Price Reports June 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: June 2015
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics June 2015: PE once again rises by triple digits / PP starting to ease / PVC remains under pressure / PS begins to slide / PET already pointing down / Price peak likely to be reached in July

PE: Whereas early in the month notations for all polyethylene grades sold in western Europe rose by triple digits, as June wore on, developments on the spot market pointed to first signs of relaxation in what remains a disastrous supply situation. This cut the peaks off prices for regular orders. June's increases nevertheless far exceeded the cost rise. European producers' nominal margins for all PE grades now exceed EUR 600/t, with the highest coming in at more than EUR 700/t – a historical record.

Although July's ethylene contract rolled over, recent experience has shown that feedstock costs developments no longer play a central role. That is also why producers make little reference to them in their calls for keeping the existing price levels. The market will remain undersupplied in July, despite all signs of slight improvement and the imminent arrival of imports. Stock levels have simply been depleted too much to allow the situation to magically return to normal overnight. All that remains to be done is to wait and see how things pan out in the coming weeks. If it turns out that relaxation is also in the cards for August, prices could start falling in the second half of July.

PP: While in the early part of June it looked as if prices for standard PP would continue rising unabatedly, the trend was capped later in the month as supply lengthened noticeably. One producer in particular seemed to be pulling polymer volumes out of a hat. Imports also were on the rise. In the final tally, the price upswing mostly followed that of the propylene reference contract, with film grade making slightly more ground good. Movements for compounds largely matched the trend for monomer.

For the first time in many months, July’s propylene reference price pointed downward, by EUR 20/t. This was due to a general increase in output – from which PP also stands to benefit. Although there is no indication that prices will be slashed as a result, it is likely that they will come down by the same margin by which they rose in June.
In contrast to polymer prices, notations for compounds are expected to remain relatively firm, which will be a boon to compounders who are not backward-integrated and must buy on the open market. Because of the recent price surge for their input material, they literally have their backs to the wall.

PVC: The ongoing production restrictions continued to drive up the price of S-PVC base material sold in Europe in June. Producers managed to pocket significant increases, which far surpassed the proportionate rise in the monthly ethylene contract and in many cases amounted to more than double. These increases also impacted notations for ready-to-use compounds and blends. On the other hand, it was mostly quiet on the additives front. Weak demand meant E-PVC suppliers were unable to pass on more than the respective ethylene increase in their sales to the important eastern European end markets.
Although availability of S-PVC improved as the month wore on, the market remained tight. All output was quickly sold.

The situation is expected to improve gradually in July. Since costs appear to have stabilised, it is questionable whether producers will manage to push through their renewed calls for hikes.

Styrenics: As availability of styrene improved and with styrenics prices already at a high level, producers found the air increasingly thin for price hikes in June. In the end, only ABS pointed up slightly, and even in this case, producers were only able to pass on some of their higher costs. As for the other grades covered in this report, EPS negotiations resulted in a rollover, while special offers brought down the average PS price level.

The improved supply situation has been the main reason behind buyers’ strengthened position in price talks. In the case of PS and EPS, the market situation had already begun to relax in May, and with imports starting to arrive once again, the tightness for ABS is also starting to ease. In addition, processors limited their June purchases to just the necessary volumes, speculating on price declines in July.

That bet is likely to pay off: After July’s SM reference contract fell by EUR 85/t, styrenics prices will probably also decline across the board. Although producers will likely try to limit the price reductions to the cost decline, the impending holiday season and resulting lower demand might force them into making further concessions. However, future demand will also depend on processors’ price development expectations, that is, whether they will interpret the anticipated declines in July as a signal to buy or as an indication of further reductions in August.

PET: June brought an end to three successive months of rises for European PET notations. As PX costs stagnated, the price of small- and medium-sized PET orders mostly rolled over. Notations for high-priced small volumes actually fell a bit. Bulk orders could once again be had for less than EUR 1,100/t, and some material sold through the trade channel even went for less towards month's end. The decline is partly the result of processors' marked refusal to buy – itself borne out of an expectation of falling prices, which the fall in notations in China appears to be pointing to.

Processors are counting on significant declines in July. With Asian notations falling and the euro holding stable despite the latest troubles surrounding Greece, import activities are once again on the rise. All considered, producers will likely have a hard time recovering their margins. On the contrary, pressure on prices appears to be rising, as the situation of structural oversupply once again comes to characterise the PET market.

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 June 2015: Polycarbonate moves into a higher gear / Other grades still mostly stable / Situation could heat up in the summer / Producers launch extensive hikes at time of strong demand

Western European polycarbonate prices continued to rise in June 2015, and the uptrend even gathered speed. The increase was accompanied by calls for help, as producers appear to be looking for even more drastic rises come H2. Throughout Q2, the price of polycarbonate volumes sold on the open market rose by more than EUR 150/t. By contrast, the upward flight of both ABS (see PIEWeb of 03.07.2015) and PP compounds (see PIEWeb of 03.07.2015) has lost some of its momentum, as expected. Notations for all other engineering thermoplastics rolled over.

