Price Reports July 2015

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: July 2015
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics July 2015: PE staggers sideways / PP margins fall / PVC notations mostly stable / Styrenics trip with monomer / PET also loses considerable ground / Downward momentum in August

PE: Many buyers had hoped that July would bring a significant reversal to this year's unparalleled upsurge in European PE notations. In most cases, however, only the highest rises were capped while contract volumes generally rolled over in line with the ethylene reference price. On the spot market, too, notations settled down again in the second half of the month after having initially undergone significant falls. It was mainly the arrival of imports – usually of standard grades – that had resulted in the initial price decline. However, the further the month progressed, the clearer it became that there would be no enormous price reductions before the beginning of August. Over the course of the month, European production progressively returned to normal, but it was not enough to plug all the gaps. Nevertheless, the allocation quotas were frequently raised, and most producers were able to supply the forecast quantities for the regular business. On the open market, on the other hand, there was little material around apart from imports. August will certainly see price reductions. The ethylene reference fell by EUR 70/t, reflecting the fact that previous production difficulties have eased. After having had to tolerate regular price increases for so long, buyers see this as an opportunity to "make hay", and in most cases are calling for price cuts in excess of the monomer reduction. Producers, on the other hand, naturally want to restrict the discounts to a percentage of the cost cuts, but they will probably have to offer at least the monomer reduction to adequately stimulate business. Many traders are predicting stable to rising prices in autumn, and, with speculation in the back of their minds, now want to top up their stocks. To what extent this will be enough to balance out the reluctance to buy of major converters remains to be seen. The extent of the price reductions will be considerably influenced by this.

PP: After the July propylene contract was fixed EUR 20/t lower, producers drew the line for price reductions there. Unfortunately for them, the line did not hold as supply increasingly returned to normal. Traders were quick to react to the pressure, and this led to slightly higher rebates. In the end, the decline on the polymer side offered outstripped the monomer’s fall, if only moderately. The higher-end indexed compounds closed the month with a rollover, as expected. By contrast, producers relentlessly pulled low-lying prices for basic black compounds up to scratch. The margin pressure faced by independent compounders was simply too great to ignore. In August, downward momentum across all products in the C3 chain seems a given. No matter how much producers try to resist, standard PP products are likely to see a price slide at least along the lines of the EUR 80/t plunge in the propylene contract. As the monomer moves down a notch, indexed compounds will also come under pressure. Independent contractors will hold onto as much of their price relief as possible in an effort to gradually shore up sagging margins.

PVC: Trading at the beginning of July was still under the impression of the preceding hectic weeks but as the month progressed, supply improved considerably. In the mostly smooth price rounds, base PVC moved sideways. Compounds lost a little momentum, in part reflecting lower titanium dioxide notations in the semi-annual contract, but also because of sinking plasticiser prices. The market for paste grade remained quiet, but the quarterly contract price rose somewhat, recouping earlier ethylene price rises. In August, notations for the most part will point moderately downward. The relief provided by the proportionate EUR 35/t decline in the ethylene contract should provide the framework for price cuts. On the compounding side, minor deterioration in olefin-based additives should shave prices minimally.

Styrenics: In July, European PS producers had no other option than to pass on their cost relief for styrene monomer. Here and there, they had to throw in a small rebate to appease buyers who after months of steeply rising prices wanted to see a little margin relief of their own. To make a sale, there was often no alternative. EPS producers, at least, were able to hold rebates below their feedstock relief margin. ABS largely remained calm. All attempts by producers to raise prices came to nothing, but buyers generally could not expect rebates, either. Even the increased influx of Asian imports did not play much of a role, as this material was not very attractively priced. The SM contract for August fell again moderately, this time by EUR 25/t. In view of the largely balanced market situation, notations for PS and EPS could come down by the same margin. ABS, too, could see some moderate rebates.

PET: European PET prices lost considerable ground in July, thanks in particular to falling Asian notations that triggered imports and threw the supply and demand balance off course again. With the ensuing market glut, the market’s structural problems became visible again – as had been forecast – despite reported capacity cuts in some segments. In view of consistently sinking prices, plastics converters, who were already sitting on full inventories, were reluctant to order. As producers want to see their input costs sink as much as their selling prices, the PX contract was still being intensively discussed at press time. For most players, the suggested drop of EUR 15/t was by far not enough. Downward pressure on prices will continue in August, whereby the extent of the downturn is not yet apparent. The rollover some producers are propagating will be difficult to achieve, especially as the peak beverage season is over.

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 July 2015: Stability takes over / Increases only for flame-retardant grades / Polyamides surprisingly in adequate supply / Situation expected to remain predominantly calm in August

In July, notations for monthly transactions on the open market for engineering thermoplastics in Europe remained predominantly stable. Only with specialised PBT and POM grades treated with flame retardants and the under-priced dark/black PP compounds were there any rises. In the case of PC, the quarterly and half-yearly contracts were particularly hard hit because, in July, the increases that had accumulated on the open market over the last few months were factored in in one fell swoop. In the distribution business that is covered by PIE, however, things remained calm – contrary to expectations. This also applied to the majority of PE grades.

