Price Reports January 2019
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Articles: January 2019 |
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Standards Thermoplastics |
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Standard Thermoplastics January 2019: PE falls along with feedstock ethylene / PP producers attain margin profits / Quiet PVC market / Styrenics and PET head further down / February should see stabilisation
PE: Price agreements on the European polyethylene market in January were generally oriented to the fall in the ethylene reference. Producers occasionally succeeded in retaining part of the reduction, but in some cases they also had to concede more, especially with grades susceptible to imports. In the important film segments, there were again signs of surplus tendencies. Especially in the first half of the month, this was frequently due to sluggish demand, but this gradually improved during the rest of the month. The ethylene reference for February was fixed unchanged. Many market segments seem to be well balanced so that the most likely outcome for the rest of the month is a rollover. Only occasionally might special conditions bring about slight fluctuations.
PP: The surprisingly lively demand in January allowed producers to improve their margins, but for the most part – for both standard PP and compounds – they pocketed only slightly more than half their cost relief from the decline in the reference contract. For standard PP, the noticeable increase in demand came less from the end markets than from the topping-up effect at the beginning of 2019. Simultaneously, order activity also was spurred by fresh plant outages. In addition, uncertainty over Brexit led to an unusual surge in orders, in particular for UK material. The propylene reference contract rolled over from January to February. Leveraging the tightening trend, producers of standard PP will try to push through hikes and may enjoy moderate success. The continued weakness of automotive demand speaks more for a rollover in this segment.
PVC: Most contracts on the European PVC market were concluded with moderate price reductions compared with the previous month. Customers were aiming for a decrease that reflected the fall in C2 prices, while producers wished to keep a portion for themselves. High-volume purchasers were generally able to achieve a reduction commensurate with the ethylene reference. Precisely at the end of the month, there were reports of deals concluded in this range, while in mid-month, quantities were traded with lesser discounts. For compounds, the substantial price decreases for a number of additives had a more pronounced impact. Production has stabilised again and there were no reports of plant outages. The profile segment was pleasantly surprised by the level of order activity, with supplementary quantities of PVC being ordered in some cases. In view of the neutral cost development and the balanced market, all the signs are pointing to a rollover for February.
Styrenics: The decline in styrenics prices is coming to an end. In line with the slight fall of the SM reference by EUR 15/t, PS and EPS have recorded only slight decreases in January 2019. Discounts on ABS were also significantly lower than in the previous months. After the turn of the year, many processors took advantage of the favourable price level to replenish inventories. In the case of PS, buyers did not always acquire the desired volumes because the order books were already closed in mid-month – any discounts on PS thus tended to be lower than those on EPS and ABS. In February, at least the prices for PS and EPS are likely to trend up again in the slipstream of the styrene reference, which went up by EUR 20/t to EUR 995/t, but ABS prices will be hampered by the EUR 15/t decline of butadiene and probably also by ACN as well. However, the increase is unlikely to be so significant that it would spoil the buying mood, and prices will still be modest. Larger surcharges should be expected once the maintenance season for styrene plants begins in spring.
PET: The trend on Europe's PET market remained unbroken at the start of the year. The downward movement continued on into January 2019, although at a more moderate pace than during the previous month. The cost reference for PX fell again in January, marking the fourth successive month of decline. The outages in European production are scarcely having an impact since sufficient imported material is available. Production has also restarted already following the FM in Rotterdam and is set to return to normal by mid-February. Demand remained at a weak level commensurate with the season. The cost side should stabilise somewhat. The recent turnaround on the crude oil market, together with increasing spot prices and firmer Asian PX markets ought to shore up the European PET market too. Demand is, however, likely to remain low, as is customary for the season.
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Engineering Thermoplastics January 2019: Producers keep prices largely stable / Demand from automotive sector becomes more critical / Price pressure will rise further in February
In January, many areas of the European market for engineering thermoplastics presented an indecisive picture. The slump in demand from the automotive segment continued, slashing the already dampened hopes that this industry – the key driving force for engineering plastics – would spring to life again fairly quickly. Bearing this in mind, the far-reaching stability of prices can be regarded as a success for producers. In fact, renewed increases were reported for PBT, but this was mainly against the background of weaknesses on the Asian market. PMMA has moved into downward mode since autumn 2018 after flying high for the last two years. The commodity-related materials ABS and PP compounds followed the decline of their respective feedstock prices.
