Price Reports July 2021
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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! |
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Articles: July 2021 |
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Standards Thermoplastics |
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Standard thermoplastics July 2021: Prices ease broadly as holidays begin / ABS and PVC situations remains tense / Apprehensive outlook: What’s to come as the summer progresses?
PE: Many market observers got their own price forecasts wrong at the beginning of the month. Their expectation that the high triple-digit price reductions on the spot market would also be reflected in the contract prices did not materialise. Instead, the relationship between demand, supply and cost became even more differentiated. Imports improved the availability of certain grades, resulting in higher price reductions – with LDPE and LLDPE (C4), for example. Where imports failed to appear (for example with PE pipe 80 and 100), the market had to be content with a rollover. With C6 and C8 film grades, decreases were only achieved at the upper end of the price scale and even then they were small. At the lower end, it was just about enough for a rollover. August will be dominated by the holiday season, so the overall demand could decline. Prices are likely to remain fairly balanced or fall slightly. If the defective naphtha line drives even more companies to declare force majeure in Europe, it will become necessary to amend the forecast significantly.
PP: After months of increases, prices for most PP grades began tumbling from their lofty heights in July 2021. Only PP copo film remained stable. Prices for the other grades came down, despite the EUR 40/t rise in the C3 contract. For the most part, peaks levelled off. The reduction for the well-supplied homopolymer was greater than for copolymer, where supply was seen to improve only incrementally. Prices for injection moulding grades, which were affected by the summer plant holidays at automakers, gave way more substantially than for film grades. Compounds showed a reverse trend. For contracts indexed to the monomer, the rise in the C3 contract triggered a price rise for polymer. In contrast, buyers with contracts tied to standard PP saw some price relief. In August, the supply side will undoubtedly try to factor the higher C3 price of EUR 58/t into selling prices for the polymer. In view of the weak summer holiday related demand across all product groups, however, they are unlikely to achieve more than minimal improvements. For compounds, the trend seen in July is likely to continue into August. Contracts indexed to C3 will see prices move a notch higher, while contracts tied to standard PP will likely see further price relief.
PVC: Where is it supposed to end? PVC prices continued spiralling upward in July 2021, for the 14th month running. Hopes for an improved supply situation were dashed, and the extreme shortage of material, coupled with a high level of demand, thus remains the dominant topic. In the time since the price rally began in June 2020, the average price of S-PVC base material reported on by PIE has risen by 92%. One record after another is being broken. August is not set to bring any relief either. Demand remains high, since many converters are not cutting back their production during the holiday period. Material bottlenecks are pushing prices even higher, also for compounds. The shortage of additives is also hampering production – since the chaotic shipping logistics situation is causing massive delays in deliveries on all sides.
Styrenics: The sharp decline of the styrene reference in July (down EUR 208/t) extended the downward trend in styrenics prices. However, the extent of the discounts varied considerably. Whereas the markdowns on PS were fairly in line with the SM reduction, and in some cases even exceeding it in distribution, EPS and ABS suppliers contented themselves with relatively small discounts. This price development reflects the general supply situation quite accurately: PS supply has mostly recovered by now while EPS and ABS are still suffering from serious bottlenecks. In August, the short-term price correction, which has lasted only two months after a bull market of several months, will probably come to an end as the styrene reference has turned upwards again by EUR 36/t. In its slipstream, PS again could turn into a slight upward trend provided the market does not call for a further correction of the still very high price level. The cards are stacked against buyers in the undersupplied EPS and ABS markets. However, considering the massive bottlenecks, suppliers will hardly be content with simply passing on costs. And more bad news has emerged for ABS supply: Ineos Styrolution (Frankfurt / Germany; www.ineos-styrolution.com) has declared force majeure for deliveries of its “Terluran” standard ABS from its Belgian site in Antwerp.
PET: Only very slight corrections emerged for what were very high price levels on European PET markets in July 2021. Rising oil prices drove up the cost side, establishing a basis that prevented any further slide in pricing. At the same time, suppliers were unable to push through any increases as demand remained quite subdued. Optimistic hopes for a sharp rise in demand were undermined by rainy weather coupled with the emerging fourth wave of the pandemic. And because the import situation also remained bleak, customers were only able to achieve slight reductions at very high price levels. PET producers would like to pass on expected increases for PX and those also potentially for MEG to their customers in August and will most likely be able to push through some of the increase. Demand development will be the decisive factor for determining the extent of the hikes, and this is expected to be rather subdued by current estimates.
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 July 2021: Holiday season and weaker demand from car sector ease tensions / Hot autumn looms / Short-glass fibres remain problem child
Stress and pressure characterised Q2. Currently, there is a sense on the market that the tension is easing: as indicated in previous months, assembly lines at carmakers have been slowed because of the chip shortage. This has reduced demand from car producers to a certain extent. In contrast, there were few signs of fatigue in the E+E and construction industries as evidenced in the number of order call-offs. However, panic buying is becoming less common.
