Price Reports January 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 January 2023: Styrenics move higher / Declines continue for other materials / Delay of PX contract causes turmoil / Turnaround in trend could emerge in February as Chinese demand picks up

PE: In the past few months, PE prices have been falling almost continuously – a trend that also continued into January. Led by the significant fall in the cost of the monomer in C2 contract (down EUR 95/t), PE prices frequently saw reductions in the high, double-digit range. Across the whole PE range, demand actually picked up a little. Some producers succeeded again in factoring in energy costs, but others found themselves in a difficult predicament: because they had cut back their output and were not producing as much as was being ordered, they had no option but to close their order books early. The remaining weeks of Q1 are likely to be interesting. Once the celebrations to mark the Chinese New Year are over, converters in China are likely to ramp up production again. This could thin out the flow of imports that have been coming to Europe from the Middle East.

PP: Polypropylene prices, which have been trending downward since May 2022 (except for a brief pause in November), continued to fall in January 2023. The new decline in the C3 reference contract, which dropped EUR 95/t at the start of the year, set the tone. However, producers often did not pass on the full C3 cost reduction and justified this by pointing to persistently high energy prices. Some suppliers also had to settle for lower discounts because they had already received disproportionately high price reductions in December. Demand remained subdued even after the turn of the year. Stock replenishment effects provided little additional momentum for the market, and the build-up of inventory by processors was lower than usual. Meanwhile, there was slightly more ordering activity from the automotive and food packaging sectors. Price developments for compounds, on the other hand, were inconsistent. While rates for glass fibre-reinforced products also declined, prices for talc-reinforced grades trended upwards for the first time since June 2022 on the sharply higher price of the filler. All other PP prices are also expected to rise in February. The reason for this is not, as one might think, a more pronounced improvement in demand, but merely the increase in the C3 reference (up by EUR 80/t) in the wake of the higher naphtha costs. The foreseeable price hikes will probably have a dampening effect on restocking effects, as many processors are unlikely to buy more than absolutely necessary. Demand remains lukewarm.

PVC: The downward trend in PVC prices continued on into the new year. It was not only the lower C2 quotation for January (down by EUR 95/t) that prompted price reductions. Additional pressure came from weak demand, given the sluggish economic situation and the shorter production month, and from the ready availability of material due to abundant – and still low-priced – imports. The pronounced reductions in the price of base material subsequently exerted pressure on compounds too. The first month of the year was also marked by what at times were tough negotiations to determine the starting price for this year’s contract agreements. After intense discussions, major converters were able to achieve downward adjustments in the triple digits. All players are still acting cautiously on account of the winter recession. Initial momentum is coming from the construction industry, but warehouses are also being slowly replenished in other sectors. It remains to be seen how imports develop in the course of the first quarter. If the flows toward Europe are no longer so strong, prices here could rise again.T

Styrenics: Styrenics prices have bottomed out. In January 2023, prices for polystyrene and EPS increased for the first time in six months in the wake of the increased styrene reference contract. For ABS, the rise is the first since April 2022. Although demand improved compared to the extremely weak December, it was still quite subdued, with inventory restocking effects at the start of the year turning out noticeably lower than expected. Given the abundant availability of materials and the great uncertainty in the markets, many processors apparently did not feel a pronounced urge to build larger inventories. They may well have some time to do so. At least in terms of prices, there should be no major moves in February after the styrene contract for the month increased only EUR 10/t. It remains to be seen whether the weak demand will tempt one or the other supplier into offering a new round of special deals. Whether this would help them in any way, considering the significant margin losses of the past months, is another question entirely.

PET: The uncertainty on the European PET market continued on into the first month of 2023. While the reference for the key feedstock PX was finally fixed for December (up EUR 195/t), the contract for January is still up in the air. This is causing considerable turmoil for indexed contracts. Major customers from the film industry in particular are experiencing an upswing in demand, which has to be met without clarity regarding costs. In the meantime, regular monthly business was benefiting from an unexpected surge in imports from China at the start of the month. Although the offerings were somewhat more expensive than previously, they were still considerably below the price level of European goods. Despite their continuing production curtailments, local producers had to bite the bullet again and reduce prices in order to secure sales. Converters took advantage of this situation to fill their warehouses, given that much scope for further reductions is not expected. Most market participants are expecting a rollover or slight increases for February. The price of the imports on offer is rising further, production curtailments are still in place and a start has been made on pre-season restocking. Increases are thus on the horizon for March.

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 2023: Downward trend gains momentum / All types under pressure due to weak demand and cheap imports / Further reductions expected in February

For engineering plastics, the new year started in the same way as the old one ended: prices fell on a broad front, with all types seeing a reduction of some kind. The factors responsible for the downward trend were also the same – prices being pressured by weak demand in combination with competition from cheap imports. The only difference from December was the fact that, with nearly all grades, price reductions were even larger than at the end of 2022.

