Price Reports July 2016

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 2016

Standards Thermoplastics Engineering Thermoplastics Polyurethane Feedstocks GRP/Composites

 

  Standard Thermoplastics July 2016: Polyethylene notations cave in / PP declines moderately / PVC under pressure / Styrenics notations in free fall / PET continues to erode / Stabilisation expected for August.

PE: "All good things come to an end," European PE producers were reminded in July after having enjoyed 15 months of high-flying margins. For the first time since April 2015, significant price cuts drove down the nominal margins over ethylene to a level of about EUR 500/t and less. For many long-term customers, the shift in the direction of the once widespread levels of EUR 300-400/t was a welcome sight – after all, that alone suffices to allow producers to make a good living. The price decline was set against the backdrop of the undeniable tendency towards a surplus across all market segments, which the small rise in the ethylene contract was unable to offset. The market was awash with material from European production lines, output of which has stabilised, and imported material, which had been attracted by the previous high price level. Even grades not usually imported – including bimodal types – appeared in large volumes. For many converters, who underwent a long period of frustration, this has made life significantly easier. Some among them even started building up stocks ahead of producers’ widely expected tit-for-tat response, while others did so with a view to their annual balance. The situation is expected to stabilise in August. Following the EUR 20/t decline in the monthly ethylene, producers will seek a rollover. At the same time, cracker maintenance downtimes will reduce polymer availability. On the other hand, demand tends to hit a low point in the central European summer holiday month of August. All considered, these differing trends could balance each other out.

PP: At the beginning of July, some European PP producers still hoped to be able to pass on the EUR 17.50 rise in the propylene reference contract. Reports of tighter supply from various production facilities were supposed to help their case, but as the month progressed it became clear that fears of a bottleneck proved unfounded. Most supply gaps were filled by imports streaming in from the Middle East and Asia. At the same time, numerous potential buyers held back orders in expectation of falling prices. Thanks to the summer lull in much of Europe, this was no hard task. Producers’ margins fell back to the level that in May 2015 was defined as the “new normal.” Business in the compounding segment was relatively quiet except for the ongoing discussion about indexing prices to standard PP. It will be interesting to see to what extent the new structure will result in the price decline being passed on and what effect it will have on the market as a whole. Apart from this, all PP products are likely to see stability in August. There is no impulse from C3, imports are slackening, and European production appears to be moving into holiday mode. Demand will also be quiet throughout Europe, as French and Italian converters will be in their annual summer hiatus.

PVC: True to its recent efforts, the European PVC market leader kept up its battle to safeguard margins. The struggles were of no avail, as in the end PVC base material suppliers mostly settled on a rollover, which took a small bite out of their margins. After years of comparative calm, the steady and steep rise in titanium dioxide notations has meanwhile continued to drive up the price of both rigid PVC dry blends and compounds. Notations for the white pigment have almost doubled since the autumn of last year, impacting the price of blends, too. Demand proved disappointing to many producers, who had hoped for a certain catch-up effect from the pipe segment. The current order situation is not expected to change in the coming weeks, not least since demand in many consumer markets – France and Italy among them – will decline over the course of the summer holidays. With the monthly ethylene contract having been settled slightly lower, notations will probably erode. The only exception to the downtrend is PVC (U) blends, which remain under upward pressure as a result of the rise in TiO₂.

Styrenics: Styrenics prices gave way across the board in July, following the steep EUR 125/t drop in the monthly styrene contract. In the end, transactions spanned a rather large price range because negotiations tended to be based on the already very heterogeneous price levels of the previous month. Those who had managed to obtain reductions in June only succeeded at pocketing a small share in July, while buyers who had paid the entire cost increase in June were generally granted larger discounts. In the case of PS and EPS especially, some of the declines actually exceeded the cost reduction, not least since the widespread reluctance to buy in June meant there was a lot of material up for grabs. With regard to ABS, by contrast, some suppliers were able to pocket a share of the EUR 68/t cost decline. Following the rollover in August’s monthly SM price, most players expect notations to hold largely stable. With demand likely to be rather weak in the main central European holiday month, PS and EPS prices especially could slip slightly.

