Price Reports February 2024

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 2024: Quotations for most grades fixed higher / PVC types roll over, PET declines / Demand remains largely subdued / February price trend likely to continue in March

PE: Even the fixing of the C2 contract just EUR 5/t higher changed nothing about producers using February to improve their margins again. At the beginning of the month, there were rumours of calls for rises of more than EUR 200/t for some types, and, in view of the lack of alternatives, many converters had to swallow the increases – depending on both the material concerned and the previous price level. This led to considerable frustration because they were unable to pass on increases of this size to their customers. Many producers closed their order books early last month. Furthermore, the reductions in output at European plants in some cases had an effect, as it meant that some producers were unable to supply more than the contracted volumes. Demand has still not returned to normal as individual stock-filling measures were simply too sporadic. What remained was a battle for orders: whereas some converters felt the effect of orders being brought forward and had increased business, for others the capacity utilisation declined again. The increase in the ethylene contract by +30 EUR/t should only provide an initial indication of how high the premiums will be in March. It is to be expected that producers will once again be offering their products with price rises above the increase in the cost of the monomer in order to improve their margins. As far as ordering activity is concerned, however, the prospects remain bleak. The Easter holidays will come at the end of the month, which typically puts a dampening effect on demand. Converters are therefore likely to order only what they absolutely need. 

PP: The C3 increase (up by EUR 15/t) was only relevant for monomer formula contracts. In all other negotiations, significantly higher price hikes were achieved. Depending on the material and the starting price, producers were able to achieve surcharges of up to EUR 200/t for PP homopolymers and copolymers. In the retail sector, meanwhile, processors were still able to get away with high, double-digit increases in some places. Coloured and reinforced materials recorded significantly lower upticks because restocking was rare. Compounders even had to reduce their output in order to not oversupply the market. The high markup demands for homo- and copolymer materials, which were often described as a “rush job” by producers in the PIE panel discussions, frustrate buyers. They tend to endorse a certain margin expansion, but not to an extent that they find difficult to pass on to their own customers. Since 2022, the contracted volumes in Western Europe have tended to decrease, which is why contracts have currently been honoured fully in most cases. However, those who now rely primarily on imports and spot quantities could not assume that they would be able to fully cover their own requirements. Some producers also closed their order books early, which large traders were only partially able to compensate for. Demand continues to exceed supply. Nevertheless, producers will probably keep plant output low in order to maintain control and not jeopardise the current price increases. In some cases, processors are reporting new orders from the warehouses of end users – and at a satisfactory level. However, this is usually seen as an “advance purchase” and not as a fundamental improvement in demand. These quantities could then be lacking again towards the summer. The renewed increase in the propylene contract for March (up by EUR 35/t) is once again likely to be the first sign of further price hikes for base polymers and compounds. As the supply situation remains meagre, new premiums above the cost of the monomer are to be expected. Seasonal demand should pick up somewhat, but will likely be curbed by the Easter break. PIE panellists therefore see demand largely at the previous month’s level.

PVC: February was an unspectacular month. Negotiations proceeded relatively quickly as the ethylene contract had been fixed (up EUR 5/t). Producers only made a few attempts to increase the price level for base material. The negotiating parties agreed on a rollover after the first ten days already and this remained in force until the end of the month. A number of converters, including window profile manufacturers, saw a slight rise in ordering activity. This was by no means at the normal level, however. Other customers were short of orders, with pipe manufacturers, in particular, still suffering from the slump in the construction industry. Call-offs were also further curbed by a slight slowdown in the pharmaceutical packaging sector where demand is normally guaranteed. The picture is set to change in March. With the start of the maintenance season, the market should gradually move into a balanced state. Individual producers may also be tempted to boost their margins through hikes going beyond the pro-rata increase in costs. Tough negotiations are on the cards – especially as demand is not expected to pick up.

Styrenics: The situation is becoming increasingly uncomfortable for styrenics processors, as skyrocketing feedstock costs are currently being made worse by poor sales volumes. In February, for example, processors were confronted with demands for increases from PS and EPS producers who expected to price in the sharp rise in the styrene reference (up EUR 190/t) at the very least. In the case of PS, where some suppliers even wanted to hike quotations by up to EUR 230/t, most deals ultimately oscillated around the level of the monomer cost increase within a certain margin. In the case of EPS, on the other hand, they often remained below this level, with the SM surge rather forming the upper limit for increases. As for ABS, the cost change also served more or less as a guideline for calculating hikes, albeit with a certain variance: the increase in composite costs of around EUR 115/t led to upticks that generally ranged from EUR 100/t to EUR 150/t. And that’s not all: the situation will likely not change significantly in March. Demand is set to remain weak and after the even stronger increase in the styrene reference in March (up EUR 222/t), another round of triple-digit price increases is all but guaranteed. Processors will likely limit their orders to the bare essentials.

PET: As in January, the European PET market went through two distinct phases in February – albeit in precisely the opposite direction. In the first third of the month, prices continued to rise as expected, even if only moderately. A number of customers had gone too far when emptying out their warehouses at the turn of the year and were thus forced to make purchases and bite the bullet. Most, however, were able to relax and ride out the situation. Demand from the end markets remained persistently weak and, at the same time, the PX reference for February was settled early on, with an increase of EUR 15/t, which was clearly below what had been feared. Some buyers also received unsolicited enquiries from suppliers. The result was a rapid fall in PET prices. On average, a moderate drop of EUR 25/t was recorded over the month as a whole. In the current situation, prices can be expected to fall slightly. The feedstock side is unlikely to provide much support and the arrival of further imports has also been announced. If the pre-season picks up to a greater extent than of late, a rollover also seems feasible.