Production cutbacks at European plants are being counteracted by the prolific influx of imports. In the case of PMMA, in fact, the constant arrival of material from Asia has led to the return of a largely normal supply situation. Demand, on the other hand, remained weak everywhere. With automotive-type plastics, demand did actually pick up slightly, but overall, the stock-building effects at the start of the new year were well below the hoped-for level.

As yet, there is no real indication of demand springing back to life in February either. Market players are working on the assumption that, as far as demand is concerned, it will be a case of “Waiting for Godot” throughout the first quarter. Nothing is happening. Hopes are now directed much more towards the second quarter.

Against this background, the prices of engineering plastics are expected to continue their downward trend in February – perhaps with the exception of PC and PC/ABS, where the renewed rise in the benzene reference will prop up prices. With the other types as well, price reductions are likely to lose some of their dynamism, because imports (except for PMMA) are declining a little and, above all, are becoming slightly more expensive. This means that, in the upcoming price negotiations, converters will not be able to use this aspect as an argument to the same extent as earlier.

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 2023: Prices under pressure due to subdued demand, cheaper imports / Rising orders to buoy isocyanate prices in February

At the beginning of the year, the cost of isocyanates and polyols in Europe continued to decline. Prices were also under pressure in January due to subdued demand as well as competition from inexpensive imports. As there was generally enough material available, there were – unlike before – no major discrepancies in price developments within the European markets. Negotiations proceeded in a fairly calm manner.

In February, producers are looking to benefit from the increasing stock replenishments by processors and the resulting pick-up in demand. In view of the rising demand, slight price increases are therefore quite possible, at least for MDI and TDI.

For polyols, on the other hand, where the initial replenishment effects were also more hesitant in January, a further slight softening of prices cannot be ruled out.

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 2023: Sharp drops for some resins, glass fibres / Converters bide their time

On average, resin prices surrendered substantial ground again in January on weak demand and uneven capacity utilisation. The declines were not attributable to fundamental market data, for example the cost of starting materials, as they remained stable for the most part. Instead, the cause was a catch-up effect as converters increased order activity after the slow month of December, which depressed prices belatedly.

Quotations reported by a slight majority of PIE panel members indicate that prices rolled over last month. This was especially due to producers already pushing through minor increases at the end of December to account for the firmer styrene contract.

The up and down movement of key feedstock styrene, which added EUR 10/t in February, will again drive resin prices slightly higher. The most important factor lending momentum to resin prices, however, will be the EUR 115/t increase in the styrene contract of January. Against this backdrop, reductions announced toward the end of last year probably will not materialise, or at least will not be as substantial as hoped.

Movements in glass fibre product prices were uneven. A common denominator were hefty rebates that in some cases even reached 5%. This was the result of falling freight costs and not some price skirmish between producers and Asian imports.

Shipping prices seem to have bottomed out. Glass fibre prices, for European as well as Asian materials, are likely to remain unchanged as long as demand fails to rebound more substantially.

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 2023: Prices still trending down / Restocking effects smaller than expected / Recyclers are hoping for better demand in February / High price pressure continues for rPET

As is customary for January, European processors restocked after the turn of the year. However, resulting inventory-replenishment effects were noticeably smaller this time than in the previous years, which means demand for almost all grades has still not taken off. The shortness of the production month put additional pressure on demand, as many processors resumed operations only in the second week of January.

The European recyclers are hoping for demand to pick up in February.

At least for rLDPE and most rHDPE grades, this is likely to happen, providing some buoyancy to recyclate prices. Meanwhile, the weak order situation for rHDPE pipe and rPP, and the ongoing competition from low-priced virgin-product offers, will ensure further pressure. The most significant discounts are again expected for rPET, where production expansions are likely to increase the existing oversupply.

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 2023: Availability, demand largely balanced / Further reductions / Asian imports improve recyclate availability / Downward price trend to continue in February

The expected weak demand in January proved to be even more subdued than is traditionally the case. On top of this, there was an increase in cheap recyclate imports – for example, polycarbonate from South Korea and Japan – which more than balanced out the tendency to bottlenecks with European material. Recyclers were forced in some cases to make significant price cuts to sell any material at all, occasionally also as a catch-up effect from December.

The availability of base material was somewhere between adequate and satisfactory, even though regrind was often only to be had at much higher prices.

There were frequent reports of orders that had already been postponed from November and December being delayed even further into the future. Nevertheless, demand improved slightly because ordering activity from car production – also occasionally from the E&E sector – showed some signs of picking up again. Although there are indeed indications of a trend turnaround, it not yet plain for all to see. Converters from the other industry sectors are holding back to an even greater extent.

For the vast majority of recyclate types, there will be further price reductions in February. Overall, however, the slight recovery in demand should slow the downward trend a little. Only polypropylene recyclate materials could see a rollover.

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!