PET: As in previous months, the European PET market was highly heterogeneous in July. Numerous buyers were able to obtain material at lower prices, while others only achieved a rollover. Most of the latter had, however, been able to gain rebates earlier, usually towards the end of June. However, the price of bulk orders for commodities dropped slightly, driven down by the unusually high number of import volumes this year. The difference to notations for smaller lots can reach up to EUR 200/t – not exactly a healthy or sustainable situation. European producers are only fanning the flames by lowering output rates and focusing on speciality grades. In August, the overall picture will probably tend towards price erosions. With few impulses on either the supply or demand side, most players are keeping track of cost developments to provide further guidance.

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 2016: Prices mostly stable / POM slumps / Latent rumbling on polyamide and PMMA cost front / Holiday month of August likely to remain calm / More intensive discussions expected in autumn.

It was mostly smooth sailing for classic engineering thermoplastics prices in Europe in July. The exception were notations for POM natural, which fell slightly as a result of at times bitter struggles with imports of basic material. There was almost no movement for the other grades covered in this report. Even the commodity-related PP compounds held largely stable. ABS, on the other hand, slipped significantly following the decline in the styrene reference price.

The superficial calm on the engineering thermoplastic market, however, belies the underlying movement in the respective cost chains. PC notations, for example, only held stable because producers stepped up their export activities. The market situation itself is comparatively weak. While demand for polyamides is not exactly over-boarding either, in this case the feedstock chain holds the potential for upheaval. Caprolactam is pushing PA 6 base polymer upwards, and, in the case of PA 6.6, availability of both HMDA and ADN has tightened in both Europe and the US. Restrictions along the feedstock chain were also palpable in the case of PMMA, while discussions about the cost of flame retardants are holding PBT especially in their grasp.

There is no denying that a number of factors point towards an upward price trend for many engineering thermoplastic grades in the coming weeks and months. However, with demand expected to remain subdued as a result of the holidays, the market will probably remain mostly calm in August. In addition, oil is pointing down, which in and of itself could suffice to rob producers’ of any reason to hike prices. As a result of their proximity to commodity products, PP compounds and ABS remain under 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 2016: TDI soars to new heights / Peak not yet reached / Unexpected hikes for MDI / Polyols firm slightly / Strong demand for a summer month. Led by TDI, prices for polyurethane feedstocks moved strongly upward in July. Although on the whole, order activity seemed to be slackening, the trend is not as pronounced as usual at this time of year. Both TDI and polymeric MDI trended tight, with supply slightly restricted.

TDI prices have risen to astronomical heights. The monthly notation for the isocyanate rose by triple digits once again, following an increase of nearly EUR 200/t in June. Converters desperately trying to source material inadvertently drove prices even higher, not to mention the high volatility. The situation has also started to impact demand for flexible polyols.

The market will likely remain in turmoil for some time before it gradually returns to normal. While the turnarounds at TDI plants and the delayed restarts after maintenance are the principal reasons for the current situation, converters’ amok-like run on material has done little to help them. If they keep calm, supply will probably suffice to meet demand. Slacker demand during the summer holidays should help reassure the market. At which point the peak will have been reached and the market will return to normal is not yet clear, even if there is no doubt that it will come.

MDI prices also trended higher in July. Surcharges for smaller accounts averaged EUR 40-60/t, even if only a slight increase had been expected at the beginning of the month. MDI producers apparently wanted to recoup some of the costs incurred at the beginning of the year, which they had been unable to pass on in full. While converters were unhappy with this tactic, the general tightness played into producers’ hands.

The slight rises in polyols prices mirrored the increases for base feedstocks C2 and C3. However, the market did not allow any room for more substantial hikes. 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 2016: Resins move down with SM / Lower-end glass fibre grades also slip / Latent pressure on mats / Resin costs appear to be stabilising
After pointing upward for three consecutive months and unable to buck the EUR 125/t downswing in the styrene contract, ortho resins prices gave way slightly in July, as had been expected. However, the stability of the other important starting materials, phthalic acid and maleic acid anhydride, along with propylene, balanced the equation somewhat, and limited the price decline.

In the glass fibre segment, the first repercussions from the global capacity expansion began to be seen. High-end grades remained stable, but the standard direct roving market, where competition is strong, saw some degree of price deterioration that both players and industry observers suspect could affect the market as a whole.

After the plunge in the styrene contract, the resins market appears to have calmed. The SM reference contract for August rolled over, and the other material components also remained stable. All signs point to continued sideways movement, with the possibility of a few small corrections here and there.
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!