Price Reports June 2021

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!

Articles: June 2021
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

 

  Standard thermoplastics June 2021: Almost all grades reach a plateau in June / Situation remains difficult in undersupplied PVC and ABS markets / Notable price corrections expected in July

PE: The vast majority of PE prices neared their zenith in June. After rising for several months, LDPE film and several HDPE types retreated, and sellers of other grades had to be content with increases below the C2 cost rise of EUR 30/t. Only in extremely tight markets, such as LLDPE (C8), HDPE pipe and EVA, were producers able to push through price hikes equivalent to or above the rise in the cost of monomer. With most other materials, supply remained tight, although there was improvement with the arrival of the first imports and the restart of some European production plants after maintenance turnarounds. The trend towards a better supply situation is likely to continue in July. As a result, and because the previous cost level was extremely high, most PE prices will presumably fall slightly or at least remain at their previous month’s level despite the latest rise in the cost of C2 (up EUR 40/t in July). At the start of Q3, market players can only expect increases for EVA and, following the unscheduled outage of a European production plant, HDPE pipe 100.

PP: Soon, there will be no more wiggle room at the top end of the price chain. The already-high levels along with the improving supply situation will limit the upward potential for standard polypropylene. In June 2021, producers were only able to factor in the EUR 40/t rise in the C3 contract for certain grades. Others rolled over. For compounds, it was a different story. Here the C3 increase pushed contracts indexed to the monomer a notch higher. For freely traded volumes, the upward curve was even steeper, due to higher prices for additives and fillers. Demand varied from product to product. While buyers of standard PP, in view of the higher costs, covered only their immediate needs, compounds continued to see brisk ordering by the automotive and white goods sector. But here, too, demand should begin ebbing over the next few weeks, as the automotive industry, facing a shortage of semiconductors, will have to curb production. Despite this, the new C3 contract agreed for the third quarter will drive prices for compounds farther upward. On a brighter note, the months-long rally for standard PP should come to an end in July. The improving supply will set price corrections in motion despite the higher C3 reference contract.

PVC: The cost surge is still ongoing, with PVC prices continuing their unabated upward trend in June 2021 and setting new all-time highs. Demand remained brisk, especially from the construction sector. The driving force, however, was once again the tight supply situation, with the increase in the C2 reference (+EUR 30/t) playing no more than a secondary role. However, there are now growing signs of the supply situation improving. Several European producers have brought their plants online again, or are poised to do so, and the foreseeable increase in exports promises further relief. Although this is unlikely to bring the upward trend in prices to a halt in July, it will at least lose some of its momentum.

Styrenics: The wheel keeps turning – but now, it is taking the other direction. After several months of extreme bullishness, during which prices reached record highs, the styrenics costs began to fall in June 2021. They thus followed the overdue correction of the styrene reference, which fell by EUR 401/t after the steep bull market of the previous months. EPS suppliers took advantage of the strong demand and tight supply situation by retaining large parts of the cost reduction. Polystyrene producers tried something similar, but with much less success. After some producers tried to regain market share with discounts at the level of the SM reduction, other players also readjusted their price reductions, so the scope of discounts was noticeably widened in the course of the month. Meanwhile, ABS suppliers deviated comparatively less from their price expectations – the lack of imports and the associated scarcity continue to play into their hands. Styrenics prices are likely to decline further in July, especially as the styrene reference again fell sharply at the start of Q3 (down EUR 208/t). The producers’ approach is likely to be similar to the one in June: they will once again try to pass on only a proportion of the cost reduction to the market to further improve their margins. And once again, their success will depend largely on the supply situation and further price expectations for the next month.

PET: The price bubble for PET in Europe, which has been gaining pace over the past few months, deflated somewhat in June, as expected. Production in Europe returned to normal, and the direct feedstock of PTA was available in sufficient quantities once again. Despite the rather hot weather of late, demand did not pick up to the extent that suppliers had hoped for. Converters were still able to readily cover their requirements from stocks. European supplies thus proved to be more than adequate, and the continuing weakness of imports had no major impact. In most cases, the price reductions achieved for the regular, small and medium purchase volumes reported on by PIE were between EUR 30/t and EUR 50/t. In the case of large purchases, rollovers have mainly been reported, due in part to the link with feedstock products in this field. Slightly increasing notations even resulted in isolated spot transactions. A continuation of notations at their current level would seem to be the most likely scenario for July, the first full month of summer. A briskening of demand is expected in many cases, but this will be largely met from European production. The fourth pandemic wave emerging in Portugal is still, however, looming threateningly on the horizon.

 

 

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 2021: All types roll over / PA 6.6, PMMA still heavily affected by weak feedstock chain / Demand varies / No changes expected in July

Following the enormous upward movement in the previous months, prices initially reached their peak in the final month of the second quarter. With the massive drop in the cost of benzene, prices across the board remained in a rollover, aided by massive opposition from converters. At the same time, the situation in numerous feedstock chains has eased, with the exception of PA 6.6 and PMMA, where limited output and a lack of imports still had an adverse effect. With relevant glass fibres extremely short, the production of reinforced compounds also remained weak.

