Price Reports January 2021

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 2021
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

 

  Standard thermoplastics January 2021: Month defined by supply bottlenecks and allocations / Feedstocks drive prices / Upward trend likely to continue in February albeit less dramatically

 PE: In January, producers won significant margin improvements on top of the feedstock cost increase for the majority of the polyethylene types covered by this report. Particularly affected were LDPE and LLDPE (C6) film materials and – to a lesser extent – the pipe grades. With the cost of C2 rising by EUR 65/t, producers sought increases of up to EUR 200/t. They justified their demands with the tight availability and the high price level on the other world markets. Converters very often had to accept the increases because of a threat hanging over their heads of their volumes being reduced. It is not surprising that, in these circumstances, there was also some talk of “extortion”. Whereas in the first half of the month, there was still a tendency towards stockpiling, this was later increasingly rejected by producers. The poor supply situation with some materials also contributed to this, and many customers were put on allocation. For February, producers have once again tabled demands for increases of up to EUR 200/t, with ethylene rising by EUR 70/t. With availability often very poor, it is probable that a lot of these increases will go through. The fundamental problem here is a structural one. The currently low refinery activity also means a lower output of olefins. The overall tendency to secure volumes is only likely to meet up with resistance in the case of low-price grades, where converters will take their foot off the accelerator and no longer be willing to pay absolutely any price. Although some imports are expected soon, they will probably not arrive until March 2021.

PP: The upward momentum in polypropylene prices seen in December 2020 continued into January 2021. Aided by market tightness on the back of strong demand, producers were able to ram through hikes well out of proportion to the higher C3 contract. The increases for standard PP also triggered a change in the index for compounds. For February, on the contrary, no relief is in sight. The monthly C3 reference contract added a further EUR 85/t, but PP producers won’t leave it at that. Some suppliers had already formulated hikes ranging up to EUR 250/t before another force majeure in the Czech Republic rocked the market. Compounds will also feel the trickle-down effect of this.

PVC: The upward trend in PVC prices continued unabated in January 2021, rising for the eighth month in succession. They were driven once again by the tight market situation and the still-lively demand. As a result, producers of PVC base materials were able to lift prices yet again above the proportionate C2 cost increase. Compound prices, on the other hand, rose largely in line with the cost increases. The PVC supply situation improved only slightly, and for February 2021 the availability prospects are still dismal. With demand expected to continue to be lively and the cost of C2 higher again (up EUR 70/t in February), further increases are more or less on the cards for February. This means that the price boom will inevitably continue into its ninth month.

Styrenics: The price boom continued unabated in January 2021. The increase in the styrene reference of EUR 108/t fuelled the next instance of the price rally in polystyrene and EPS – in the case of PS, the increases were often slightly higher than the SM cost change, while the premiums for EPS lay slightly lower in most cases. ABS, meanwhile, has already largely decoupled from feedstock prices. A severely limited supply made prices soar, to between EUR 200/t and 300/t. In February, prices are likely to trend further upwards, albeit much less dynamically than recently. The stimulus for this, at least in the case of PS and EPS, is the recent increase in the SM reference: in February, it rose EUR 24/t. For ABS, by contrast, the continuing tight-market situation dominates the situation, and prices are expected to move above the increase in composite costs of around EUR 30/t (SM up EUR 24/t, butadiene down EUR 25/t, ACN up EUR 104/t). However, some producers plan to be modest in their demands so as not to overstep the mark after the massive price increases since November 2020 – “A good shepherd should shear his sheep, not skin them”, as the Roman emperor Tiberius purportedly advised one of his governors.

PET: Significant increases in feedstock costs drove European PET prices higher in January. Fears expressed by market observers were confirmed both with paraxylene, where contract prices rose through December and January by EUR 85/t, and with MEG, which increased by EUR 100/t in January after several months of stability. The global turbulence on the oil and petrochemical markets has also put the PET market under pressure. Since imports from Asia once again failed to appear due to low arbitrage and exploding transport costs, buyers were largely limited to domestic European supplies. Spot prices responded with marked increases and in January were even significantly above the large contract orders tied to the price of PX. Most of the cost increases also went through with the regular business in the medium to small volume segment reported on by PIE. Though demand is still generally trending weak, buyers simply had no choice but to accept the increases. There are first signs from Asia of the situation calming down due to the Chinese New Year – despite travel restrictions imposed by the Chinese government – as well as the imminent new PX capacities and stabilised oil prices. Still, the European market could see further increases in February for precursor products. A largely unchanged supply situation with few imports means these hikes will certainly be passed down the line. Depending on the demand situation, it is also possible that producers will gain a small margin increase.

 

 

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 January 2021: Further price increases for all types / Higher feedstock costs partly to blame / Supply situation worsens again / Few prospects for improvement soon

 The warning signals from the third and fourth quarters of 2020 were not wrong: once again, producers of engineering thermoplastics were hit by a deterioration in the supply of feedstocks and raw materials. For plastics processors, this usually meant being burdened with considerable price increases. The hardest hit were buyers of PC/ABS blends, who, after forking out an extra EUR 95/t in December, had to come up with a further EUR 225/t in January. Also, buyers had to pay EUR 175/t more for PA 6 natural.

