Price Reports February 2023

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 February 2023: Downward trend in quotations for several grades halted for the moment / Curbed production meets weak demand / Hopes pinned on seasonal upturn

PE: The industry has still not managed to pull itself from its vale of tears: production, demand, consumption – everything is weak. Converters are sensing just as little of that spring feeling as producers, and the eagerly awaited stock-building activities are simply not happening. Buyers are ordering only what they absolutely need – due not least to the fact that the overall price level has risen, with the C2 reference up EUR 85/t in February, triggered by the previous massive increase in the cost of naphtha. Things look particularly bleak in the beverage industry. Actually, it should now be starting pre-production beginning in April for warm summer months. But, evidently, nothing has yet happened. Industrial packaging and the mail-order business are also not particularly good, and the construction industry is very much in the Doldrums, too. It does at least look a little rosier in the automotive segment and in food packaging. In the case of the latter, preparations for Easter business are making themselves felt. And, as far as car sales are concerned, March typically represents a seasonal peak for new registrations. This lifted the mood in February, but it does mean that another cooldown can be expected in March. The cost of C2 feedstock has risen EUR 30/t in March, which will presumably also slightly boost polymer prices. Nevertheless, there is still a lack of incoming orders, which is why overall demand is unlikely to return to its normal level just yet. Generally speaking, it can be said that the lead time for incoming orders for converters has declined significantly. For many companies, this is making planning for the coming months much more difficult.

PP: The downward trend in PP prices that persisted for nine months, except for a slight rise in November 2022, has been halted, at least for the moment. In February 2023, the polymer began turned upward again on the back of a EUR 80/t increase in the price of propylene feedstock. Initially, producers insisted on passing through the cost increase in full, but over the course of the month most of the hikes began to shrink, and in the end many products cost only EUR 50/t more than in January. Homopolymer even saw a rollover. Orders from the automotive sector picked up slightly. Overall, however, demand remained weak as many buyers worked off inventories and only ordered enough to complete current projects. As Middle East imports lengthened availability of PP, cuts in producer output had little impact. March should have no major changes on this score, especially since automotive demand apparently is cooling again, and import volumes look likely to increase. The latter trend reflects weaker-than-expected Chinese demand, and Middle East producers are seeking new outlets for their product. In March, PP prices should experience slight increases, in particular because the monthly C3 reference increased EUR 30/t. Even if subdued demand serves as a braking factor, producers will still try to add in their higher monomer cost wherever they can.

PVC: After PVC prices had known only one direction since April 2022, the downward trend ended in February. Prices for PVC and compounds turned upwards, albeit only marginally. Producers attempted to price the pro-rata costs for C2 (up by EUR 85/t) into their offers but met with only limited success. Restrained demand coupled with a more-than-adequate supply kept prices in check. This is because sufficient material is still available to readily fulfil contracts despite the continuing curtailment of European production. Europe’s key export market of Turkey can also only accept limited deliveries at present following the devastating earthquake. Only minor price movements are expected for March, even if upstream product C2 increases in price by EUR 30/t. E-PVC pastes could prove to be the sole exception here, since market participants are expecting the high price level to give way in March, despite demand being pushed up by the building renovation and functional coating sectors. Overall, demand across all PVC materials is still below the normal seasonal level.

Styrenics: February was quite unspectacular and almost silent. After the modest EUR 10/t increase in the styrene reference, no price spikes were expected either way. By consequence, a cost passthrough or rollover was at the centre of polystyrene and EPS price discussions at the beginning of February. As the month progressed, however, weak demand increasingly put pressure on prices, adding a sprinkle of slight discounts. The situation was similar for ABS: while prices were initially in line with the increase in composite costs of EUR 15-20/t, some suppliers softened up to the idea of later on adjusting previous highs downwards. March is going to be much livelier. The tone is already set: as the costs for styrene production are getting out of hand, one producer voiced a desire for increasing PS and ABS prices even before the March styrene contract was published. However, the extent to which this goal can be achieved remains to be seen after the quite significant EUR 113/t drop of the March SM reference. All styrenics are now more likely to see discounts, although producers will probably try to retain some of the monomer cost reduction.

PET: The European PET producers’ hopes for prices stabilising evaporated rapidly at the start of February. After a long delay, the December reference for PX was announced at the start of the month. The pronounced three-digit drop immediately prompted corresponding demands for reductions on the part of customers. At the same time, aggressive import offerings forced their way onto the market. This flash in the pan was short-lived, however, and reductions were kept to a bare minimum over the course of the month, due in part to the earthquake in Turkey, which triggered an abrupt increase in demand for bottles. The bubbling volatility in the international markets drove European converters back to the reliably filled troughs of European suppliers. They frequently opted to be “on the safe side” when it came to meeting demand for the approaching spring season. Prices are set to stabilise in March. Offers for European and imported goods have moved closer together again and all sides are awaiting the start of the season in an optimistic mood. Suppliers are working on the basis of at least a rollover and perhaps a slight firming. The indications from the end markets suggest that they stand a good chance of being correct about this.

