Price Reports February 2020
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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: February 2020 |
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Standards Thermoplastics |
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Standard Thermoplastics February 2020: Coronavirus dampens existing buyers' reluctance / First calls for increases arose towards end of February / Focus will be on improving margins in March
PE: Depending on the product, producers were calling for price hikes of up to EUR 30/t, and in some cases EUR 40/t, but managed at most to win only about a third of this, for example with the LD film and standard LLD film grades. Most buyers of the other types covered by this report obtained a rollover. With the injection moulding materials, only prices at the bottom of the range saw any increase. The reason was converters reluctance to purchase when it became apparent around mid-month that the cost of C2 would more than likely fall. For certain applications, the coronavirus put an additional damper on business. The EUR 50/t reduction in the C2 reference at the beginning of March is expected to push prices of all materials down. Although producers will want to pocket some of the decrease, it is questionable whether they will succeed. While the price reduction could provide some sort of stimulus, demand is rather shaky in view of the virus. Injection moulding grades could, depending on the origin, become somewhat less readily available.
PP: Producers’ half-hearted attempts to, alternatively, stave off margin erosion or make margin gains were not crowned with success in February, in particular as they lacked cost increases as an argument. They were only able to lift a few low-lying notations, but this did not affect the PIE range. Converters bought only what they could not do without and otherwise drew down inventories, putting a considerable damper on order activity. The few minor supply limitations were balanced by slack demand. In an attempt to expand margins again, producers will try to hold prices steady in March, despite the cheaper propylene reference. The forecast increase in demand and production requirements for this long working month should help their cause. Planned maintenance turnarounds in Western Europe could be balanced by Russian imports, at least for standard grades. For other products, buyers could see supply bottlenecks here and there. The market for compounds saw no momentum at all in February as the traditional markets – automotive and white goods – showed few signs of life. As supply normally earmarked for those sectors has already been adapted to the soft demand, they appear to be in balance.
PVC: Demands for hikes of EUR 40-50/t for PVC base polymer were voiced by the producers at the start of February already, since they regarded their margins as too thin. Although they met with little success in the first couple of weeks, partial increases were achieved midway through the month. Various minor incidents, including maintenance and shutdowns, boosted producers’ demands for hikes. These curtailed supply in some cases, while higher volumes were being ordered at the same time. Despite the EUR 50/t reduction in the ethylene reference contract at the start of March, producers intend to stick to the rollover that they were targeting in the case of the base resin. The aim is to maintain margins wherever possible. They are likely to be supported by increased call-off orders from major customers, the longer production month and the pre-season preparations. There are also a fair number of restrictions on production, which will likely result in noticeably poorer supply. For compounds, there is little scope for manoeuvre despite falling costs, and price reductions can hardly be expected. Pastes could be affected to a greater extent given their larger exposure to the feedstock. Only the already fixed quarterly prices will most likely prevent more pronounced slippage.
Styrenics: In February 2020, one of these waves reached a new peak. This was due to the renewed increase in the styrene reference (up EUR 50/t). Producers were most likely to be able to pass on the cost increase to customers at the beginning of the month. Over the course of February, they saw themselves increasingly compelled to make concessions in order to sell any quantities at all. The already ample supply of all grades was compounded by a processors’ reluctance to buy – they were counting on price reductions in March due to declining styrene spot prices. These speculations seem to be paying off. The styrene reference for March dropped by EUR 126/t. Even though producers will try to retain a part of the cost reduction, markdowns are thus foreseeable – the crest of the wave is breaking. The coronavirus epidemic has so far had no effect on prices in German-speaking Europe, but has had an impact on order size. Some processors stocked up on materials as much as they could, while others applied the brakes sharply. Producers also felt the effects in markets such as Italy, where plant closures have already occurred. There are fears that the epidemic could also severely affect logistics.
PET: As expected, a reticence permeated the European and global PET markets in February again. The crisis-like developments with the “Covid-19” coronavirus depressed the mood further. Since outflow remained low, the markets were still oversupplied. Although export activity from China declined somewhat, all the warehouses in the chain remain well stocked. Imports are still available but no longer particularly attractive in price terms. Western European prices thus fell slightly, although the costs of PX and MEG had risen somewhat in January. Price reductions resulted for small quantities, in particular. At the lower end of the price range there was less scope for suppliers, but special conditions were agreed on at times here too. Notations for large quantities and spot transactions remained around EUR 200/t below those for the regular, freely negotiated monthly transactions for smaller quantities. Regrind remained more or less stable. The fact that it is more expensive than virgin material is no doubt the new norm now. Demand is expected to pick up with the start of spring. In view of the sluggish situation prevailing overall, however, the question arises as to how far empirical values can currently be used for a forecast. In addition, developments regarding the coronavirus are unpredictable. It would appear quite feasible for areas to be sealed off, coupled with panic buying and production stoppages at facilities all along the value chain. In addition, costs have significantly decreased, and this will also have a substantial impact on the price of PET.
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 February 2020: Price stability on a broad front / Quarterly agreements provide support / Demand slightly above expectations / Differing trends likely in March
At first sight, Western European engineering thermoplastic prices in February presented a picture of standstill, stability and stagnation as they remained without exception at the previous month’s level. The main reason was that long-term sales agreements stabilised prices, but under the surface, a number of developments were emerging that will lead to differing movements in the coming months.
