Price Reports June 2020

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 2020
Standards Thermoplastics  Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate  Engineering Recyclate

 

 

  Standard thermoplastics June 2020: Prices pick up again / Higher feedstock costs rarely factored in full into polymers / Holidays dampen demand / More hikes in July

 

PE: Only with LDPE and C6 film grades did producers manage in June to factor in the EUR 60/t increase in the cost of ethylene without difficulties. With the pipe grades, producers succeeded in lifting margins significantly. For all other PE grades, the attempt to pass on the higher cost was destined to fail since converters had stocked up on material when prices were at their lowest, and they were then in a position to show restraint. For the same reason, demand was often below expectations. Packaging buyers were sitting on significant stocks, while at the same time the higher price slowed down sales to converters. In the agricultural segment, the rain in the second half of June provided stimulus for growth. Films for the food and hygiene sector were largely stable. In most cases the production cutbacks had little effect on the situation. As the holiday period is starting, demand in July is likely to soften. Apart from that, the rising prices will put an additional damper on business. There is hope that governments’ support programmes will have a positive influence on consumer purchasing. A price increase for most film and injection moulding grades is likely following the tough negotiations that saw the C2 reference contact fixed EUR 84/t higher for July.

 

PP: On the back of the EUR 60/t increase in the July reference contract for C3, Western European polypropylene prices did an about-face and pointed upwards again. While the cost rise for homopolymer could be factored in for the most part, this was not generally the case for copolymer and compounds. These markets are still struggling with the ongoing oversupply. This trend shows no signs of abating, as still no change is expected in the soft demand from the automotive sector. The scenario going into July is not much different from the one seen a month ago. This means that the fresh rise of EUR 75/t in the C3 price is unlikely to be completely reflected in notations for copo and compounds. For homopolymer grades there is a greater chance that notations will firm, as capacity cuts made earlier are still in place. At the same time, the beginning of the school summer holidays and short-time working implemented by many converters will curb demand.

 

PVC: June brought an end to the PVC price reductions of the previous two months in Western Europe. Producers priced in the full pro-rata increase for ethylene while, for S-PVC (U), the cost stability of the additive components held price hikes in check. Suppliers’ calls for price increases were backed up by the level of demand, which picked up again over large parts of Europe as the coronavirus measures were eased. July is set to continue in the same vein as the end of June. Another increase is on the cards for the cost component of ethylene, which ought to result in a further hike in PVC prices. The pickup in demand is also providing support here.

 

Styrenics: Western European styrenics prices halted the sometimes significant price decline of the previous months and started to head upwards in June. Once again, the trend was set by the styrene reference, which rose EUR 64/t in June. Only a few suppliers of polystyrene, EPS and ABS succeeded in passing on the cost increases in full. In most cases, suppliers had to settle for slightly lower hikes. However, processors stressed that the cost reductions also were not always fully priced in during the period of sharp price decreases. In July, prices are expected to trend upward, considering the SM reference was fixed EUR 86/t higher. Meanwhile, demand is seeing contradictory stimuli. On the one hand, the lifting of coronavirus restrictions is boosting demand, but on the other hand, there could be some dampening effects from the onset of the holiday season.

 

PET: With oil prices stabilising, notations for petrochemical feedstocks rose in June. The decisive raw material for the PET chain, paraxylene (PX), similarly bottomed out in May, undergoing a moderate increase in June. Despite this, the slight surge sufficed to firm prices on the European PET market. Suppliers managed to push through initial hikes, especially in the small niches at the upper end of the PIE range. Most purchases were concluded with a rollover, however. European producers were helped by customers’ need for reliability, which led them to shun import offers in most cases. Sales ultimately remained subdued due to the continuing coronavirus crisis, despite slight signs of a pickup. Although a number of advance purchases were seen on account of prices bottoming out, converters remained cautious for the most part. Suppliers are hoping that prices will continue to firm in July, although no one is that certain with the question of a second wave of the virus. In the meantime, the first Covid-19 wave is still raging in South America and India. Stabilisation of the market is then not on very firm footing. Additional, slight increases could materialise. However, the situation will remain subdued, since the surge in demand from tourist destinations will presumably be considerably less pronounced than in previous years, among other factors.

 

 

 

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 June 2020: Prices fall to near-record lows / Producers fight plummeting prices with little success / Demand livelier but still weak / Automotive gives a glimmer of hope

The second quarter was an absolute disaster for engineering thermoplastics in Western Europe, especially for the automotive industry. Demand barely recovered by the end of June. The average capacity utilisation of production plants connected with the auto sector was around 30% – perhaps even a little better than expected. Industries such as household appliances and construction appeared more stable but have now also lost ground. The only bright spot was sheet material for personal protective equipment.

The global oversupply that exists with many materials despite massive production cutbacks is resulting in aggressive pricing tactics, which is why prices trended farther downwards for most grades covered by this report. For one or two buyers, prices have since reached a historic low. From converters in the automotive sector, there was word of listing costs like in a supermarket. The exceptions were POM and PBT as well as modified polyamide grades, which are produced to order and therefore take no account of price reductions.

