Price Reports March 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: March 2021 |
|
|
Standards Thermoplastics |
|
Standard thermoplastics March 2021: Hefty triple-digit hikes for most grades / Producers often dictate prices / Processors suffer from shortages / Upward trend expected to continue in April
PE: March once again saw hefty triple-digit increases, with the biggest hikes reaching EUR 360/t. It was producers who dictated the prices, as many inventories were nearly empty. Converters from sectors such as food, hygiene and the building industry could have produced far more had they been able to obtain materials. In April, producers will not be content with only passing on the EUR 40/t increase in the ethylene contract. Announcements of price increases of up to EUR 200/t are already on the table and, with few exceptions, they are expected to go through without protest. On the other hand, the high prices may slow things down a little. Supply is still short in Europe. Producers’ inventories are exhausted and as the maintenance season approached, many producers have been unable to build adequate stocks. US plants – some of which are still in the re-start phase after the winter storms – are not yet producing enough to allow for export. What is unclear is whether they can now meet the local demand. European converters have few alternatives and need to become inventive. Recently, for example, the first material from Kazakhstan was sighted on the European market.
PP: “Customers will pay any price,” a polymer producer commented, pointing to the extremely tight supply situation in March 2021. Call it by any other name, but it’s definitely a seller’s market. Due to the extreme tightness and many buyers on allocation, they were focused primarily on refilling inventories. More often than not, the price was secondary. It’s hardly surprising then that the increases became steeper over the course of the month. Against this backdrop, PP prices agreed upon in March were completely decoupled from the EUR 85/t rise in the cost of C3. PP homopolymer crashed through the top-end of the PIE range, with an increase of EUR 350/t. PP copo went a step further, surging by EUR 400/t. Converters, forced to top up inventories on the free spot market, had to pay even more. Last month’s PP notations beat the previous high seen in June 2015 to set a new record. What’s more, for the first time in recent memory, PP copo was at a premium over PP homo. There is no end in sight for the price rally. The market will remain extremely tight, and the tightness undoubtedly will only worsen. In April, buyers can thus once more expect hikes clearly exceeding the C3 reference contract.
PVC: Apart from passing on the pro-rata price increase for ethylene, producers did not need any further arguments to achieve their demands in March 2021. The hikes extended to almost EUR 200/t, although some buyers did get away with just the extra costs being passed on. PVC notations have now risen for the tenth month running. Plant outages for plasticisers in Germany and France pushed up the price of plasticised compounds still further. The increase, attributable to the PVC base material, then faded into the background. Imports were scarcely able to compensate for the shortage of plasticisers. This resulted in the overall curtailment of production. In the case of pastes, by contrast, contract volumes were generally delivered reliably, without further ado. It was not possible, however, to obtain additional volumes for new projects. The EUR 40/t price hike for C2 in April will continue to greatly push up the price of base materials if the supply situation remains tight. Producers are currently demanding hikes of around EUR 120/t for PVC. The additive components are no longer expected to be the chief problem in April, since the situation seems to be slowly stabilising there. Especially for converters working with the construction industry, the next quarter is the most important quarter of the year. Over the past few weeks, these companies have not, however, been able to build up sufficient stocks in a customary manner. Instead, they will have to get by with the material available to them.
