Price Reports June 2023

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 June 2023: EDIT: Weak demand causes quotations to fall / A lot of material on the market despite plant cutbacks / Producers and processors have little hope for soon improvement

PE: The price of C2 feedstock fell by EUR 80/t in June. In the case of PE, this prompted triple-digit price reductions across the board. Despite production cutbacks, in the European market, supplies are still available in abundance. This is due solely to the weak demand, however, which has failed to pick up due to reluctance on the part of consumers.An increasing number of European converters are attempting to reduce their contract volumes to a minimum and purchase their material on a spot basis. This is because end users are vigorously demanding price reductions too. The C2 contract has gone down again for July (by EUR 40/t). The start of the vacation season is also likely to weaken demand further. This will put even more pressure on prices in July, August.

PP: The sharp decline of EUR 80/t in the C3 contract had a major impact on June trading in Western Europe. The wide gap to spot volumes and the soft demand created additional downward pressure, with the result that triple-digit rebates were the order of the day. Supply well exceeded demand. As more and more buyers took their orders to the spot market, contract prices started to lose their importance. Prices for compounds saw only double-digit dips, but here as well, producers were unable to improve their margins significantly. For July, additional concessions are shaping up for both PP and compounds, thanks to the EUR 50/t setback in the C3 contract. With the summer holidays cranking up, any efforts to stimulate demand would surely be in vain. Market players are now looking with great interest to August, when a new plant in Poland will pad the already abundant supply.

PVC: The downward trend in PVC prices continued in June. Apart from a brief interruption in February, quotations have now gone down for 13 months in a row. To put this in perspective, prices had risen for almost two years beforehand, which means they are still considerably above the pre-Covid level. In June, it was once again weak demand and the declining cost of C2 that exerted pressure on prices for base PVC. Quotations went down EUR 80/t on average due to abundant supply and competition from low-cost imported goods. This shows once again that prices are no longer worked out on the basis of passing on half the C2 cost. Quotes for compounds also went down. The overall situation is not set to change much in July. C2 fell again and further cost reductions can be expected for plasticisers. titanium dioxide. Further price reductions can be expected for base S-PVC and compounds.

Styrenics: The decline in the styrene reference and continued weak demand in the European market once again depressed prices in June. Most discounts exceeded the cost reduction, some even significantly. The economic environment in Europe remains gloomy. Further declines in July are not out of the question, especially as the onset of the holiday season is not exactly stimulating. As the styrene reference contract dropped again in July (-EUR 87/t), prices for PS, EPS are expected to decline further. Eroding composite costs are likely to lead to new discounts for ABS as well.

PET: In June, even the very last optimists had to bury their expectations of a revival in demand. Despite the hot weather, demand remained weak. Inflation is evidently dampening the consumer mood to an even greater extent than had been expected. At the same time, imports from the Middle and Far East continued to surge onto the market against the backdrop of the global slump in demand. European producers thus cut back their production to the very limit of what was technically feasible. In order to be able to sell even these lower volumes, customers were increasingly offered sliding six-month contracts at favourable conditions for previously unseen small to medium volumes. For regular monthly business, prices generally went down by more of a mid-range two-digit figure. In July, repeat orders could be received from end markets again in isolated cases, but by far the majority have written off the season.

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 2023: Treats to entice converters / Import volumes exert massive pressure on European producers / Demand set to remain weak

The import situation is causing increasing upheaval for a number of types. Importers are paying a listing fee, running into six figures in some cases, to be eligible to supply European converters of engineering thermoplastics. The fees are generally based on the assumed purchase volume for the second half of the year. At the same time, suppliers are lowering their prices for six-month contracts in a bid to keep converters onboard.

To ensure that the actual polymer prices do not slide down too far, the route frequently adopted is one of significantly higher annual bonuses. And payment is made easier too – with higher discounts for cash and payment terms of up to 45 days at the same time.

This is the main news for the summer while, for the rest, almost everything remains unchanged. More imports were seen, especially for polyamide 6.6, PBT, POM, and PMMA – and these will also determine the picture over the weeks to come. Coupled with a low level of demand overall, prices are likely to give way still further – as was already the case in June.

Converters are able to choose their suppliers, which is why the latter are in a predicament from which there would seem to be no easy escape. Buyers are also expecting reductions in the energy cost supplements that are still being levied.