At least in Europe, the issue with the supply of bisphenol A (BPA) has improved slightly. The number one problem child is and will remain short-glass fibres: the market has dried up completely, and customers are crying out for the product everywhere. Apart from that, more trouble threatens, this time with PA 6.6 natural, where the cost of butadiene has risen significantly once again. This will inevitably also be reflected in a price hike for the base polymer 6.6.
Overall, producers are keeping their cards close to their chests in the holiday season. In September, however, the situation is likely to look completely different: when forecasts from the car industry are announced, a spirited cranking-up of the price spiral is likely to resume.
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 July 2021: Renewed scarcity due to force majeure / Situation still characterised by price declines / Comfort segment continues to languish
The euphoria regarding the improved availability in the PU sector that was still spreading during June was abruptly dampened at the beginning of the third quarter. One major global MDI producer declared force majeure, first for its European and then for its US production, while a major Asian producer carried out its regular maintenance shutdown. The supply situation therefore remains tense because almost 30% of the global production is missing.
Despite this, price fluctuations like those seen in the past months were no longer widespread. As a rule, the situation was characterised by price declines. The needs of the construction industry continue to trigger demand, even if the pace has slowed somewhat. The comfort sector remains a problem as it remains stuck in place. The adhesives industry is also suffering from the insufficient polyol supply. The holiday season is also doing its bit to prevent demand from increasing beyond normal levels.
The Europe-wide holiday season, which is noticeably reducing capacities (human resources) in the downstream markets, has a slowing effect across all types. This is also reflected in lower raw material purchases. Subdued purchasing during the holiday season should also cool pricing somewhat.
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 July 2021: End of months-long upward trend for ortho resins / Extremely tight supply drives up prices for glass fibre / More hikes in sight
In July 2021, the styrene reference price finally began to play a role in ortho resins pricing. For the first time in more than a year, prices lost ground after earlier soaring from one peak to the next. How the situation develops in August remains to be seen. Some players with whom PIE spoke said they see scope for further downward movement, while others expected slight increases in view of the minor upward correction in the SM reference and the higher cost of maleic acid anhydride. What both sides agree on is that the market is unlikely to see any significant price movement in either direction over the next month.
Prices for glass fibre and roving were still climbing last month. Imports remained scarce, and the extremely tight supply was already leading converters to cut production. No relief is in sight.
Looking ahead, it seems as if prices will continue treading the same upward path they have been on for months.
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 July 2021: Upward momentum cools significantly / Several grades peak / Only rPET rises again / August prices likely to increase slightly or remain stable
The months-long upward trend of recyclate prices slowed down considerably in July. Many prices rose only slightly and several even held steady. One exception was, however, rPET as prices once again soared on strong demand and short supply.
Generally speaking, demand for recyclate is still being encouraged by sustainability projects of many brand operators. Apart from that, ordering activity often developed very differently. For example, rPP is still profiting from supply bottlenecks for the primary material, whereas other types such as rHDPE for injection moulding was increasingly facing competition from comparatively cheap offers of virgin material.
The supply situation with most recyclate products has since improved. Significant limitations to availability are probably only to be expected with rPP and rPET in August. There is nevertheless still a big question mark hanging over rPE, where the situation has, in fact, started to ease. It now remains to be seen how the reversal of Turkey’s ban on scrap PE imports will affect the supply of base material in the coming weeks and months.
Supply and demand will also continue to be the key price factors in August. Where material is short, further increases – even if fairly small – are again possible, but with most recyclate products, the peak has probably been reached and stable prices are most likely.
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 July 2021: Unabated high demand drives prices / Aggregates also in short supply / Processors' summer break cancelled this year / Further premiums likely
Recyclers on the Western European market took advantage of the continued high demand for secondary materials in all reported recyclate grades to further increase prices in line with higher production scrap costs. In most cases, they also factored in the significant increase in aggregate costs, for example for glass fibres and flame retardants. Overall, the pressure to switch from primary to secondary materials has now significantly expanded the scope of applications and sales for recyclate producers.
The expected improvement in primary material output mostly failed to materialise. In some cases, a lack of imports put additional pressure on the already-scarce availability of production scrap. The situation will not improve in the foreseeable future, especially with regard to aggregates and additives. Nevertheless, it can be observed that the progressive replacement of primary materials has pushed recyclate sales about 20% above the respective figures in 2019. If the situation remains like this, the entire sector will have to adapt to this new development.
In August, the continued tight availability of both production scrap and aggregates is likely to be a determining factor for prices. Since processors will not take a production break during this holiday season, demand is expected to remain strong. The E&E and consumer goods sectors, and most recently also the automotive industry, are placing orders on an unprecedented scale. Further premiums are therefore to be expected. It seems that many processors and end-users are only now beginning to realise that prices for recyclates could generally eclipse wholesale prices for primary compounds in the 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!