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 2023: Market uproar / Aggressive pricing from Asia pressures European producers / Converters in price vice

The situation is dramatic: The European market is very divided, with only PC and PMMA prices relatively neutral and tangible. Everything else is chaos. Both supply and demand are weak almost everywhere, and imported material from Asia – which is being thrown on the market at prices beyond competitive – is putting European prices under ever-increasing pressure.

Converters are responding to the situation by only buying at the bottom price of their contract range, and then making up any shortages with imported material. Hardly any producer succeeded in factoring in the benzene reference price, which rose EUR 108/t in February.

A look at the market also shows that the automotive sector is still weak. Consequently, many converters have written off the first quarter and are placing all their hopes on the second. The fact that planning lead times have shortened drastically (often to only 7 or 10 working days instead of several weeks) is making things even more difficult. Furthermore, due to extremely high engineering thermoplastic prices, purchasing is only possible with interim financing, the costs of which threaten to eat up what is anyways only a small margin. The consequence is that more and more converters have resigned themselves to closing individual production lines and are planning to shut down shop over Easter. Short-time work is now part of everyday life.

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 2023: Price plummet continues / Weak demand, cheap imports apply pressure / Large-scale restocking rare / Downward momentum set to ease in March

Prices for isocyanates and polyols in February 2023 followed the downward path of the previous months. Demand remained weak, especially as only a few processors replenished stocks on a major scale. For MDI in particular, cheap imports were available, so the market continued to lean towards length. But delivery times for polyols also decreased.

In March, demand is likely to increase further. Nevertheless, market participants assume that prices will probably continue to fall due to oversupply. TDI could be an exception, however: because the material has in the meantime become more expensive in other regions of the world, pressure could ease and keep domestic prices stable.

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 2023: Resin prices come under renewed pressure with styrene reduction in March / Cheaper imports pressure glass fibre

Demand for ortho resins in February was again considerably weaker than usual for the time of year. Accordingly, producers’ selling prices came under pressure, with the decline steepest at the upper end of the range. As the styrene reference contract was fixed only slightly higher, it did little to break the downward momentum.

Because European plants were operated below capacity due to high energy costs, their output alone could not meet demand entirely, and imports took up the slack. Inventory refilling and more dynamic ordering by some customer segments, such as aviation, bolstered demand somewhat. For the plastics industry in general, however, a substantial improvement in offtake is not to be expected before the start of the second half of the year. Composites are no exception.

Prices for most glass-fibre-reinforced products covered in this report remain under pressure from Asian competition. In the medium term, this could influence European pricing, though probably not in March. In February, customers for standard strand mats could find reasonably priced material on the spot market.

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 2023: Broad price declines / Weak demand combines with supply growth / Pressure set to ease in March / German recyclers benefit from energy cost cap

The trend endures: standard recyclate prices continued to decline in February 2023. Even though demand picked up slightly as some processors restocked, it remained generally weak. Meanwhile, recycling lines were put back into operation to broaden supply, especially for rPE and rPP, which increased price pressure.

Prices for most recyclates will probably continue to trend downwards in the coming weeks even though the ongoing slide is likely to level off somewhat as processors increase stocks. For some rLDPE and rHIPS grades, largely stable prices are already emerging for March.

Looking at Germany, local recyclers appear to be benefiting from the energy cost cap. Players from neighbouring countries with more widely fluctuating energy costs are increasingly considering it a competitive disadvantage that they are less able to calculate future prices for customers than their German competitors.

The market in Spain has also become a special case. After the country introduced a tax on virgin plastics, recyclate recorded significantly lower discounts in February, or prices were even unchanged. It remains to be seen whether Spain’s special position will solidify in the months to come.

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 2023: Strongest reductions hit polyamides, POM / Slight oversupply despite production cuts / Converters play a waiting game

With demand remaining weak and supply quite good in many cases, the engineering recyclate market has turned into one that suits buyers. This is leading to some purchasers taking pleasure in figuratively slapping their suppliers about the head as payback for what they have done over the last few months.

There were price reductions for all the types covered by this report, but in most cases, they were fairly moderate. The exceptions were rABS, rPOM and rPC, which trended more strongly downwards and above all showed considerable spread. Apart from that, rPA 6.6 grades increasingly battled substitution with less expensive PA 6 materials.

Frequent comments from converters about weak demand carried little weight during price discussions. “That was factored in ages ago,” the recycling camp responded, offering a broad hint about the option of operating production facilities flexibly, ie shutting them down.

Overall, the market was well-supplied – in some cases also supported by imports – despite the low capacity utilisation of recyclers, which threatens to fall below 70%. On the demand side, hardly anyone was willing to make a prediction. They are waiting for a further fall in prices, something that will certainly happen. For rPA 6.6 and rPOM in particular, reductions could grow because, considering the present situation, converters are certainly not satisfied with the prices they have secured.

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!