Price Reports March 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!

Standard Thermoplastics March 2015: Market turnaround as notations surge/ Supply situation under pressure from forces majeures, maintenances, allocations and import weakness / Upward pressure remains for now

PE: Developments on the European polyethylene markets in March 2015 defy description. In a particularly fierce about-turn, producers were able to lift prices even above the level of the already significant EUR 100/t increase in March’s ethylene contract. They were aided by the tight supply situation – in addition to output restrictions at several crackers, there was an unusually high number of force majeure announcements for European polymerisation plants. The fact that from a global perspective European prices are particularly low, coupled with the fall in oil prices and the euro’s weakness put a further damper on imports from the Middle East, which had already dwindled significantly because of import duties.

No matter how questionable the current situation may seem, it remains a fact that the market has become increasingly tight at a time of rather strong demand. This means that prices are likely to rise again in April, and could potentially even exceed the EUR 55/t increase in the monthly ethylene contract. On the other hand, barring any unforeseen developments, the production situation should improve considerably in the next few weeks. By then the rather stable course taken by the low oil price should once again exert a calming influence on PE prices.

PP: European PP markets underwent a dramatic shift in March 2015. Although they had successively improved their margins in the previous months, producers mercilessly added further increases to the already massive EUR 105/t rise in C3. The writing had been on the wall, as spot notations for injection moulding grades in particular – which had previously plummeted – started pointing up over the course of the past few weeks. By contrast, the price of freely negotiated PP compounds followed the course set by indexed contracts, adding the proportionate cost increase.

Since the upward trend shows few signs of easing in early April, prices are likely to rise further in the first month of Q2. The increases could even surpass the EUR 55/t rise in the monthly propylene contract. Since the market is rather tight, this scenario could hold true not just for standard grades, but for compounds as well. The only consolation currently seems to be the possibility that the current production problems will ease in the coming weeks. Once that happens, the continued weakness of oil should have a dampening effect on potential increases, regardless of any upheavals on the polymer front.

PVC: European PVC producers finally managed to fulfil their long-harboured wishes for margin improvements in March. Caught in the upward spiral of the standard thermoplastics markets, the onset of seasonal demand and tightening availability provided the perfect setting. Manufacturers quickly set about lifting the lower end of the PIE price range to more “normal” levels. They nevertheless hardly succeeded at pushing through the full triple-digit increases they had called for. The cost of the refined PVC grades also rose in response to increases in additives as well as C2 and C3 derivatives.

Notations are expected to trend up further in April now that the monthly ethylene contract has been fixed EUR 55/t higher. PVC producers have already let it be known that they are seeking an additional EUR 50/t margin improvement on top of the proportionate C2 cost rise. With the market still trending tight, the situation is developing in their favour.

PS: The surprisingly steep rise in the SM reference contract also drove styrenics prices up in March. Producers of PS and ABS especially leveraged the tight availability to not only pass on costs, but also improve their margins. Even EPS suppliers managed to pass on a large share of the cost rise. For processors, the sharp increases felt like a kick in the gut. However, they were left with little choice but to swallow the bitter pill to secure any volumes at all. In view of tight supplies, the motto for all styrenics in March was "volume before price". In fact, some producers did not even have enough material to supply their regular customers.

The current situation is unlikely to change much in April either. Although the SM reference contract had not yet been fixed by press time, considering the recent spot market antics, additional steep rises appear almost inevitable. With the supply situation still tight, processors in need of volumes have little grounds to oppose their producers’ calls for hikes. The market will only calm down once the supply of SM – and styrenics in general – relaxes. If prices should by then differ greatly from the underlying costs, a downward correction will inevitably follow.

PET: The firming trend in the global petrochemical chains is increasingly impacting polyester, too. After the European PX and MEG contracts rose by EUR 70-90/t and amid the onset of the annual spring revival, the price of small- and medium-sized PET lots also rose, even though the increases fell slightly short of the rise in costs. Bulk orders could no longer be had for less than EUR 1,000/t. In regional terms, the hikes were more pronounced in Italy, whereas Asian imports were few and far between and, as a result of the euro’s weakness, also particularly expensive.

By mid-month rPET notations also had begun to reflect the firming trend that commenced in the primary markets in February. Pressure on recyclers eased a bit in March, as the price of bulk virgin material orders once again began to exceed that of recyclate. PET prices will likely continue rising in April. The extent of the hike will depend on how costs, supply and demand develop as spring gets underway. As long as the euro remains weak, very few imports will likely arrive at Europe’s shores to complement regional output.

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 March 2015: Mixed bag / Polyamides and PBT slide once again / PC, POM and PMMA tread water / Commodity-related grades soar / Weak euro dampens imports

Developments on the European engineering thermoplastics front spanned a wide range in March. While polyamide and PBT notations slid a bit further in response to February's tumble in oil prices, PC, POM and PMMA stabilised and moved sideways. In the latter case, a lack of imports – the result of the euro’s weakness – had a calming effect. Notations for the more commodity ABS and PP compounds, by contrast, soared in the wake of the virtual price explosion among standard thermoplastics.

