Price Reports January 2017

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: January 2017
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Standard Recyclate

 

 Standard Thermoplastics January 2017: Most producers manage only cost pass-through / Demand still sluggish / Prices still pointing upward / Margin improvement is the watchword for February

PE: European PE producers started the year in optimistic mood. Their calls for price increases also included an improvement in margins, but in the vast majority of cases, producers went unrewarded. Generally speaking, the passing on of the higher costs was the measure of all things. The main reason for their lack of success was the subdued demand, although this was not usually caused by the end markets, but by converters' well-filled stocks. The ethylene reference price for February was up again, this time by EUR 35/t. In February, in combination with converters' decreasing stocks, the lively demand from the end markets should boost business. The market situation is tending tight, which could in turn give producers an opportunity to raise margins.

PP: All efforts by European PP producers to improve their margins bore little fruit. The sluggish demand allowed them to do no more than pass on the increase in the propylene reference contract. Margins are still in the EUR 500-600/t range, but producers are worried about the creeping erosion. Both supply and demand were slow to gather momentum in the first half of the month, but normalised in the second half. Notations for compounds rose in line with the respective matrix material. In February, the producers are determined to not only stop the price erosion, but turn it around. The monthly C3 contract added another EUR 45/t. European plants are being run at capacity and imports have slackened. In parallel, the North American PP market has turned around, and hikes have reached triple-digit dimensions, which could offer attractive export opportunities. Demand can be expected to pick up in February. Could there be a better time to put price increases on the European agenda?

PVC: Europe’s PVC suppliers started 2017 with ambitious resolutions to improve their margins. This they failed to achieve, however. Only the increased cost of ethylene was passed on. Although export opportunities opened up for Turkey and the Far East, demand within Europe remained too weak to permit anything further, despite restocking effects. Rigid PVC compounds were affected not only by matrix costs but also by the increasing titanium dioxide notations. The C2 contract rose once again in February. PVC producers are also still aiming to improve their margins, and with the export windows that continue to be available plus the expected pickup in demand, they might be able to at least partially realise their aims. Compounds and blends will not only be affected by the continuing upwards trend in titanium dioxide – the C4 hike in plasticisers will have a notable impact too.

Styrenics: The steep rise in styrenics prices continued in January. The renewed increase in the SM reference contract, this time by EUR 105/t, propelled PS, EPS and ABS still higher. In direct dealings with customers, many producers tried to pass on almost their entire cost increase, while distributors and traders showed more flexibility. This rally is not yet over. On the contrary, to converters’ dismay, the February SM contract hit a new record high. The EUR 260/t increase will drive ABS to historic levels, due not least to the dramatic EUR 460/t increase in notations for the additive butadiene. PS prices are also likely to pass the previous peak seen in September 2013, while EPS will at least come close to its all-time high. To put it mildly, converters are more than a little unhappy with the current situation.

PET: In January 2017 European PET prices are essentially rising in line with the cost mix. The January reference contract for PX rose by EUR 55 to 60/t, and the contract for MEG by EUR 150/t. Passing on these increases posed no major problems, since Asian imports have ceased to be attractive. The occasional margin improvements achieved by suppliers remained within moderate limits. Regrind experienced a slight upwards trend midway through the month already. In the second half of the month, material sales were considerably above the customary level for January, as warehouses were stocked up to a greater extent to protect against the continuing surge in global oil and aromatics chains. Price hikes in Asia over the preceding weeks meant imports failed to have their usual corrective impact on European supplies now that their price has rendered them unattractive. Little is set to change worldwide in the basic market conditions. Petrochemicals are still showing signs of upheaval. Further rises are expected for PX and MEG, and these will rapidly be picked up by PET prices. Regrind ought also to be increasingly affected by the upwards trend.

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 January 2017: Growing sense of a new beginning / Exploding petrochemical prices in Asia send shock waves around the world / Initial signs of an upward move / Major increases expected in February

At the beginning of the month, the European market for engineering thermoplastics still seemed to be asleep. As usual, the bank holiday season extended to Twelfth Night, after which the workforce caught up on the latest news in the office over a cup of tea or coffee. Then came the sudden wake-up call. Colleagues in Asia had been hard at work and had taken advantage of the calm in the rest of the world to ramp up petrochemical notations. Especially the aromatics catapulted up at a speed seldom witnessed before, making PC and PA 6 producers even more nervous. This was followed by butadiene in a price explosion that can almost be called historic and which understandably turned the prevailing disquiet among PA 6.6 specialists into a red alert. Slowly but surely, buyers of the aromatic derivatives were informed of the high price increases that would come into effect in February. In January, however, such a lot had already happened that prices of most materials did not budge. Only the commodity-related materials, ABS and PP compounds climbed significantly.