With transparent PC and PA 6.6, a downward potential dominates. The former is likely to come under pressure from the fall in the benzene reference contract, while with PA 6.6, there are contributions from the still high price level and continuing slump in the automotive industry.
PA 6 and PMMA, on the other hand, could witness some increases, although they are unlikely to have much of an impact until the start of Q2. In both cases, calls for price hikes by feedstock suppliers are casting their shadow before them. With PBT and POM, too, prices could trend upwards sooner or later if an insufficient inflow of imports from Asia should restrict the supply situation here.
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 February 2020: Isocyanates give way / Chinese virus epidemic pressures pure MDI sharply / Producers hike polyols / Exports to China much diminished
Notations for all three reported isocyanates gave way in February. MDI and TDI eased slightly, with the latter beginning to feel the influence of the Chinese coronavirus outbreak as well as producers’ lower costs.
Of the three, pure MDI was most severely affected, due to its dependence on the beleaguered Chinese footwear industry. Parallel to this, the needed structural price correction that began in September 2019 continued. As this market is comparatively tighter than that of the polymeric grade, it usually reacts more intensely to outside influences such as the current epidemic.
Polyol prices gained ground after producers made it more than clear that their dwindling margins were beginning to bite.
Over the coming weeks, producers of polymeric MDI will step up efforts to lift prices, in the hope of achieving at least some of their envisaged increase. With a cumulative benzene price increase of nearly EUR 200/t, their margins are now hovering around the 2016 level.
On the whole, the in part dramatic inventory buildup in China is contributing to oversupply of the European market, with its severity varying from product to product. The blockage of the Asian export window may well put pressure on prices. Whether the recent trend toward normalisation can enable producers to turn the situation around remains to be seen.
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 February 2020: Styrene rise pushes prices higher / Demand visibly slowing / Uneven development for glass fibre products
Uncertainty had the Western European composites market firmly in its grip in February due to the coronavirus, which also led to the postponement of the “JEC World” trade fair. With the usual delay, the uptrend of the SM price that continued into February pushed notations for medium reactive ortho resins strongly higher. The surge even hit large accounts. Helping to influence the trend toward month’s end was the absence of phthalic anhydride imports in the European market as the coronavirus led to lower utilisation of Chinese production capacity. The rollover of the Q1 maleic anhydride contract also made its influence felt. In Italy, where the virus interrupted everyday life, production facilities apparently operated normally. In the second half of the month, demand began to slacken noticeably.
As March started, the reference for principal resins feedstock styrene changed its earlier upward course and dropped by EUR 126/t, wiping out earlier gains. In spot trading, the downswing has been somewhat more pronounced. Uncertainty continues to grip the market. Buyers of both ortho resins and chopped strand mats are ordering relatively little, and the usual seasonal impetus has not materialised. The most likely scenario for resins this month is a rollover. At the start of the second quarter, the market could begin seeing some downward correction. Until then, producers will try to hold prices stable.
Despite the first timid signs that China may be over the worst, order volume will probably continue thin for a while. The virus epidemic is leading many buyers to exercise caution, in particular those with connections to China and Italy. In the glass fibre segment, supply is likely to continue without interruption, although in the medium term the modest punitive duty on Egyptian material could play a role in pricing.
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 February 2020: Notations largely stable / Only a short breather / Further price erosion likely / Slightly higher demand generally not meeting expectations
In February, most standard recyclate prices in Western Europe remained at January’s levels. Only recycled polypropylene copo saw a slight increase, while rLDPE natural film grades and rHDPE blow-moulding grades experienced a small drop. Recyclers generally rejected demands for price reductions. In view of the higher costs, they had to accept further margin losses without making concessions.
Demand is picking up, but not as vividly as many had hoped for – with the exception of rPP. For many grades, the trend toward oversupply is therefore predominant.
At least with rPE, further trouble is imminent. Apparently, February’s recyclate prices only took a short breather, and the ongoing downward trend for rPE is likely to continue next month. For rPP and rPET, however, slight increases are possibilities.
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 February 2020: Recycled ABS, PA and PC see a few price cuts / Weak demand slows business considerably / Coronavirus delays mould supplies from China
ABS, as well as some lower-specified polyamide and polycarbonate types, suffered heavily from the weak demand and in some cases also from the major product surplus. Recyclate producers were unable to keep prices stable in February despite all their efforts and in most cases had to reduce prices by around EUR 20/t. Plans to win at least a small increase have presumably been postponed definitively to the second quarter.
With ABS, the cumulative EUR 114/t increase in the cost of styrene over the last two months could push the price of virgin material up far enough to halt the price erosion of regrind material, which started after the surprisingly good business in December. At any rate, the short-term outlook does not show any sign of a revival – on the contrary. The price pressure will continue.
Recyclers’ hopes are based on the longer production month of March and at least a minor spring revival. There are, however, not yet any signs of this. It is highly unlikely that there will be a quick turnaround in the downward trend with rABS, rPA and rPC. An additional difficulty in terms of demand is that supplies of moulding tools from China are considerably delayed because of the coronavirus epidemic.
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!