Demand remained strong in June, too. With no public holidays, orders from the automotive and E&E segments continued to roll in.

While the price of more commodity-related grades like ABS and PP compounds is trending down or stable in July, the more traditional engineering thermoplastics will likely experience quite a hot summer. PC and PA 6.6 notations will almost certainly increase and the uptrend is threatening to take PA 6 along with it, too. PBT and PMMA prices could rise as well, whereas POM still remains somewhat aloof from the pressure. So far, only one producer has called for hikes, meeting with little market acceptance.

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 June 2015: MDI markedly firmer / TDI still soft amid long supply / Tight ethylene oxide pressures rigid polyols / Upward trend likely to continue into July

Apart from TDI, all polyurethane starting materials made moderate gains in June, as expected. Behind the upward momentum for both MDI grades was the high cost of starting material benzene, while rigid polyols responded to the tightness of ethylene oxide. The latter trend will likely be around for a while before the new capacities emerging in Spain are able to ease the tightness somewhat later in the year.

Both polymeric and pure MDI took steps forward, with the polymeric grade making strides primarily at the upper end of the range. Pure MDI rose across the board, albeit only slightly. A long market kept a lid on TDI, despite the slight upward movement for starting material toluene. A slight decline could be in the offing, as already has been the case in the US.

Flexible polyols for the most part were stuck in a rollover, although buyers of higher-end grades did see some increases. By contrast, rigid polyols prices made scant progress. Supply of ethylene oxide tightened considerably following Ineos’ declaration of force majeure for the feedstock in Europe. It remains unclear, however, how much of an influence this will have on the supply of rigid polyols. At press time, market players were still holding their breath.

In July, prices for all products – aside TDI – are expected to rise. The primary reason will be the strengthening of the construction sector, where ordering has been sluggish of late, along with automotive demand.

.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 June 2015: Resins prices see further small gains / Supply and demand good / Orders may slacken from mid-July / Glass fibre products head unchanged into new quarter

The unbroken upward trend for raw materials prices up to the beginning of July, combined with a respectable level of demand, pushed resins prices still higher. The PIE range added EUR 20/t on average, in line with expectations. While large accounts mostly reported a rollover, buyers of speciality grades and small lots faced steeper increases. Despite rather brisk ordering by the automotive and building industries, the market saw no supply restrictions.

Negotiation rounds for the new quarterly contracts could see prices go higher. This is what producers are targeting, even if not aggressively. As raw materials are now cheaper and demand is likely to begin stuttering as the summer slump beckons at month's end, a rollover with exceptions here and there seems to be the most likely scenario. July’s contract prices for styrene and propylene shed a lot of feathers, although phthalic acid anhydride and maleic acid anhydride continued pointing upward. Nevertheless, the EUR 85/t decline in the styrene price is likely to be the heaviest-weighted factor in the resins price mix.

Among glass fibre products, chopped strand mats saw prices rise slightly, thanks to relatively brisk demand that led to spontaneous ordering, at least for standard grades. In the upcoming semi-annual contract negotiation rounds, all products covered in this report, including standard chopped strand mats and roving, could continue moving upward. At the moment, however, it still remains doubtful that this will be the case and most players expect a rollover.

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 June 2015: Substantial increases for almost all grades / Wave of primary market hikes hits the secondary sector / Upward pressure will persist for the weeks to come

The price increases for primary materials of the past few months have now impacted almost all secondary grades. Not only have significantly higher scrap plastics prices generated strong upward pressure, feedstock has become scarcer, too. In addition, demand picked up as many virgin material buyers switched to recyclate – resulting in widespread substantial increases. As a rule, the higher the degree of quality and the closer to the primary market, the greater was the ensuing price rise. However, the cost of many of the grades located at the lower end of the PIE range also increased, some quite steeply.

Many notations will see additional rises in the coming weeks. Although there are initial signs of a relaxation in the primary market in July, any trend reversal will have only a limited impact on recyclate prices. Notations will remain in the grasp of scarce scrap material and strong demand, none of which is expected to change significantly in the immediate future.

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 June 2015: Substantial rises for rPC and rPP compounds / Despite upward pressure, all other grades mostly roll over / Notations still caught in upwind

While it was mostly quiet on the engineering regrind front, with the price of many grades moving sideways, the situation on the rPC and rPP chains became increasingly turbulent. Some grades even rose by triple digits. The uptrend was the result of a delayed arrival of the previous virgin material hikes, which in turn drove up the cost of the increasingly tight production scrap. For some recyclate grades, the narrow spread to virgin material actually capped the upward momentum.

In the coming weeks, the trends prevailing for each individual grade are expected to remain unchanged, meaning both rPC and rPP compounds prices will likely rise again. Despite an underlying tension, it is anything but certain that notations of the other regrind materials will increase, with an ongoing sideways movement the most likely scenario. Tight availability of production scrap is being balanced out by several processors shutting down for part of the summer holidays. Contrary to the experience of the last few years, the recyclate market could experience a summer slump in 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!