Price Reports February 2021
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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 2021 |
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Standards Thermoplastics |
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Standard thermoplastics February 2021: Though prices already rose considerably, upward trend to continue / No improvement in supply situation / Plastics processors have little room to counter producers’ demands
PE: The continuing shortage of polyethylene in Europe drove up prices up for all types, in some cases dramatically. What was initially dismissed by customers as sheer fantasy on the part of the producers proved towards the end of the month to be the bitter truth: the increases for film grades were sometimes above the EUR 200/t mark. With LDPE film material, increases over the last three months have totalled nearly EUR 450/t. The order situation was mostly normal to good, whether for the food sector, the beverage industry or building products. In many cases, converters were nevertheless unable to pass on the higher polymer prices to an adequate extent. The supply situation has barely improved. On the contrary, as soon as one plant restarts production, another piece of bad news comes along from somewhere else. In addition, local production plants – especially in the US – are now also having to help out with material for America, which additionally contributes to the bottlenecks. Allocations of up to 40% of the ordered quantities are normal. For March, the cost of ethylene rose by EUR 75/t. Even before the contract was fixed, some producers had announced hikes of EUR 200/t-250/t, and it is likely that they will be largely successful. Low-priced segments can barely keep pace with this price level. A great deal will depend on whether or not imports arrive in significant volumes in May 2021.
PP: Polypropylene notations shot up steeply again in February 2021. As in January, the triple-digit hikes clearly exceeded producers’ higher C3 costs. Buoying the upward momentum was the tight market in reaction to multiple plant outages, which allowed producers to push through increases at will. Rising prices for standard PP triggered higher notations for compounds, whereby leading producers’ different calculation models led to diverging hikes. No improvement is expected in the market situation in March 2021. On the contrary, it is likely to worsen. Even if some PP plants have restarted, other important production facilities are entering maintenance turnarounds. As producers have been unable to build up inventories in recent weeks, the material shortage will drive prices substantially higher. The supply side has already announced triple-digit increases again for this month. Due to the tightness, converters will not have much scope for bargaining.
PVC: The situation remains tense, and there is little sign of improvement on the horizon. A number of PVC production lines have resumed production, but others have come to a standstill in their place. For this reason, PVC producers were able not only to factor in the higher cost of C2 (proportionate increase: EUR 35/t) and energy, but also to make up losses with the caustic soda by-product via the PVC price increases. Rising costs for the matrix material and additive components also helped to drive compound prices up. Paste prices also rose. But that is not the end of the story. The high price level will continue in March, making it the 10th month in succession to see increases. The picture will again be one of rising costs combined with strong demand and inadequate availability.
Styrenics: For months, styrenics prices have known only one direction: higher! At least for polystyrene and EPS however, the premiums in February 2021 turned out to be relatively moderate in comparison to the previous two months, which had been dominated by triple-digit increases. Suppliers broadly followed the styrene reference’s increase of EUR 24/t – often, premiums on PS slightly surpassed this mark while EPS stayed slightly below. ABS was a completely different story, however: the ongoing tight market situation continued to fuel further hefty price increases, with another round of broadly applied triple-digit premiums. As a result, prices nearly reached their previous all-time highs of March 2017. The previous record high will be surpassed in March 2021, and significantly so. The price explosion was caused by feedstock styrene: the SM reference skyrocketed, going up EUR 501/t in March. This cost catapult will launch all styrenics prices skyward. It only remains to be seen whether PS and EPS producers will be able to pass on the full extent of the drastic cost increase to their customers or not. The slightly lower cost changes of ACN (up EUR 120/t) and butadiene (up EUR 20/t) somewhat mitigate this for ABS – here too, it is going to be difficult to transfer the composite cost increase of around EUR 325/t in full.
PET: The European PET market was heavily impacted in February 2021 by the worsening turbulence in the global petrochemical and logistics sectors. Just the continuation of import problems and the onset of winter in numerous European regions would have been sufficient to hit availability and drive up prices. Then came the sudden snowstorms, with temperatures down to minus 20°C in Texas that froze giant production plants there and brought the heart of the US refinery and petrochemicals industry to a standstill. For PET producers in the US, it was, above all, the extreme shortage of MEG that was the problem. Asian suppliers seized the opportunity to fill the resultant gaps on both American continents – and obtained very good prices in the process. Europe, which is not a particularly attractive destination for sellers at the moment anyway, ended up being completely sidelined. As a result, European buyers were more dependent than ever on production lines in the region, which in some cases had to battle against internal restrictions. The fact that the supply shortages were not larger is probably due to demand also still being fairly weak. The cost mix (PX/MEG) rose by around EUR 50/t, and producers were consequently able to push through increases of about twice that amount and thus gain substantial margin increases for the first time for many weeks. As things stand, it seems there will be further price hikes in March. The imbalances in the global petrochemical industry will not disappear immediately. Even if the rate of cost increases declines a little, further rises can nevertheless be expected. As far as imports are concerned, there is also no immediate prospect of the situation easing up. Coupled with a pickup in demand at the start of the spring season, price increases are probably inevitable.
