been limited to higher-grade regrind material, where suppliers were forced to yield as a result of their being in direct competition with the primary product. rPP compounds were the big exception, as rates plunged across the board. Against the backdrop of livelier demand, most other types remained stable, with the gap to the virgin material evidently wide enough to prevent any slides.

Since availability of production scrap is normal and compounding lines are running smoothly, it looks like demand will surge as spring gets under way. The excellent consumer mood translates into good economic prospects and now that prices are bottoming out, customers are no longer reluctant to buy. Many converters are looking to top up their stocks and silos. For these reasons, prices are likely to remain stable in the coming weeks, with chances for the occasional hike. However, it is also possible that some prices – on the fringes of the PIE range especially – will be lowered, especially in those cases where production scrap costs still have to pay homage to the declines of the previous months.

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!