Price Reports February2016

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:   February 2016

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

Standard Thermoplastics February 2016: Notations mostly follow feedstocks down / Signs of imminent bottoming out drive demand / SM contract for March skyrockets / Stability likely for all other materials

PE: Following the course embarked upon in January, the downslide in European PE prices gathered further momentum throughout February. By the end of the month, most of the price cuts introduced slightly exceeded the fall in the ethylene contract. Nevertheless, producers’ nominal margins remained about twice as high as where they stood before spring 2015 because most converters were unable to realise their calls for triple-digit reductions.

From the suppliers’ perspective, HDPE injection moulding grades held up best of all, whereas HDPE film grades at times saw triple-digit cuts. This puts them at the lower end of the scale of PE film types, a place they have traditionally occupied. The price of HDPE pipe grades also slipped significantly, with standard material shedding close to EUR 100/t. In this respect, the initiative launched by producers last year to decouple prices from the C2 notation has now paid off for pipe manufacturers.

Since most buyers expected prices to bottom out fairly soon, demand was very lively. The resultant sales of off-spec grades, special reserves, inventoried material and imports will likely result in a mostly normal supply situation in March. At the same time, oil prices seem to be firming. On the other hand, the decline in the monthly ethylene contract was rather small and demand is also expected to decline over the Easter holidays, especially towards the end of the month. As things stand, it looks as though these contrasting factors could combine to keep prices stable.

PP: As February began, it quickly became clear that producers' hopes of improving margins would not be fulfilled. The market was simply too long. In the end, the supply side had to make concessions of at least EUR 60/t, in line with the propylene cost reduction; in some cases, the rebates were even slightly higher. The market was sufficiently supplied, with off-spec material and special offers – some of it from imports – enlivening demand. In the homopolymer segment, Russian material lengthened supply. Offtake was just as lively, as many buyers sensed that prices were bottoming out and refilled inventories accordingly.
In the compound segment, the “structural adjustments” launched by a leading PP producer began to have an impact. The same calculation for contracts indexed to C3 is still in play, but the base price is higher. The end result was that concessions were less generous than the supply side’s cost relief might have warranted.

The outlook for March is for a quieter PP market. To start with, feedstock propylene was in a weak rollover. The early Easter holidays will dampen activity in all segments in the second half of the month. Although film producers plan to work through the holidays, they will not be operating at full capacity. Many injection moulders – as well as compounders – will take a break. Apart from that, a number of maintenance turnarounds are scheduled for standard products.

PVC: Notations of all PVC grades covered in this report fell in February. The main reason for the decline was the EUR 70/t drop in the monthly ethylene contract, half of which was proportionately passed on in most base PVC prices. The market leader’s efforts early in the month to lift margins met with little success since most other producers lowered their prices by EUR 35/t in the face of good availability.

The ongoing decline in notations for additives titanium dioxide and impact modifiers also pressured PVC compounds prices. Solely in the case of paste grades was lively demand from the construction sector able to prevent notations from caving in too much.

Despite the renewed slight fall in ethylene, base PVC notations will likely roll over in March. While demand is picking up, availability will tighten as a result of maintenance turnarounds at several plants. At the same time, rising notations in North America mean imports from this region to Europe will wane. In fact, there are already signs that some European output will be exported. On the compounds front, there is no impulse for an additional price decline either.

Styrenics: The EUR 50/t decline in February’s SM reference contract dragged down the prices of all styrenics. Even ABS was unable to evade this trend, especially as the cost of both butadiene and ACN dropped, too. Producers’ attempts at pocketing part of the cost decline did not always succeed – and if they did, the gains were smaller than planned. However, headed into March processors should calculate with higher prices.

The massive increase in the SM reference contract will drive prices up across the board and the onset of spring will fuel demand in many areas. Some suppliers apparently intend to pass on the entire cost increase at least. One of them has already announced a hike of EUR 120/t for polystyrene and EUR 100/t for ABS, with another following suit, albeit with increases of a slightly smaller scale.

PET: After buyers of bulk lots of European PET had already succeeded at gaining sizeable discounts in January, notations for small- and medium-sized volumes followed suit from calendar week four onward. By the end of February, the rather heterogeneous price development of the first two months of 2016 had resulted in an average decline of EUR 80/t, bringing PET prices down to a level last seen in crisis-ridden 2009. There are reports that notations for small- and medium-sized lots are approaching those of bulk volumes, mostly as a result of strong activity on the spot market. Contracted deliveries are under rising pressure, and some are already in the process of being broken up. Demand rose considerably in February, as processors started to build up their stock levels ahead of the onset of the beverage season.

On the recyclate front it was higher-quality regrind capable of competing with virgin material that was under most pressure. Following the slide in primary market prices, additional declines are in the cards. However, after their renewed fall in February, prices along the PET feedstock front now appear to be firming.

This trend has given producers hope that they might be able to lift notations moderately in March. They could just as easily fail – in southern Europe especially, the market remains well supplied with imports. Needless to say, north European processors also want to pay as little as possible. If notations continue to decline, producers' margins will hit such a low point that their very existence could come under threat.

