Price Reports June 2017
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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! |
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Articles: June 2017 |
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Standards Thermoplastics |
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Standard Thermoplastics June 2017: Markdowns for polyolefins exceed cost reductions / PVC compounds go up / PS follows the rise for monomer / PET tends more tightly / July brings more discounts
PE: Many European PE producers had to grant price reductions in June that were well in excess of the fall in the ethylene reference price. Only occasionally were they able to limit the cuts to the decline in costs. As a result, producers' margins dropped for the second month in succession. The low-density film grades were particularly weak, and in many cases had to pay the price for the product surplus. Although business was stimulated by the lower prices, many buyers continued to hold back as they sensed the prospect of further reductions in July.
In that respect, they are not entirely wrong. The ethylene reference for July, which is the major yardstick for PE pricing, went down again – this time by even more than in the previous month, namely by EUR 50/t. Reductions of the same size are thus more or less on the cards. Producers are hoping for a trend turnaround before the end of the month, because, once sold, the material will cease to put any pressure on stocks, and at the same time, the recent lively influx of imports seems to be on the decline. Presumably, speculative buyers will quickly stock up with material as soon as they see prices close to bottoming out.
PP:June was a disappointing month for PP producers. All attempts to withhold some of the EUR 40/t advantage resulting from the lower propylene fixing failed. But worse than that, at the end of the month the rebates granted exceeded the fall in the reference contract price. Averaged over May and June, PP producers forfeited EUR 40/t in margins, due to an influx of imports that undermined the market price. This gave buyers a reason to wait until notations dropped.
Converters’ hopes of further price reductions should be fulfilled in July, as the C3 contract was fixed lower. PP will surely follow the downward trend. Demand dynamics will be enhanced by buyers who leverage falling prices for speculative purchases. The danger is that a minor run on material could lead notations to turn around and point upward over the course of the month.
PVC:While prices for the base material fell, reflecting the lower cost of C2 in June 2017, additives continued to drive up notations for ready-to-use materials. The tight supply situation for titanium dioxide and plasticisers prevented many processors from running production at full capacity. This has led to lost sales.
The supply situation for additives is not set to improve significantly in July either. A small measure of relief should, however, be provided by the holiday season and the associated fall in demand.
PS:Styrenic prices moved in different directions in June. PS and EPS tended to follow the increase in the cost of styrene, but generally not in full. ABS on the other hand experienced further price cuts because the rise in the cost of styrene did not have such a pronounced effect on the composite costs as the marked fall in the prices of butadiene (EUR 300/t) and ACN (EUR 50/t).
Demand for styrenics in June continued to be very lively. The building season combined with supply bottlenecks for PU insulation materials resulted in lively ordering of EPS, while European ABS producers benefited from the continuing low level of imports from Asia.
In July, styrenic prices are again expected to move in different directions. With the renewed rise in the cost of styrene (EUR 27.5/t), rates for PS and EPS will rise again, while, in the case of ABS, the latest crash in the price of butadiene (EUR 400/t) will play the key role and pull prices further down.
PET:The bright sunny weather on the continent, with some very hot temperatures in southern Europe, naturally drove up demand for PET bottle material in June 2017. Asian suppliers cut back their exports to Europe at the same time, which meant that the suppliers based here succeeded in keeping most of their cost savings (PX down EUR 45/t, MEG down EUR 10/t) for themselves. Slight reductions were only evident in isolated cases where prices were high, and this scarcely had any impact. Towards the middle of the month, recyclate showed clear firming tendencies. All in all, however, momentum within the chain as a whole tailed off towards the end of the month.
If the good weather continues, prices in July will most likely remain firm or increase somewhat. This is not guaranteed, however, since the impact of intermediate product costs and import activities from Asia still remains to be seen. Depending on how these influencing factors develop, prices could rise somewhat or even fall slightly.
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 2017: June rollover repeats itself in July / Exception is PMMA that goes through the roof due to dramatic shortage of MMA / Subdued demand in the holiday period puts pressure on prices
With the exception of polycarbonate, which saw the first minor reductions for less specified grades, engineering thermoplastics stayed in rollover mode in June. Not even the small decline in the benzene notation was able to exert an effect. In contrast, the situation with PMMA remained dramatic, as prices kept stable only because of the ongoing quarterly contracts despite the drastic shortage of MMA. Demand was solid, especially from automotive and E&E, although on the whole business was a little quieter than in the previous month. Delivery times were considerably lengthened in some cases.
In July, the start of the new quarter is likely to see a split in producers' policy for certain types: high-grade materials will in some cases become significantly more expensive, while standard types will become noticeably cheaper. The net result will probably be a rollover again. Looking ahead at the upcoming holiday season, things should calm down a little, with ordering from the automotive segment in particular gradually slowing down.
With PA 6, large quantities of cheap feedstocks from Asia have been sighted on the market. In the light of declining raw material costs, converters are also pushing for price cuts on compounds. Sister polymer PA 6.6 could be hit by a certain bottleneck in the availability of the cyclohexane component, although the exact repercussions are not yet obvious.