Despite the FM at a major polyamide supplier, the supply bottlenecks with PA remained surprisingly small. At any rate, competitors were in many cases willing and able to offer comparable materials as alternatives at unchanged conditions. As a result, the much-feared widespread supply problems failed to materialise. PC, on the other hand, was still rather short, especially due to the lack of imports. The EU import duties that have now been in place for many years are, combined with the weak euro, currently having an unfavourable effect for European converters – a similar picture as with PE this spring. Here, too, thought should perhaps be given again to changing the customs arrangements, particularly as one of the market leaders is presently more concerned with making itself “more desirable” before it becomes an independent company.

Because some of the automotive assembly lines, which are so important for the engineering thermoplastics, will be brought to a halt in August, and the peak holiday season comes to southern Europe, it can be assumed that notations for the classic materials will remain largely stable in the coming weeks. The commodity-related PP, on the other hand, will become cheaper, and ABS is under a certain amount of downward pressure.

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 July 2015: MDI higher / TDI gives way slightly / Polyols unchanged / Supply fairly long / Demand still relatively strong / Weak rollover for all materials in August?

Benzene’s EUR 85/t rebound after a dip in June led MDI producers to seek price hikes. Due to relatively long supply, however, their success was limited to EUR 20/t at the lower end and EUR 30/t at the upper end of the PIE range for the pure grade. The polymeric grade, which was extremely long, added EUR 40/t at the upper end of the range.

TDI, by contrast, lost ground. While at the beginning of July, notations remained mostly stable, prices gave way by around EUR 30/t as the month wore on. The gradual erosion gathered strength despite the slight rise in the toluene contract price.

Polyol resisted the repeated attempts by producers to pass on the steady rise in prices for propylene oxide.

From mid-July onward, demand for PU feedstocks began to recede in some market segments. On the whole, however, order activity still remains brisk.

In August, the combination of a long market for MDI and reduced demand during the summer holiday season can be expected to lead to a – probably weak – rollover. The same outlook is likely for TDI. Polyols, by contrast, will certainly come under pressure, due not least to the erosion of propylene prices. At best, producers can expect to achieve a rollover, not least because a new player will probably dump additional material on to the market soon.

.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 July 2015: Resins move sideways / Slight upswing for roving / Rumbling below the surface / SM and C3 pressure resins / Slack imports leverage glass fibre higher

On the surface, the European composites market was quiet in July. Down below, however, the waters were getting choppier. Ortho resins moved in two directions, with hikes on the one side and price declines on the other. Glass fibre also appeared headed for uncertainty, in particular as imports have slackened on the back of the euro’s weakness. For the present, anyway, knock-on effects are not being really felt. For rovings there were first signs of disquiet, but all in all the markets for composites were in balance.

In August, notations for ortho resins feedstocks began to slip, as the styrene contract dipped by EUR 25/t and propylene gave up EUR 80/t. Whether the composites matrix will see increases this month remains to be seen, but from the current vantage point a weak rollover seems to be all that suppliers can hope for.

Not much activity looks likely on the glass fibre reinforcement side in August, although first reports of thinning supply have surfaced. The euro’s weakness is curbing imports from overseas. This means that price increases may be unavoidable in the second half of 2015.

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 July 2015: Prices turn around / Most notations roll over / Slight increases only for rHDPE and rPET flakes / First erosions for rPS and rPET / Downtrend likely in August

The latest rise in recyclate prices has apparently peaked. Solely notations for rHDPE and rPET flakes rose, while all other grades rolled over. In the case of both rPS and rPET, prices even fell slightly. The trend means recyclate prices are largely mirroring developments on the primary market, where supply is slowly but steadily improving. With the overall course set, the cost of secondary material is quite likely to fall in August.

Nevertheless, availability of scrap material remains problematic for rPE and rPP especially. High costs are gnawing at margins, and the grades available are often of a lower quality. One player even told PIE that despite a good order book situation, it would extend the summer holidays to make sure enough feedstock is left in September. The supply situation for rPET is entirely different: The hot summer temperatures have raised beverage consumption, meaning bottle scrap is abundantly 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!

 
Engineering Recyclate July 2015: Most grades trend sideways / Availability of production scrap largely suffices to meet demand / rPC and rPP compounds the sole exceptions / rABS prices could erode in August

The price of most secondary engineering polymers hardly changed in July. Even those grades that had risen significantly in June, such as rPC and rPP compounds, took a breather. This meant that the primary market rises have not yet impacted rPC notations.

Availability of production scrap was mostly adequate. The big exception was PC, scrap volumes of which were quite difficult to come by. Demand remained stable without any significant ups or downs.

Most engineering recyclate prices are trending stable, although notations could start eroding in August, following the downtrend on the virgin material market. By contrast, rPC notations could climb again after July’s respite – it all depends on the size of the primary market increases. The same is true of rPC/ABS blends. On the other hand, ABS recyclate prices could soften. The same might be the case for rPP compounds come the second half of August.

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!