Styrenics: The styrenics market is seeing unprecedented price increases: polystyrene prices rose by no less than EUR 500/t in March 2021, and the average premiums charged for EPS were only slightly lower as well. The main reason for the price explosion was a skyrocketing styrene reference – the feedstock went up by an equally unprecedented EUR 501/t. ABS prices, by contrast, rose to a lesser extent because of the more moderate premiums for the composites butadiene (up EUR 20/t) and ACN (up EUR 120/t). Suppliers, however, could not be satisfied with the purely arithmetic increase in composite costs of around EUR 330/t, as they had to buy ACN and sometimes styrene at much higher prices on the spot markets. Against this background, even the EUR 380/t to EUR 400/t hike they actually demanded from buyers did in fact not constitute any margin expansion. In view of the exorbitant premiums, all styrenics prices climbed to new peaks in March 2021. Processors’ reactions to the price developments varied. Some suspended ordering while others placed a high priority on securing volumes. All in all, demand remained quite brisk. New problems emerged on the supply side, however. Particularly in the case of EPS, but also in the case of PS, producers adjusted production to their customers’ forecasts so as not to be left sitting on expensively produced material at a later date. This approach, however, hardly played a role for ABS, where the market has been totally dried out for months due to a lack of imports from Asia. That being said, it must be added that last month’s price explosion is not the end of the road. April will definitely see new triple-digit premiums after the SM reference contract for April soared a further EUR 312/t. Market players expect that a trend reversal could set in afterwards – ie in May – at least for styrene. As for ABS, the supply tightness is not expected to ease before Q3 2021.
PET: The European PET market unexpectedly took another major hit in March 2021. The force majeure declared at the very large PTA site in Geel / Belgium, at the start of the month significantly reduced the availability of direct secondary material. Since imported supplies remained at a poor level, as in previous months, and seasonal demand for bottle production took off with a vengeance, buyers increasingly found themselves vying for the remaining volumes. The already-feverish spot markets immediately shot up by as much as EUR 400/t again. And hefty triple-digit hikes were even due on regular contract transactions. As is customary in such situations, the price of precursor products scarcely played a role in the negotiations. Those who were in need of material had no choice but to pay up. The situation remained turbulent all over the world, with the previous outages in the US driving up prices both there and in Asia. At present, no rapid change in this precarious market situation would appear to be in sight. A further tightening of supply and the corresponding price hikes are more likely in April 2021. In addition, many bottle producers have only been able to purchase less than their expected seasonal requirements so far. This is making them nervous, as usual, and causing a sharp increase in the level of demand, more or less independently of the actual demand on the end market. Almost anything seems possible.
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 March 2021: Shortage of cable, pipe and headlamps for end-users / Major triple-digit increases / Producers unable to meet demand / US facilities provide glimmer of hope
The global shortage affecting various feedstock lines – and especially ADN for PA 6.6 – has catapulted prices of base polymers to previously unimagined heights, and most compounds followed suit. Polyamide converters in particular had to often swallow price increases that ran into four digits over the course of the first quarter. Apart from that, a majority of types also experienced a bottleneck from additives, including flame retardants and glass fibres.
In many segments, the supply situation could only be described as catastrophic. Some converters were outraged by the producers’ approach, accompanied as it was by delivery times for new orders of at least six months, and in some cases up to a year. In most cases, only 60%-80% of the ordered quantity is actually being supplied. Many converters tried placing larger orders to obtain more material, but this generally did not succeed.
Just how tight the situation is for end-users as well is evident in the calls for help by the otherwise-tight-lipped US car manufacturer GM. The company asked lamp manufacturers, who are normally in stiff competition, to help each other out so an adequate number of products are available for cars on assembly lines.
It would be too early to talk about a possible easing of the situation in April. US production plants are providing a glimmer of hope as they are slowly returning to normal manufacturing. It will, nevertheless, probably take until the end of April or beginning of May before they are fully operational. Most of the engineering thermoplastics covered by this report are likely to see further small increases, predominantly at the bottom-end of the respective ranges. One exception will be standard PA grades for car manufacturing: prices have so far been protected by quarterly agreements but will rise sharply at the beginning of Q2.
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 March 2021: Isocyanates and polyols with triple-digit mark-ups / Shortages persist despite some plant start-ups / Trend in April: Still noticeably firmer
Predictions are difficult at the moment, as we have had to realise again and again. Where PIE expected the peak after the last turn, at least for MDI, the climb continued. The price of MDI polymer again rose by an average of around EUR 100/t, while the pure variant rose even more sharply. The main reason was the renewed increase in the price of benzene. Producers were barely negotiating any more. Allocations were commonplace, and those who did not pay the asking price did not even get the reduced volume allocations.