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 2021: Prices continue to rise on a broad front / Plant stoppages and insufficient imports limit availability / Further price hikes likely in March
Materials are missing right and left. The continuing shortage of material combined with strong demand drove prices for engineering thermoplastics further up in February 2021. With polyamide 6 and polyamide 6.6, availability was limited because of a number of outages in feedstock production, and with polybutylene terephthalate (PBT), polyoxymethylene (POM) natural and polymethyl methacrylate (PMMA), the insufficient supply of imports had a big impact. These serious gaps in supply led to delivery times of up to four months for PA 6 and POM.
Further price rises are more or less on the cards in March 2021 for nearly all materials, in view of this diversity of factors. In the case of PA 6 and PA 6.6, the increases are once again likely to run into three digits, but with most other materials, they should be a little more moderate. The upcoming start to the new quarter should bring additional momentum.
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 2021: Notations for MDI and polyols point clearly upward / TDI may have hit its peak / Continued plant outages limit supply
As was already the case with some thermoplastics, MDI price movements have now been decoupled from production cost development. Benzene’s price fell in January, but isocyanate notations rose more sharply than expected. Even large accounts saw triple-digit increases. TDI seems to have gone as high as it can, with market development driven by the tightness of both rigid and flexible applications.
No one with whom PIE spoke thought the situation for isocyanates had improved last month. Nevertheless, supply and demand now appear to be more in balance than in recent memory. Most buyers received their contract volumes in February, and it at least looks as if the threat of a production standstill has eased considerably. Imports are still not visible in the European market, however, due to the strained situation in the US.
It looks as if polymeric MDI prices are about to peak, though caution is advised. This market is not out of the woods yet, even if the situation seems to be continuously improving – that is, assuming there are no more outages. In any case, major supply shortages may be visible for the rest of the quarter, in particular as many more producers are reporting plant outages. TDI could be the exception, though one large plant is scheduled to undergo maintenance in March. If demand from the bedding and upholstery sector picks up on the back of European governments easing pandemic-related lockdowns, supply could tighten further, leading to additional bottlenecks.
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 2021: Resins soar skyward / Spectacular rise likely in March / Upward price momentum slows buying / Glass fibre momentum flat
Ortho resins prices added EUR 90/t on average in February. The rise had little to do with the very small increase in the monthly styrene contract. This was due to the further tightening of supply in the wake of the dramatic freeze on the US Gulf as well as the many outages in Europe. Few imports were available.
The high prices have already begun to slowly reduce demand. For the time being, converters will try to avoid placing large orders. In March, styrene broke out of its already steep upward curve and soared skyward – the increase of EUR 501/t in the March SM contract was almost obscene. With prices out of control, it's hard to know whether this is "all she wrote", and believing in a turning point is wishful thinking. Resins prices will follow the feedstock upward, though the extent of the increase remains to be seen. Producers’ announcements already on the table range as high as EUR 450/t, depending on the product.
With purchasing for resins expected to be restrained, glass fibres, which had taken a break from the uptick experienced since the start of the year, will also suffer. Assembled roving were the exception, witnessing slight increases last month.
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 2021: Prices continue to rise across the board / Support from poorly available and more expensive virgin materials / Demand growing / Recyclers announce further premiums
Standard recyclate prices broadly increased in February 2021. rPE and rPS, in particular, received tailwind from increasing virgin material notations and, at least for rPE, the scarcity of primary materials. The turmoil in the virgin material market has not yet had an impact on rPP, but this is likely to follow in March.
Next month, if recyclers have their way, prices for almost all recyclates will probably continue to rise. Supply bottlenecks for polyolefins on the primary market and the general increase in demand are playing into their hands. Suppliers are also planning significant hikes for rPET, because they were not able to adequately factor in the increased purchasing costs in February.
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 2021: Major increases predominate / Base material mostly tight and expensive / Higher prices expected in March 2021 as well / No easing of the situation with PA 6.6 recyclate
The many shortages in the primary sector are also driving recyclate prices up. Apart from rPA 6.6, this is affecting in particular rABS, rPP compounds and rPC. Surprisingly, recycled POM is also seeing price increases, due mainly to a lack of imports and lively demand. In the case of recycled natural PC, the situation is so serious that even large converters from the automotive segment have made the matter of obtaining adequate supplies of raw material an absolute priority.
In the case of rPC, rABS and rPP, polymer prices have split away from their usual dependence on cost factors. Demand for natural grades was higher, and they were also more expensive. Although the glass fibre-reinforced grades have so far not experienced such large increases, the fibres are now also being confronted with longer delivery times.
In some cases, producers are finding it almost impossible to meet the high demand, with most orders now entailing longer delivery times. Furthermore, many recyclers are passing on not just the 5-10% increase in the cost of the base material and millbase, but are also endeavouring to benefit from the unusual situation by raising their margins.
Demand from all sectors remains high. So, more price increases are on the cards. Especially with recycled PA 6.6, the market is permanently undersupplied, and a rapid easing of the situation is very unlikely. Order books are already filled to the brim until the middle of the year.
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!