The end of short-time working at VW triggered a sigh of relief throughout the automotive industry at the beginning of July. However, plant capacity utilisation – including with OEMs – still varies significantly. Whereas some production lines are running flat out, others are bobbing along at a low level. For this reason, most converters are not prepared to accept price increases.

Rising feedstock costs in the aromatics chain will be used by producers to justify the calls for increases that will inevitably be brought to the table soon. Producers will try to put a brake on the generally low prices from falling farther.

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 June 2020: Downswing continues / Consumer markets weak / OEM start-ups have no impact / Trend reversal will depend on demand

Without exception, Western European notations or the polyurethane feedstocks covered in this report pointed farther down in June. While the decline in isocyanates prices seemed to be bottoming out on the back of firming precursors, polyols, in particular the flexible grades, came under severe downward pressure.

Even a slight stabilisation of demand could not hold off the expected further erosion of MDI prices, nor could the rise in the benzene contract price. Demand for adhesives and insulation materials was somewhat more robust, though neither of the technical foam applications made any progress. In contrast, producers’ capacity cuts for polymeric MDI tightened availability of the pure grade markedly. TDI felt the pressure of the soft consumer demand more strongly than expected.

The firming of all contract prices for precursors, in tandem with the slight rise in demand in some market segments, could stabilise the isocyanates or at least prevent further significant deterioration. Considering feedstock prices are still standing at low levels, there could theoretically be additional scope for further concessions in MDI. With more attractive export prospects, producers are unlikely to be very conciliatory.

Whether the long awaited trend reversal comes to pass will depend in major part on how demand develops. The widespread implementation of short-time working and staff reductions, with the resulting negative effect on sales of cars and upholstered furniture – coupled with the typical summer lull – do not exactly speak for it.

 

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 June 2020: Resins lose some ground and may bottom out in July / Market quieter / Most glass fibre products unchanged

 

Price movements for ortho resins in Western Europe were uneven in June. While some buyers were able to obtain rebates similar to spot prices, others paid slightly more. Slack demand continued to dominate the economic picture, but on the whole the trend was toward a quieter market. The competition for supply came to an end. On average, ortho resins notations gave up EUR 20/t and may have bottomed out.

With the beginning of the summer holiday season, demand is likely to remain thin, which will noticeably counterbalance the EUR 86/t increase in the styrene reference for July. Against this backdrop, a rollover is possible, but also slight increases may result.

Due to the sector’s long-term contracts, the glass fibre market probably will see relatively little momentum. Despite weak demand, producers are unlikely to agree to concessions. Hopes that business will pick up meanwhile outweigh concerns, and producers will thus bide their time.

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 June 2020: Recycled LDPE and rPP prices roll over / Further decreases with rHDPE and rPET / Demand remains weak / No upswing expected in the near future

 

In March, all polyethylene recyclate prices in Western Europe yielded, some even significantly, because price pressure from low-cost virgin materials was strong. Recycling companies were again forced to make concessions. Pure grades were less affected in some cases. With a few exceptions, demand remains stuck in the low season, and this will only change slowly. Demand is likely to increase in small steps in the first half of April. A little more momentum is not expected until after Easter.

 

PE film recyclate saw price decreases and is likely to decline further in April. Primary material notations went down significantly due to the rapid cost decline, and the shorter production month is likely to exert additional pressure on prices.

 

Most rHDPE grades, for which the price gap to the virgin materials market is too narrow, are also likely to be hit by the crisis in April. There were already spot market offers with significantly decreased prices for lower-specified primary grades in March, which resulted from panic selling following the recent plummeting in oil prices. Recycled polymers had to follow suit, although domestic scrap materials have to be purchased at a higher price. While recyclers will try to limit the ongoing margin erosion, it is highly unlikely that they will be able to stop it.

 

PET recyclate showed little change due to long-term purchase contracts, despite the further decline in virgin material prices. Purchase costs for clear bottle scrap, for example, increased by EUR 36/t. Due to the desolate margin situation, the rising costs of production scrap are to be absorbed by cutting back production. Any strong effects on recycled PET will probably be additionally cushioned by the start of the beverage season. Therefore, rPET might end up with a rollover. The limited logistics connection to Italy is already causing difficulties – both on the supplier and customer side.

 

 

 

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 June 2020: Prices recover after last month's crash / Occasional reductions for automotive grades / Regrinders look to reduce high purchasing costs

Following the large price reductions recently, the Western European market for engineering recyclate calmed down in June. There were only a few isolated price cuts with the automotive-oriented grades, rPA 6 GF black, rPA 6.6 GF black and rPC/ABS blends. Otherwise, regrinders’ narrow margins offered little or no scope for further decreases.

Recyclers are struggling with high purchasing costs. Because of production standstills and processors’ implemented short-time working, very little scrap was produced, and excessive prices were then demanded for the little material available. Since recyclers are in no position to raise selling prices because of the currently weak demand, they will do all they can to reduce their purchasing costs and improve margins.

 

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!