Because the situation in the car industry is still showing few signs of an imminent improvement – many players have already postponed their hopes to autumn – the pressure on engineering plastics prices is likely to increase further in February, and could well be reflected in the odd price reduction or two. For the time being, PA 6.6 will continue to be the exception, and also, to a certain extent, PBT.
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!
Polyurethane Feedstocks January 2019: Isocyanates gradually weakening / Bottom may be reached in Q2 / Demand still sluggish / Producers push for hikes
The downward trend in isocyanate notations has not yet been halted, but price momentum in January was slacker. Over the next couple of months, the downswing looks very likely to bottom out. Demand remained weak. No noticeable recovery should be seen before the beginning of the second quarter.
Despite the ongoing deterioration of benzene prices, MDI is likely to see an only slight decline or possibly a rollover in February. Some producers are even thinking about price hikes to improve margins, but these plans seem unlikely to succeed.
TDI is under even more pressure, and – as is the case for MDI – the downtrend could well bottom out. A slight decline may be seen in February, as European prices are still higher than in the Middle East and Asia. New capacities coming on stream in China are now putting considerable pressure on pricing.
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 2019: Resins drift downward again / Sharp declines for glass fibre / Demand mostly back to normal
Step by step, the ortho resins followed key starting material styrene downward. European producers stood their ground in the price rounds and only gradually made concessions – this undoubtedly because the downward momentum for SM clearly slowed in January.
Resins may still have some downward potential in February. The SM reference contract pointed slightly upward for the first time since October 2018, but in sum this did not make much of a dent in the EUR 400/t decline the feedstock has seen since the start of the 2018 fourth quarter. Up to now, suppliers have passed through about three quarters of their price relief. This means that they have scope to concede a bit more this month.
With the exception of assembled roving, which remained largely stable, European prices for almost all glass fibre prices plummeted. Notations for standard grades slipped back sharply. Apparently as a result of the US punitive duties on Chinese goods, suppliers seemed to be seeking an outlet in Europe. Supply of assembled roving is still adequate. However, buyers would do well to order before prices begin firming.
On the whole, the market has not completely recovered from the demand slump seen at the end of 2018. Order volume should return to normal by the end of February, however.
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 2019: Prices remain stable despite falling virgin material prices / Recycled PET trending up / Demand fuelled by policies to increase recyclate usage in products
In January 2019, almost all recyclate prices remained at December’s level, with rPET being the only exception. What at first glance appears to be unspectacular can be interpreted as a sign of remarkable changes on closer inspection – notations have remained stable despite significantly declining virgin material prices. Some market observers see this as proof of an increasing decoupling of recyclate prices from primary material prices.
Driving this development are manifold measures taken to increase the proportion of recycled materials in plastic products, resulting in a surge in demand. Recyclate veterans are very aware of this and already trying to secure secondary feedstock volumes for the future in many instances. This strengthens the recyclers’ position, and the situation should make it easier for them to raise prices in the weeks to come, also in view of increased purchasing costs. Unlike in the past, recyclers' main focus is no longer to hunt out customers for their recycled materials, but to secure a constant supply of recyclable plastics scrap instead.
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 Recyclate January 2019: Rollover for all types / Prices unlikely to move much until Q2 / Surprisingly strong automotive demand / Situation with base material eases
There were no changes with Western European recyclate prices in January although a few initial impulses from the primary market were certainly felt. In many cases, stock replenishment propped up recyclate prices to a greater extent than expected, although polyamides were initially stable. The previous reductions of polycarbonate notations did not continue into January.
Overall, price movements seem unlikely at present even though automotive players were surprisingly very interested in inexpensive secondary materials despite the production stoppages. Most recyclate producers are adopting a relaxed approach to the announced price adjustments in the primary sector and, with demand picking up again, do not see any reason to lower prices.
With the polyamides, price reductions could occur only if the cost of the base material should fall, although this currently does not seem likely. Unreinforced and natural-coloured base material is still difficult to get hold of, while reinforced material is somewhat more readily available.
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!