Having bottomed out in March, April’s benzene contract was fixed EUR 133/t higher. This will surely have a stabilising influence on derivatives PC, PA 6 and to a certain extent PA 6.6 as well, largely bringing to an end their downslide. The price of the more traditional engineering thermoplastics is also expected to stabilise.

Countering this trend are ABS and PP compounds, both of which are expected to rise strongly in the coming weeks. After adding EUR 175/t in March, the notation for the extremely tight styrene monomer skyrocketed by another EUR 300/t in April. Although at EUR 55/t, the propylene increase was comparatively moderate, its availability is also tightening, heralding further upward momentum.

Suppliers of other engineering thermoplastics will likely try to exploit this psychological uptrend to push through their own hikes. It will probably take some time, however, before the trend in the standard thermoplastics market has a belated, and much milder, impact on engineering thermoplastics 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!

Polyurethane Feedstocks March 2015: Prices mostly stable or pointing down slightly / Notations likely to rise in April

Despite the EUR 19/t increase in March’s benzene contract, notations for polymeric MDI dropped slightly. The price of large-scale orders held stable at a level slightly below that of the PIE price range. Livelier demand also kept pure MDI on a mostly stable footing. With the market trending long, TDI notations also fell slightly, even though the price of toluene rose quite substantially in March. The same was true for flexible foam polyols, which showed no signs of reacting to the triple-digit rise in the monthly propylene contract that also took propylene oxide up with it. Amid disappointingly low demand for this time of year, rigid polyols prices still held firm.

All signs point to a turnaround in April. The fact that benzene spot notations have risen by triple digits in the first weeks of March will not go unnoticed by MDI. At least 40% of the aromatic’s rise will likely be factored in. A further driver is the widely expected post-Easter revival in demand. The increase in toluene prices is sure to impact TDI notations, even if the good supply situation will probably cap the upward trend. With the market awash with renewed rumors about a tightening in propylene oxide, flexible polyols purveyors can expect significant hikes. The final extent will depend on how demand shapes up.

.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 March 2015: Resins prices still follow the downtrend seen in SM early this year / Notations bottom out / Market turnaround / Chopped strand mats trending up

Notations for medium-reactive ortho resins in March still paid homage to the previous months’ decline in key feedstock styrene. Prices fell by an average of EUR 30/t. By contrast, notations for chopped strand mats and direct roving remained largely unchanged, as a result of which PIE’s “Plastixx Composites” index fell by just 1%. At 1,137.34 points it looks like the index may have bottomed out for now – not least since all signs point to increases in the near future.

Ortho resins prices will start feeling the turnaround in styrene in April. Over the course of the last two months, the feedstock has risen by EUR 475/t. Although this extreme increase does not appear sustainable – especially with a view to styrene’s cost base – it will nevertheless drive resins prices up, even if only temporarily. As soon as the SM supply bottlenecks ease, notations will likely be corrected downward again – a development that will, in turn, also impact ortho resins prices at some delay.

Chopped strand mats prices are also pointing up in April. A lot of processors have emptied their stocks, and the high anti-dumping duties coupled with the euro’s weakness are keeping a lot of imports at bay. The resulting bottlenecks will offer an excellent opportunity for European producers to raise their 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!

Standard Recyclate March 2015: Reversal in virgin material notations stops recyclate price erosion / Elimination of low prices raises lower end of the price range / Demand picks up / Recyclers plan additional hikes

The striking turnaround in western European virgin material prices in March ended the decline in standard recyclate notations. However, the significant primary market increases have not yet impacted the entire recyclate price range. Solely the cost of some low-priced rLDPE, rHDPE blow moulding and rHIPS grades was lifted. All in all, the lower end of the PIE price range pointed up. Only coloured rPET flakes prices fell slightly as regrinders had to pass on the decline in purchasing costs.

Scrap plastics were generally sufficiently available, allowing recyclate lines to operate normally. The exceptions were the limited availability of scrap for rHDPE and an over-abundant supply of bottle scrap for rPET.

Demand for recyclate picked up – a trend that is likely to increase in the coming weeks due to seasonal and cyclical effects. Another driver is the tightness in the virgin material market. Following the primary market rises, recyclers in German-speaking Europe are demanding price increases of up to EUR 30/t. In view of the good supply situation and stable purchasing costs, however, they will likely only manage to gain some of their original calls.

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 March 2015: Notations largely stable / Only rPA sees slight erosion / Production scrap trending tight / Demand picks up / Prices likely to move in different directions at onset of Q2

There were hardly any changes in engineering recyclate prices in March. Only rPA and rPA 6.6 notations declined slightly. As a result of the low production activity of previous months, scrap material tended to be on the short side, which was reflected in stable purchasing prices. Demand rose a little due to the start of the spring season and the healthy economy.

Demand is expected to pick up in the coming weeks. Prices, on the other hand, will probably move in two different directions, not least since the talks for the coming quarter will open up more room for negotiation. Whereas cost increases and tendencies towards shortages will likely drive up rABS, rPOM and rPP compounds prices in the coming weeks, rPA 6, rPA 6.6 and rPC notations could decline 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!