However, processors have no alternatives as insulation materials in particular are in high demand, and in many cases the usual build-up in inventory was not possible. In the automotive industry, the situation was complex, especially since suppliers have to stand at the ready while carmakers are increasingly not making long-term plans. Overall, demand was high from all sectors.
Initial indications on the spot market suggest that the upward trend for benzene will remain intact in April. This will pull MDI further up – producers have already announced premiums well in the triple digits. With the spring maintenance of a large plant, the situation for TDI might not be much better. Another limiting factor is the pronounced shortage of polyols, which are subject to increasing queries from the US, where the situation still cannot be described as normal again after the return of winter weather.
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 March 2021: Notations for resins and glass fibre rise / Further upswing likely in April / Strategic buying keeps demand stable
The announced hikes of EUR 450/t weren’t the worst of it for buyers of ortho resins in March. The increases averaged only EUR 250/t, but the outlier EUR 700/t shot over the top. Even large accounts had to pay more if they wanted to secure supply. Starting material styrene’s steep upward climb, plus the numerous bottlenecks in Europe and in the US, also did nothing to improve the market’s mood, nor did the hikes for phthalic acid anhydride.
Styrene’s renewed rise will pull resins notations upward in April. Even before the month started, several producers had announced hikes of EUR 300/t to EUR 500/t, and for the most part managed to get these through, even if converters were ordering increasingly judiciously.
With the strong turbulence along the global supply chain, reinforced by the temporary blockage of the Suez Canal, supply of Asian imports in Europe was tight. Back in January, one member of PIE’s advisory panel predicted that the tightness could lead to not-insignificant price increases. Long-term contracts adequately protected buyers through the end of the first quarter, but at the beginning of March some suppliers began ignoring the contracts. Hefty hikes were the result. The sole exception were high-end chopped strand mats from European production.
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 March 2021: Prices trending higher / Significant premiums after increases in virgin material prices / Demand picks up noticeably / Recyclers planning further increases
The upward trend in recyclate prices that started at the beginning of the year spread to other materials in March 2021. After months of horizontal movement, prices for rPP and rHDPE also turned upwards in the end. Additionally, rPS took a short break from premiums charged in the previous month, so only prices for rLDPE injection moulding grades at the bottom of the PIE price range remain at the level of the second half of 2020.
The main reasons for the widespread premiums were higher purchasing costs, shortages of virgin materials and low-priced imports, and the increasing substitution of primary materials. Recyclers were able to use the resulting increase in demand to make up for some of the margin losses they had suffered.
However, with a continuing hunger for margin restitution and further increasing purchase costs, recyclers are already planning further price increases for April 2021. Their claims are supported by the high demand, which is fuelled by additional bottlenecks in the availability of virgin material, at least in the case of polyolefins.
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 March 2021: Notations increase significantly / Polymers, additives and reinforcing materials contribute to price rise / Further hikes expected in April
The considerable increases in the primary sector have also pushed up prices of the secondary materials very significantly. In the last few weeks, suppliers have barely been able to meet the demand. Overall, the market situation was rather confusing. Despite the slight slowdown in car production towards the end of the month, there was little sign of any lapse in ordering activity.
Because of the price increases on the primary market, scrap and base materials have become constantly more expensive for recyclers. This was evident especially with unreinforced base material, which was almost impossible to obtain. On top of this were bottlenecks for additives and colorants, with the surge in prices being further fuelled by the shortage of glass fibres. In the meantime, delivery times have lengthened to at least six to seven weeks.
The increase in the notations for ABS recyclate and recycled PC/ABS blends was naturally immense. On the primary market, the prices of both blend components climbed enormously, and the cost of base material exploded. Although the Netherlands-based styrene plant in Maasvlakte is now up and running, it is apparently due to be switched off again shortly for maintenance work. For this reason, availability – at least for ABS – will not significantly improve.
In April, it is safe to assume that prices of all recyclates covered in this report will continue to experience heavy increases. Demand is unlikely to slow down despite the occasional announcements of reductions in car production. Especially as the consumer-related areas are showing few signs of weakness.
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!