Demand from the building sector, including E&E applications, remained very strong, and producers were seldom able to fully supply ordered volumes. In many cases, even fixed allocation quantities could not be met in full. On the other hand, car production partly balanced out this lively business because assembly lines had to be slowed due to the chip shortage.

Quarterly buyers will presumably be hit by the price increases of the last few weeks in one fell swoop. Buyers who order on a monthly basis, however, might find that adopting a stubborn negotiating strategy could force a rollover, even if some additives remain scarce and expensive. The start of H2 will be very much characterised by lower demand from the automotive industry. Some OEMs have planned for longer-term production stoppages or are already taking such measures. This will reduce the call-off of components and thus also the ordering of raw materials from this sector.

 

 

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 2021: MDI still climbing / TDI eases for the first time since June 2020 / Order volume uneven by geography and application / MDI may decline in July

The polyurethanes movement on the European market was uneven in June. While notations for polymeric MDI and rigid polyols in particular moved yet higher on strong demand from the building sector, the pressure on TDI and flexible polyols eased for the first time in a year. Coming from a high level, TDI gave up substantial ground. Following declines for benzene, higher production costs were no longer the driving force behind price movements. Production bottlenecks also ceased to be an important factor.

On the whole, the limited supply of polyols continued to be a bottleneck. In bedding and upholstery as well as automotive, ordering slackened, allowing buyers some wiggle room in negotiations. Automotive was fickle. Here, orders were clearly below expectation.

In the coming weeks, much will depend on whether bedding and upholstery bounce back when lockdown measures ease. In all segments, refill activity for the most part should compensate for any summer lull. In the building sector in particular, converters should be kept busy dealing with their order backlog for the rest of the year. They will demand price rebates, but it is doubtful they will be successful in view of the continued strong demand. The high prices for TDI are likely to crumble further.

 

 

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 2021: Resins still rising slightly / No downswing in July / More increases for glass-fibre products in sight

Styrene’s strong downward correction was not enough to lead ortho resins prices to finally peak. Other feedstock influences outweighed the price factor. Phthalic acid anhydride prices, for example, hit a four-year high in June. Most resins transactions were settled slightly higher than in May. Despite confirmed delivery, allocation was the order of the day.

Two months of downward corrections in the styrene contract, amid somewhat weaker demand, should lead resins prices to finally peak in August. A gradual restart of idled production facilities for starting materials could provide some relief on the price front. That said, it hardly seems likely that resins will immediately begin sinking. Solely large accounts ordering a narrower product range should see reductions.

The absence of cheap imports sent prices for glass-fibre products soaring. Higher-end products, mostly made in Europe, did not see increases as steep because the high transportation costs did not influence prices to the same extent as for standard grades.

Price increases advised for all glass-fibre products in the third quarter are almost certain to materialise. The only question is how high the hikes will be. At least 10% is being talked about, and some think it could be twice that.

 

 

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 2021: High purchase costs and strong demand fuel new record highs / Upward momentum clearly weakens in July / Plateau emerging

Almost all recyclate prices were once again heading upwards in June 2021. As a result, many prices marked new highs. The development was fuelled by high purchasing costs and/or strong demand. For some grades such as rLDPE natural film, however, the recyclers were only able to enforce premiums at the lower end of the PIE price range because the upper end was already too high.

The scope for further increases is getting thinner for other recyclates as well. The already-high price levels are one reason, the relaxing virgin material market is another. The availability of primary materials is improving, so that many processors no longer have to substitute them with secondary materials. It is true that recyclates continue to be in good demand because of an increasing number of sustainability initiatives. This is still unlikely to be enough to warrant further significant premiums in July in view of the record notations for recyclates. The bottom line is, for the first month of Q3, prices are most likely to plateau.

 

 

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 2021: Prices continue to climb amid strong demand / Recyclers search desperately for substitute sources of base material / Holiday period will ease the pressure only slightly

Despite the plateau reached in some areas of primary markets, the prolonged spate of price increases continued with virtually all recyclate types. As earlier, base material was only seldom available. Unfilled and unreinforced natural-coloured scrap remained even rarer. Despite the mostly strong to very strong demand, customers only received part of what they ordered, and in most cases, only regular customers were served. Some recyclers have now turned to commission compounding in order to keep their business going.

With the exception of rABS and rPP compounds, further increases are more or less on the cards for the upcoming weeks. Recyclers are searching desperately for alternative sources of base material or are trying to find a substitute. The processing of off-spec material has suddenly become acceptable.

Only at the start of the holiday period is there any chance of the situation calming down. However, whether the decline in business activity will be as marked as usual remains to be seen. Despite certain slowdown signals from the automotive industry, recyclers will probably seldom be able to take a holiday break because the backlog is simply too large.

 

 

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!