The jump in the price of PMMA originally expected at the beginning of Q2 was postponed to the beginning of the third quarter. There are reports of calls for massive increases of 20% and more, although there is not much room for debate about them being implemented. Everyone is hoping for on-spec material from the new plant in Saudi Arabia, but, as things stand, such products are unlikely to reach Europe before October.
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!
Polyethylene June 2017: Price cuts mostly much bigger than the fall in costs / Film grades under particularly acute pressure because of oversupply / More reductions in July / Will there be a trend turnaround before the end of the month?
Many European PE producers had to grant price reductions in June that were well in excess of the fall in the ethylene reference price. Only occasionally were they able to limit the cuts to the decline in costs. As a result, producers' margins dropped for the second month in succession. The low-density film grades were particularly weak, and in many cases had to pay the price for the product surplus. Although business was stimulated by the lower prices, many buyers continued to hold back as they sensed the prospect of further reductions in July.
In that respect, they are not entirely wrong. The ethylene reference for July, which is the major yardstick for PE pricing, went down again – this time by even more than in the previous month, namely by EUR 50/t. Reductions of the same size are thus more or less on the cards. Producers are hoping for a trend turnaround before the end of the month, because, once sold, the material will cease to put any pressure on stocks, and at the same time, the recent lively influx of imports seems to be on the decline. Presumably, speculative buyers will quickly stock up with material as soon as they see prices close to bottoming out.
As expected, June saw further price deterioration for medium-reactive ortho resins. There was a decrease of EUR 30/t in June. This indicates that the resins have caught up with the sharp decline in the preceding month’s decline in the reference contract for styrene, their principal feedstock.
Styrene prices, however, are pointing upward again for the second consecutive month, thus creating a degree of counter pressure. A rollover appears likely in July, not least due to softening demand.
Notations for the glass fibre products covered in this report remained unchanged in June. At the beginning of the new quarter, there are only vague rumours of slight price adjustments in Europe, so that prices remain steady at the existing level.
Standard Recyclate June 2017: Notations mostly moving horizontally / Pressure on rLDPE prices limited to pure grades / Slight premiums on rPET / No important movements expected for July
Only the notations of pure rLDPE grades were still under pressure in June. rHDPE injection moulding grades were also declining slightly, while rPE tube prices could gain marginally thanks to the ongoing construction season. As for rPP, homo materials trended a bit stronger than their copo counterparts did, while rPET prices could benefit enough from the beverage season to see some moderate premiums.
Market players are not expecting any significant price changes in the weeks to come. Pure rLDPE grades are likely to experience further pressure from the primary market, especially as the upcoming holiday season dampens demand. By contrast, seasonal effects are still supporting rPE tube and rRET prices.
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 2017: PC and POM regrind material partly see marked increases / Lively demand from all segments / Rollover probable in July with the exception of polyamides
The picture on the recyclate market in June was characterised by increases of up to EUR 80/t. With the exception of the polyamide secondary product, prices of all the regrind types rose considerably. Demand also remained strong even shortly before the start of the holiday period. It was no longer just the automotive industry that acted as the driver, but all other sectors, too. The majority of production plants were operating normally, whereby the supply of base material can, for the most part, be described as just about adequate. The order situation for the month of July is good.
Especially PC was virtually unstoppable as a result of the tight supply situation, both in the primary and in the secondary sector. The scarce availability of base material dictated the recyclate price, which followed the upswing on the primary market. The sideways tending feedstock bisphenol A provided little additional impulse. For the polymers on the primary market, price hikes have already been announced for the second half of the year in view of the ever tighter availability. With a certain amount of delay, this is also likely to drag prices of the secondary raw materials up.
The unchanged shortage of base material is, however, also leading to a few bottlenecks in the supply of recyclate. The subdued demand in the holiday period will initially cap the rising prices. A firm rollover is the most probable scenario for July – also for the recycled ABS/PC blends.
Although the plunge in ABS primary material was initially stopped by the turnaround with styrene, the recycling companies were forced to pass on the previous higher cost of the base material to their customers. That led, with a certain delay, to increases averaging EUR 50/t. Despite the lull in demand during the upcoming holiday period, recyclate prices – even though they were produced at high costs – should remain stable. There is little scope downwards due to the still high base material prices.
Whereas recycled PP copolymer and POM tended firmer as a result of the solid demand primarily from the automotive segment, polyamide recyclate has so far been spared the long overdue price increase emanating from the half-yearly fixing of prices in the primary sector. Recyclate prices for both polyamide types therefore remained unchanged in June, with the situation also staying stable for the respective feedstocks, adipic acid and caprolactam. With the approaching start of the second half-year, however, primary product prices are likely to rise considerably to cover the recent rises in feedstock costs. For this reason, recyclate prices will also probably climb quite significantly. We anticipate hikes of around EUR 50/t.