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 2016: Downtrend gains momentum / Cost reductions meet strong output, imports and weakening demand / Price pressure to continue in March

There was a sense of gloom permeating the European engineering thermoplastics production market in February, with prices eroding almost everywhere. In some cases – with PBT and PMMA, for example – the lower Q1 agreements affected notations, whereas in others – among them ABS (see PIEWeb of 03.03.2016) and PC – lower feedstock costs took their toll. The latter impact was less pronounced for PP compounds due to the “structural adjustments” starting to have an effect (see PIEWeb of 03.03.2016). In the case of POM, the pressure came primarily from imports as well as falling recyclate prices (see PIEWeb of 18.02.2016).

The polyamide chains currently constitute a particular worry for producers. The global overcapacities for feedstocks such as caprolactam and base polymers are becoming increasingly apparent, pushing PA prices into a virtually unstoppable slide. There is no end in sight yet to the erosion, not least since demand is currently on the sluggish side.

While the decline in commodity-related ABS and PP notations could come to a halt soon, the price pressure on nearly all the "traditional" engineering materials could continue into March, with a number of factors working together. In the cases of PBT and PMMA, the price reductions granted in the quarterly contracts will still be factored into the distribution and compound businesses in the last month of Q1. Imports continue to pressure European POM producers, while both PC and especially PA remain dogged by oversupply. Production cutbacks will do little to change that underlying reality, in part because of the inevitable drop in demand in March due to this year’s early Easter holidays. Apart from that, the signs from the automotive sector are not exactly encouraging.

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 2016: Downtrend gains momentum / Cost reductions meet strong output, imports and weakening demand / Price pressure to continue in March

There was a sense of gloom permeating the European engineering thermoplastics production market in February, with prices eroding almost everywhere. In some cases – with PBT and PMMA, for example – the lower Q1 agreements affected notations, whereas in others – among them ABS (see PIEWeb of 03.03.2016) and PC – lower feedstock costs took their toll. The latter impact was less pronounced for PP compounds due to the “structural adjustments” starting to have an effect (see PIEWeb of 03.03.2016). In the case of POM, the pressure came primarily from imports as well as falling recyclate prices (see PIEWeb of 18.02.2016).

The polyamide chains currently constitute a particular worry for producers. The global overcapacities for feedstocks such as caprolactam and base polymers are becoming increasingly apparent, pushing PA prices into a virtually unstoppable slide. There is no end in sight yet to the erosion, not least since demand is currently on the sluggish side.

While the decline in commodity-related ABS and PP notations could come to a halt soon, the price pressure on nearly all the "traditional" engineering materials could continue into March, with a number of factors working together. In the cases of PBT and PMMA, the price reductions granted in the quarterly contracts will still be factored into the distribution and compound businesses in the last month of Q1. Imports continue to pressure European POM producers, while both PC and especially PA remain dogged by oversupply. Production cutbacks will do little to change that underlying reality, in part because of the inevitable drop in demand in March due to this year’s early Easter holidays. Apart from that, the signs from the automotive sector are not exactly encouraging.

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 2016: All products move downward / MDI and TDI follow aromatics / Steep erosion for polyols as olefins slip / Good availability despite lively demand / Trend may bottom out in March

European notations for all polyurethane feedstocks saw strong erosion in February as oil and naphtha continued falling and pulled benzene, propylene and ethylene down with them. With supply long – due especially to Asian imports of MDI – producers had no choice but to make concessions. As a result, prices for MDI and TDI slipped by EUR 20-50/t, while polyols in some cases saw triple-digit setbacks. For the most part, the respective markets were well-supplied – in some cases oversupplied – despite brisk offtake from the automotive industry in particular.

Although the downtrend will likely continue in March, it is expected to come at a more moderate pace and notations could even bottom out. As the spring season gears up, the chance to buy at lower prices will undoubtedly fire up demand. A lot will, of course, depend on price developments farther upstream in the oil and petrochemical sector.

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!

GRP/Composites February 2016: Ortho resins slip again slightly / Downswing bottoms out / Sharp rise in March styrene contract has little effect / Glass fibre prices unchanged

Notations for feedstocks styrene and propylene fell again in February, putting downward pressure on medium reactive ortho resins prices. However, after persistent downward momentum in the preceding months, the decline was rather small this time. Significantly rising demand was the most obvious explanation for the trend. Order activity in February moved back closer to the usual seasonal level. Market movement was less dynamic, however, as the automotive industry returned from its holiday break later than usual. The livelier order activity gave rise to some degree of tightening toward the end of the month, though nothing at all dramatic, according to players with whom PIE spoke.

Glass fibre products saw relative stability in February. This was also the case for direct roving, which had been rising recently. For all three grades covered in this report, there were a few increases here and there, but these had little effect on the PIE range. The upcoming "JEC" Composites show in Paris will set the pace for market development in the coming weeks. In the meantime, demand for glass fibre should remain sluggish. While it is still possible that prices could come down when punitive duties on Chinese material are removed, converters should not get their hopes up.

With the EUR 100/t surge in the styrene contract for March, the downswing in ortho resins prices will most likely come to an end. Nevertheless, as demand has not yet rebounded to its usual level, and the Easter holidays will be early this year, a rollover is the most likely scenario for March. As the other major raw materials – propylene, maleic acid anhydride and phthalic acid anhydride – are showing weakness or pointing downward, they will not provide any impetus for firming 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!