Some factors driving prices were countered by problems with the supply of electronic components from Asia, as a consequence of which a number of automotive manufacturers were forced to again cut back production. This has, for example, also had an effect on demand for polycarbonate by easing prices. On the other hand, market players only reported cases of stockpiling with PA 6.6, where supply was particularly tight.

In view of the strong demand, it is looking increasingly likely that converters will have very little scope to negotiate prices in the coming months. With the imbalance expected to continue between supply and demand, they will probably be pleased at every tonne of material they can lay their hands on. Because significant quantities of imports from the Far East are not expected to arrive in the short term, converters will often have little option but to concede to the demands of the producers. At present, the demand for PMMA is being additionally fuelled by the fact that converters have been switching to this product due to supply bottlenecks with transparent PC. The same situation exists with PA 6, where the first buyers have announced their intention to shift from PA 6.6 due to the shortage.

 

 

 

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 January 2021: Fresh price surge for MDI / Peak for TDI in sight / Tight polyols dog converters / Upswing could end in February

After the hefty rise in the fourth quarter of 2020, notations continued pointing upward in the new year. Prices for small and medium-sized pallets soared by EUR 300-400/t, depending on the base level. Buyers with quarterly contracts had to swallow massive increases, some of which were due to higher prices for starting materials.

For weeks, producers have been trying to improve margins. Many producers have customers on allocation. Reports from the Netherlands, among other places, point to production issues. Exports to the US have declined noticeably. At the same time, however, imports from Asia are still not in sight.

The massive price fluctuations are most likely a thing of the past. The situation remains precarious, nevertheless. Even a rollover could be on the cards for February 2021. For the entire first quarter, the market will continue to see restrictions, in particular polyols, which have not completely returned to normal since the first lockdown. Here, tight supply is driving prices higher.

 

 

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 January 2021: Resins prices up sharply / First extreme tightness / Upswing may flatten in February / Glass fibre makes steep strides

 The extreme tightness of styrene precursors ethylene and benzene pushed prices of the ortho resins’ main feedstock strongly upward again. SM gained EUR 108/t, translating into a rise of EUR 305/t over the three-month period from November to January. The palpable tightness, meanwhile also for ortho resins, drove prices farther upward than the producers’ cost rise would indicate. The reason for this development was strong competition with the polyols chain for supply of propylene glycol, which was also becoming increasingly tight. Freight costs also remained high.

As numerous cracker outages limited supply, producers had problems filling all orders, despite the fact that demand was, for the most part, normal. At the same time, high prices discouraged buying.

It looks as if the upward momentum in the SM contract may have been halted, as the rise in February was only EUR 24/t. Resins notations nevertheless will go higher again as producers will be using the tightness to push through hikes. Another factor is that freight costs are levelling off but still remain high.

The hikes for glass fibre-reinforced products at the beginning of the year turned out to be considerably higher than forecast. On average, prices rose more than 3%, in particular due to high freight costs. Supply was sufficient, however.

Further price rises are to be expected for all glass fibre grades, albeit not to the extent seen recently. There seems to be enough product in the market, both from local sources and imports, apart from some regions. Freight rates meanwhile are levelling off, but nevertheless remain high. Without containers and with freight costs high, imports of cheap glass fibre products from Asia are absent. This is unlikely to change in the near future.

 

 

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 January 2021: Prices mostly on the upswing / Tailwind from increasing virgin material prices and growing demand / Recyclers aim for further price increases in February

Standard recyclate prices broadly trended up at the start of the year. Pure rLDPE grades received a boost from increased virgin material notations, while opaque rLDPE grades and PET flakes benefited from heightened demand resulting from the start of new sustainability projects. Prices for rPP and rPS, by contrast, hardly have been reacting to more costly primary materials.

Demand for recyclates is picking up. Many processors are preparing for the spring season, stocking up on finished goods. New sustainability projects provide additional stimuli. As virgin material prices continue to trend upwards, many recyclers are also considering further increases.

 

 

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 January 2021: Considerable hikes across the board / Tight primary markets creating a shortage of base materials / Good demand expected to result in considerable price hikes

More expensive base materials, due to the at times major hikes in primary materials, made the recycling business more difficult. This situation left recyclers with no choice but to considerably increasing their prices for a majority of grades reported on. ABS and both polyamide types, in particular, registered pronounced hikes. Only black PA materials were less drastically affected. Supplies of base material were considerably more difficult, and prices were generally high. In the case of PA 6.6, scarcely any base material was available.

The recycling lines were gradually brought back into operation after the Christmas break. Availability eased here and there, since not all recycling companies emerged from hibernation at the same time. A large number of January orders were already booked in December. More orders were placed with the recyclers toward the middle of the month again, especially in segments where the primary market is tight.

Further price hikes for recycled materials are very likely if demand from the E&E and automotive sectors continues at a good level since the price increases for base material have yet to come to a halt. Only an easing of the situation on the primary market could provide relief. This is not, however, likely until March 2021 at the earliest.

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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!