Price Reports July 2022

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 July 2022: In the month of summer slump, producers flood the market with special offers / Polymers plunge even more than monomers / User markets remain lukewarm

PE: Who would have thought it? July was the month of the summertime blues, but at the same time it proved to be a month of special offers – in many respects. Although the cost of the monomer fell EUR 100/t, the price of most types of polyethylene dropped even more. In fact, the price range was enormous. The continuing weak demand plus a lively supply of imports put even more pressure on prices. Despite maintenance turnarounds and production cutbacks, producers were able to generally fulfil their contracts. A number of “special offers” were also around with much bigger price reductions. On top of that, reports surfaced of “off-spec” material being offered. Nevertheless, ordering activity remains slow because the user markets can simply not get into gear, which means converters can often produce orders from their existing stocks. There are still no major follow-up orders to be seen.

PP: Just when it seems that things can’t get any worse, they do. Again in July, polymer prices sank even more sharply than the fall in monomer prices would lead the market to expect. Put simply, Europe was oversupplied, thanks in part to a glut of imports from the Middle East and Asia. Making the situation even more fragile, summer holidays are pushing demand sharply downward. Producers who wanted to make a sale last month, pushed “special offers” into the market. The polymer price decline last month even topped the monomer’s already-pronounced EUR 120/t backslide. At present, there is no hope for producers in sight. August is also likely to see further output cuts, as demand shows no signs of reviving.

PVC: PVC prices in July continued the downward trend of the previous two months. Prices remained strong, however after repeated records set during the two-year high-price period that ended in April. Renewed reductions in July were triggered by the EUR 100/t decline in the C2 contract. Additional pressure resulted from weak demand due to the holiday period, slowing momentum in the construction sector, and readily availability material from abundant imports. Price reductions on the market here thus frequently went considerably beyond the pro-rata drop in the cost of C2. And even greater price reductions were granted by a number of producers who wanted to boost sales through special discounts for customers who provided purchase guarantees. The basic tendency is for few changes in August. The C2 contract weakened again with a fall of EUR 70/t, imports are still flowing in, and the peak holiday season has arrived in key markets like France and Italy, which is similarly dampening demand. PVC prices are set to continue their downward movement.

Styrenics: Prices for styrenics peaked in July 2022. The increase in the styrene reference at the start of Q3 pushed prices for polystyrene and EPS to new all-time highs despite weakening demand. The exceedingly high price level, growing fears of recession and speculation about an upcoming price correction made processors buy only indispensable volumes and reduce inventories instead, where possible. Demand for ABS was so weak that suppliers were unable to price in the increased composite costs in the second half of the month. In anticipation of the foreseeable price reversal, many of them – especially in distribution – conceded the first discounts already in July to boost sales. As a result, there was a real potpourri of prices, with both price increases and decreases. Overall, however, ABS prices barely missed their previous all-time highs. All of this is likely to change in August – as it will for all styrenics, because the styrene reference has slumped by a whopping EUR 509/t. For PS and EPS, suppliers will try to retain part of this huge cost reduction, especially since they are still sitting on older, more expensively produced stocks. As for ABS, the price slide is cushioned by the smaller cost changes of butadiene (up EUR 40/t) and ACN (down EUR 18/t), but even here, the bottom line is a decline in composite costs of around EUR 300/t, disregarding energy costs. On the demand side, any significant pick-up would be rather unexpected. This is because recession fears will not subside in the short term, and the holiday season with the usual company vacations and production cutbacks is further dampening demand.

PET: The turbulence in the European PET market continued in July 2022. The key feedstock PX was in very short supply, and its price rose drastically, fuelled further by euro weakness. European producers no longer curtailed production voluntarily but were forced to do so by a shortage of raw materials. This was coupled with demands for PET firmly in the three-digit range. When the PX contract was finally fixed with a hike of EUR 305/t after a delay of several weeks, producers were generally happy to accept EUR 100/t in light of import volumes that were still available and the rather hesitant demand for the main season. Below that price, however, nothing was left to be had. Given the uncertain situation, there seems to be no alternative to further price increases from the producers’ point of view. But it is not just the raw material and producer markets that are in turmoil – the end markets are equally fragile against the backdrop of a feared recession. Converters will thus continue to act with great caution. Import warehouses are emptying out, however, and soon there will be no new imports in sight. Further hikes are thus 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 thermoplastics July 2022: Market remains divided, prices present a mixed picture / No massive increases across the board in July / Will August see prices plunge after the fall in benzene contract?