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 2024: Weak demand keeps calls for increases tight / Still no spring revival / Imports improve supply

The benzene contract rose EUR 214/t in February and lifted PC prices at the same time. However, the still weak demand kept the upward trend within reasonable limits. Most European compounding lines are still operating with reduced output, irrespective of the particular type. The much hoped-for spring revival in demand has largely failed to materialise. Driven by the fear that prices could rise further, some converters nevertheless decided to replenish stocks.

The benzene contract for March was also fixed EUR 214/t higher. This, in combination with less competitive imports, is likely to drive prices up significantly. The increases announced by a number of producers also mean that appreciable price rises can be expected. For some types, producers are even looking for triple-digit hikes. This would, however, seem to be barely feasible in view of the fact that many converters have since built up their stock levels. As far as supply is concerned, there are no changes on the horizon, and basic demand also remains significantly below normal. Most importantly, there is no stimulus whatsoever coming from the key automotive sector.

PBT and POM diverged from the trend: once again, the market was too long for compounders to obtain the increases they wanted. Although the tendency towards declining prices slowed down a little, there was certainly no sign of any trend turnaround. Despite the fact that output from European production continued to be cut back, compounders still had considerable stocks at their disposal. In addition, more imports began arriving on the European market.

In view of the weak demand from their customers, converters are still buying only what they need to fill existing orders. Compounders’ hopes of higher prices for their products are unlikely to be fulfilled in March either, and a rollover is the most likely outcome despite the liquid 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!

 Polyurethane feedstocks February 2024: Slight upturn for isocyanate prices / Stronger markups for polyols

The market is turning. For the first time since October 2022, the price trends for isocyanates were slightly firmer. However, MDI suppliers were only able to factor a small proportion of the substantial benzene surcharge into their prices due to weak demand. Producers had actually hoped for more significant price increases for TDI as well.

As a result, providers of both MDI and TDI are expected to continue to try and move prices up a notch next month. Further upward adjustments seem quite possible – although probably not to the extent that producers would like. 

The market for polyols is already one step further. After the first, slight increases at the start of the year, the February prices came in at a much higher level. The slight limitation of availability due to production restrictions and a significantly lower volume of imports – the latter applying to standard material in particular – played into the hands of producers. The providers will not let the opportunity go to waste. Further price increases are in the cards for March, and the upcoming markups could possibly even reach three figures. 

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 2024: Downward trend for resins has ended / Ongoing weak demand expected to keep hikes in check

Hardly any demand was registered in the composites sector at the start of the month. Order activity only picked up noticeably during the last week of February. With an increase of EUR 40/t, resins thus only reacted to the higher feedstock costs to a limited extent. The main feedstock, styrene, had moved up EUR 190/t, while maleic and phthalic anhydride also firmed slightly, or at least registered a slight increase in demand.

For March, resin producers are aiming for EUR 100-150/t, given that the styrene contract has been fixed higher again – this time by EUR 222/t. In view of the only slight rise in demand so far, however, it is unlikely that they will be able to push through these demands in full. Half the amount, i.e. EUR 60-70/t, would seem to be a more realistic scenario. Demand from end user markets will remain at a modest level to begin with. While converters and distributors are generally expecting increasingly dynamic demand, they are also afraid of prices rising too sharply and causing the delicate little plant to dry out.

Producers are demanding an average of 5-15% for all glass fibre reinforcements. This is unlikely to be attainable in full prior to the turn of the quarter. A rise in quotations in the mid-double-digit range would, however, be conceivable before the end of the month. Direct roving is the exception here, since converters still have very high stock levels and will scarcely have to agree to producers’ demands.

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 2024: Sharp rise in virgin material prices fuels recyclate quotations / Upward trend likely to continue

What could be seen only sporadically in January has developed into a trend in February: standard recyclate prices are heading upwards, including all rPE grades.

The driving force behind the surge is the sharp rise in virgin material prices, which fuelled both recyclers’ purchasing costs as well as demand from converters. Yet while stock replenishment effects helped boost ordering, call-offs for almost all recyclates are still far from normal levels – overall demand therefore remains weak.

The only exception is rPET. Well-filled order books and worries on the part of processors that prices could continue to climb have lifted demand to a normal level for the first time in months. And it looks as if this new level could last.

While this remains a faraway dream for suppliers of other standard recyclates, they at least will likely be able to increase quotations further in the weeks to come. The supporting factors are still in place – virgin material is likely to become more expensive, and inventory replenishment effects are not yet ebbing off.

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 2024: Some higher, some at best stable – inconsistent prices trend depending on type / All hopes rest on the spring

The slight oversupply of ABS granules combined with miserable demand ruled out any possibility that the previous month’s prices could be maintained. Recyclate producers had to postpone plans for minor increases until Q2. Because most plants were operating at normal levels, there was also talk of a small reduction of stocks.

There has been no sign of the boost in orders recycling companies had been hoping for, and converters ordered only short-term. Nothing much is likely to change in this respect in the near future. With many types, recyclate producers’ inventories point to further price cuts. Hopes now rest on March and a spring business revival. Converters’ order books, however, do not yet show any indication that such an upswing is imminent.

With demand as weak as it is, recyclers were unable to keep rPC prices stable. Some types were abundantly available, while others were not available at all. Overall, this resulted in quotations varying from a rollover to a fall of EUR 95/t. Hardly anyone anticipates a quick turnaround of the downward trend. Although expected to slow considerably, only a few optimists believe that the downslide is over.

The situation is different with the compounds: here, the upward pressure is likely to continue in March. In talks with PIE panelists at least, it became absolutely clear that compounders want to do everything they possibly can to pass on their increased purchasing costs.

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!