No momentum is emerging from markets anywhere. The automotive sector is holding up, despite the production cutbacks at Volkswagen in Emden, Germany, even though a greater degree of caution is now evident.

The building industry, by contrast, is set to give up more ground, and caution is being urged in the E&E segment as well. August has thus been written off already and converters are focusing on September.

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 2023: Reductions for TDI reach 7% / Sparse demand from application areas / Foamers have to hit the brakes

While positive signals were emerging for thermoplastics in Europe a few days ago – especially from the automotive industry – polyurethane feedstocks have started to anticipate the forthcoming renewed slump in demand. In the case of isocyanates, TDI in particular was hit hard. The noticeably long market prompted sellers to approach converters with concessions right at the start of the month. MDI also reported triple-digit reductions, in individual cases at least.

The initial improvement in demand from the European automotive sector only lasted until midway through the month. After that, follow-up orders failed to materialise. The already-weak demand from the construction sector also underwent a further decline.

Prices are set to fall further over the weeks to come, since demand is very weak. Only the extent of the reductions is still unclear. Some converters are expecting lower import prices once again, while others think that an increase in import prices is on the cards. There are also signs of large-scale job cuts at PU foamers, particularly in Eastern 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 the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!

  Composites/GRP June 2023: Bitter battles for customers and orders / Lower costs pressure resin / Glass fibre prices hold up well

The styrene contract plummeted again on the back of continued soft demand, dragging ortho resins down with it. There was no impetus from customer industries or from other starting materials to support prices.

In mid-June, the “VW shock” with production stoppages and capacity cuts at the carmaker’s plant in Emden, Germany, made the market nervous and buyers more cautious, including those not supplying automotive OEMs. Whether resin or glass fibre, converters ordered only the bare minimum and not a gram more.

There were persistent rumours of impending plant shutdowns, in particular those supplying the depressed construction sector. A bitter battle over customers and orders is in progress. In July, resin prices are expected to crumble further, by a similar margin as in June.

Despite the lack of impetus for business and adequate supply, glass fibre prices remained unchanged in June. Most players were expecting rebates, but these failed to materialise, due in part to the thin supply of imports.

The upcoming mid-term price rounds are unlikely to see significant rebates, even though the market could support that. If producers’ inventories are still full toward the end of summer, some momentum could be seen.

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 2023: Prices head downwards / Weak demand and competition from cheap off-spec virgin material make life difficult for recyclers / No signs of improvement in sight

Things are going downhill. The downward trend in recyclate prices that has prevailed since last summer is still ongoing in June 2023 in the face of weak demand and high inventories at recycling companies.

Little is set to change in this downward trend over the coming weeks, particularly since there are no discernible stimuli that would prompt a turn for the better. On the contrary – the start of the holiday season will most likely trigger a further cutback in general demand.

The recyclers are now standing with their backs to the wall, since call-off volumes are reflecting the impact of the overall economic downturn along with low-priced off-spec virgin material and cheap recyclate imports. At the same time, they frequently have such high inventories themselves that they are having to place volumes on the market. The situation is particularly dire for a number of materials, such as dark rLDPE, where purchasing costs are high due to a shortage of base material, leaving the recyclers with virtually no scope for price reductions.

Another problem is that the European market is becoming increasingly fragmented. Numerous relaxations and bans in the individual EU states have created a hotchpotch of different national provisions. This is inhibiting trade and investment. A fair number of industry players are thus lamenting the lack of any political perspective for uniform regulations to govern the European recycling industry.

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 2023: More major reductions hit market / Better demand especially from carmakers / Little stock-building expected before summer break

Here and there, a reduction in the volume of imports erased some price pressure from the European market, but this was the exception rather than the rule. The majority of prices in Western Europe tumbled, and in Eastern Europe even more heavily in some cases.

In the coming weeks, prices for most materials are expected to continue to fall. Exceptions are likely to be rABS, rPOM and above all rPP, because less recycled material of these types is being imported. For PP, base material is also on the short side.

Orders above all from the automotive industry have increased considerably of late. This trend is expected to consolidate, but there can be no talk of a massive increase in demand. Nearly all PIE panel participants said they intend to hold back with any stock-building because they are completely unable to forecast what will happen in August and they fear another short-term flash in the pan. Only here and there could there be some moves to replenish stocks.

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!