The European market remained divided in July: as earlier, prices were still presenting a mixed picture. Despite the hefty increase in the cost of benzene (up EUR 386/t), there were no major price rises. Now, the enormous slump in the reference price for benzene (down EUR 663/t) can realistically only trigger a downward movement for engineering thermoplastic prices.

Among converters, there were many reports of production stoppages and extended company holidays because the number of incoming orders from customer industries (especially automotive) was – and still is – negligible. Ordering activity was restricted to only what was absolutely necessary. For August, there have up until now not been any large-scale price announcements. All the market players are playing the waiting game, with none of them daring to come out of hiding and put their price expectations on the table. The fall in the raw material prices would make major increases seem unlikely – more the opposite. The improved supply situation with the feedstocks plus the weak demand due to the holiday season will come together to put pressure on prices generally.

Producers are wisely holding back on their calls for higher prices, but that is certainly not the case with glass fibre producers who are trying to make an impression with, in some cases, fanciful ideas for price hikes. How much of this will actually become reality is difficult to estimate in view of the weak demand and favourable glass fibre offers from Turkey.

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 2022: Weak demand across sectors pushes prices lower / Only building industry shows slight recovery / Rising imports to fuel price declines in September

Producers of isocyanates and polyols were unable to push through increases in July but rather had to make concessions, some of them substantial. The concurrent significant increase in benzene prices changed nothing here as their impact was muted by generally low demand. At the same time, more and more cheap import volumes entered the market, which noticeably eased prices.

Auto and refrigeration ordered little, and even the packaging industry lost ground. Demand from CASE applications has also been dwindling. At least the construction sector recovered slightly after its quasi-crash in June.

The low order activity will probably not change much in August. At PIE’s panel discussions, we have been increasingly hearing from processors that factory holidays are being extended and lines are being shut down. The furniture industry in particular is headed further downhill by fears of inflation and recession.

Europe is receiving increasing quantities of imports from Asia at favourable prices. This should put sustained pressure on European quotations, probably well into September. Only afterwards could a stabilisation take hold. The falling spot prices for benzene support this trend.

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 2022: Resin mostly downward / Summer holidays depress demand / Styrene plunge will have ripple effect / Mixed picture for glass fibre

The European ortho resins market weakened, but traces of the earlier styrene price surge lingered. The monomer contract added EUR 155/t in July, with individual buyers seeing increases.

Notations for most products pointed downward on the back of the soft demand. The downward momentum was due in part to the summer holidays, but the cooling of the economy also played a role. Fears of an impending recession led buyers to exercise caution.

Following the collapse of the August styrene reference price by EUR 509 EUR/t, resins notations will most likely continue to sink.

Market movements for glass fibre showed no uniform picture. For chopped strand mats, the supply situation has meanwhile eased, and after the July rollover, declining prices seem possible.

For roving, in contrast, European producers, citing energy constraints, have announced hikes. Imports – for example, from Turkey – are still relatively cheap, though.

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 2022: Market still shunning recession concerns / Prices trend mostly higher / Summer break dampens August price pressures

In view of unabatedly good demand, recyclers were generally able to increase prices and thus pass on the added costs for base materials and energy costs, but not always in full. Suppliers of coloured flakes, however, took the biscuit by enforcing triple-digit premiums far above the cost increases. Meanwhile, those materials for which demand was not quite so strong were exempt from the general upward trend: in particular, this affected rHDPE pipes, where the slowdown in the construction sector is increasingly having an impact, and rPP, the prices of which were limited by an oversupply on the virgin material market. However, even their prices failed to erode and remained at the previous month’s levels.

This is expected to change next month: both rHDPE and rPP are likely to experience price decreases in August. Other secondary materials are also showing some signs of a slowdown, mainly due to the summer holiday season. Modest premiums still are not out of the question for several of them.

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 2022: Free play of market forces / Demand plummets for all types / Zero stimulus from automotive / More severe downtrend likely in August

For recycling grades, neither rising base material prices nor exploding energy costs determined price levels in July: that was solely up to declining demand. In fact, no one can really grasp what is happening. During PIE’s panel discussions, some players were already talking about a catastrophic month of horrors.

Increasingly more converters are trying to make a virtue out of necessity: they are sending their staff on an (extended) forced summer holiday. Or, to put it into economic dimensions, for engineering recyclate products, the much-feared recession has already become reality.

Even now, producers and converters are very worried with thoughts of “What’s next?” So far, incoming orders for August are – to put it mildly – very few and far between, and the automotive sector is ordering virtually nothing. Optimists expect the situation to normalise again from September, but pessimists are working on the assumption that the misery will extend well into Q4. And in terms of numbers, they form the majority among the opinion makers.

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!