In February, however, things will change radically. Especially in the polyamide sector, major price hikes can be expected for the two main types. Both producers and compounders have their backs to the wall as a result of the extreme cost increases, and they have no other choice but to react. Buyers and their customers will have to bear a good deal of the brunt. Substantial increases are also to be expected with PC due to the benzene hype. Meanwhile, ABS will presumably go completely through the roof (styrene is up EUR 260/t, butadiene up EUR 460/t). According to many reports, demand from the end markets was already considered very good in January, and ordering activity does not seem to be declining in February either. There will certainly also be a number of pre-buying initiatives to cover the risk of further increases. For this reason alone, nearly all engineering thermoplastics are tending tight. It simply remains to be seen to what extent the price increases will dampen demand. Only then will we know the exact size of the price increases.

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!

 

 

 

 PET January 2017: Increases in feedstocks absorbed by PET prices / Imports remain unremarkable / Home match for suppliers / Precautionary buying facilitates passing on costs / Upwards trend to continue in February

In January 2017 European PET prices are essentially rising in line with the cost mix. The January reference contract for PX rose by EUR 55 to 60/t, and the contract for MEG by EUR 150/t. Passing on these increases posed no major problems, since Asian imports have ceased to be attractive. The occasional margin improvements achieved by suppliers remained within moderate limits. Bulk purchases followed the same trend as small to medium volumes in the PIE range, maintaining their customary distance. Regrind experienced a slight upwards trend midway through the month already.

In the second half of the month, material sales were considerably above the customary level for January, as warehouses were stocked up to a greater extent to protect against the continuing surge in global oil and aromatics chains. Price hikes in Asia over the preceding weeks meant imports failed to have their usual corrective impact on European supplies now that their price has rendered them unattractive. Little is set to change worldwide in the basic market conditions. Petrochemicals are still showing signs of upheaval. Further rises are expected for PX and MEG, and these will rapidly be picked up by PET prices. Regrind ought also to be increasingly affected by the upwards trend.
 

 

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!

 

 Composites/GRP January 2017: Resins gain considerable ground / Demand curbed by high price levels / Further hikes likely / Glass fibre roving notations see some slackening

Distributors and converters have been hard pressed to keep up with the meteoric rise of resins prices of late. Driven by rising feedstock notations, in particular styrene and its precursor benzene, medium reactive ortho resins prices added another EUR 45/t in January.

Phthalic acid anhydride was another hot spot last month, with availability limited due to the many outages and maintenance turnarounds at European production facilities. Prices for maleic acid anhydride also pointed upward on the back of the higher prices commanded in Asian export markets. Both products have taken triple digit strides recently. While order activity increased over the course of January, due to the soaring prices not as many orders were placed as might have been otherwise. Most converters bought only what they absolutely could not do without. Looking at the numbers producers have been putting forward since December, it seems there could still be room for further increases. Feedstocks – in particular styrene – would certainly support it. SM has been rocketing, among other things due to the tightness created by exports to Asia – for example – where prices are much higher. At the same time, the dry cold has created a logistics problem, as styrene shipping on inland waterways has been hampered by low water levels. The bottom line for February and March is that producers will probably be able to push through increases. Stability simply cannot be expected over the next few weeks. A conservative forecast for February is that notations will add at least EUR 50/t, if not more. The only thing that could brake the upswing is substantially slackening demand, due to the high price levels. Converters will hesitate to begin new production projects in this volatile market atmosphere. In the glass fibre segment, direct roving prices saw slight declines across the entire range in January. Notations for assembled roving also gave way, for the most part at the higher end.

 

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!

 

 Standard Recyclate January 2017: Prices have bottomed out / Higher virgin material prices lead to first increases / Stock build-up has been stopped / New premiums likely in February

Recyclate prices have ended the downswing of recent months. Pure grades in particular have followed the uptrend of virgin materials. Initial seasonal effects have already led to positive developments in some cases

Many recyclers have managed to reduce their stock levels or at least stopped a further build-up. This is beginning to mitigate the oversupply in most grades. Continually rising virgin material prices should also increase the attractiveness of recyclates further and provide opportunities for new premiums..

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!