Price Reports March 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 March 2023: Further price reduction on weak demand and overall good supply / End of energy surcharges in sight / Prices under pressure with fewer working days in April due to Easter break

PE: Only seldom were producers able to fully factor in the March increase of EUR 30/t in the cost of C2; in fact, they were only successful with the somewhat less readily available LLD materials. With all the other types covered by this report, they suffered margin losses despite gaining small increases. Both scheduled and unscheduled reductions in output continued to limit European supply. Nevertheless, because demand was also still weak, there was enough material around to fulfil the orders, even though imports were a bit rare. Only with some speciality types were there delivery delays. The hoped-for return to seasonally normal demand failed to materialise. Although the packaging industry and the building segment increased their ordering slightly, it remained below expectations, especially in the DACH region and in the Benelux states. The Polish market was also affected to a certain extent by this weakness. On the other hand, there were reports from larger markets further south, such as France, Italy, and Spain, that ordering activity was approaching its normal level. For April, some producers have announced the reduction or even the cancellation of energy surcharges. This, plus the EUR 40/t fall in the C2 reference, is likely to put prices under pressure everywhere. Only with the LLD-C4 materials and, to a lesser extent, also the C6 and C8 sister products, could there be a rollover. At least, however, the reductions are expected to be smaller. The reason is the declining availability due to the lack of imports. The prices of all other types covered by this report should, on the other hand, fall more significantly because the Easter break is expected to put an extra damper on demand.

PP: March began on an unspectacular note, with supply and demand balanced. European plants were still operating on a low flame, but output was sufficient to meet all contractual obligations. In contrast to expectations, import material, in particular from the Middle East, was not in plentiful. In mid-March, the naphtha contract was fixed nearly 10% lower, leading distributors to clear inventories and offer special deals in anticipation of price pressure in April. These moves did not meet with much resonance, however, as demand did not liven up over the course of the month. As expected, the C3 reference price for April came down by EUR 40/t. On top of this, producers have announced plans to reduce energy price surcharges or drop them altogether. In anticipation of either or both, selling prices will likely come under substantial pressure. Adding fuel to the fire, should the large PP plant in Poland actually start up this month, as long rumoured, and begin producing material on spec, supply would swell. And then, imports from the Middle and Far East have also been announced.

PVC: The brief flicker of life in February faded again in March, with the result that PVC and compound prices reversed course again and were fixed slightly lower. Converters were able to successfully fend off attempts by producers to factor in the proportionate costs – the C2 reference rose by EUR 30/t. Despite the ongoing production cutbacks in Europe, there was still sufficient material on the market to easily fulfill the contracts. Unlike in previous years, seasonal demand was not very strong in March. Although there were again more orders from the construction industry, purchased volumes were still well below the usual level. Even the first long production month this year was unable to change anything. With the ethylene contract down EUR 40/t, prices will be under pressure in April, and demand is not expected to revive much either. Converters are at present still lacking orders, and there will be fewer production days this month because of the Easter break. Only the building renovation sector offers a glimmer of hope. Nevertheless, prices are likely to fall further.

Styrenics: The styrene reference plummeted by EUR 113/t in March 2023 and styrenics followed suit, among other things because producers did not really have anything to counter the decline considering weak demand and abundant supply. Some producers tried to keep the decreases below the styrene cost reduction because of what they considered to be too meagre margins. They came closest to achieving higher margins with polystyrene, while EPS in some cases recorded discounts even beyond the SM decline. Even with ABS, the cuts were not always lower than the reduction in composite costs. Despite all this, it looks as if prices might have bottomed out for now: the styrene reference moved up again in April, albeit only slightly, and styrenics prices are also likely to follow the monomer reference in the Q2 opening month. This is doubly true since producers still see a need to catch up in terms of margins.

PET: The European PET market was very volatile in March. At the beginning of the month, buyers were sometimes able to snap up material with a discount of up to EUR 50/t. Initially, many customers held back in accordance with the maxim “never catch a falling knife”. But the situation changed after the first third of the month, when import prices moved considerably higher due to heavy increases in China and the rest of Asia. At the latest with the announcement of the European PX contract reference for March, which fell only marginally, European suppliers then tightened the screws. Especially the larger volumes at the lower end of the range saw small upticks, while the more readily available material at the upper end mostly changed hands at a rollover. Following a rather disappointing start to the season, demand looks set to pick up again in April. In PIE panel conversations, lively ordering activity was reported. Because imports are expected to remain expensive and, at the same time, the feedstock situation appears to be stable, European producers should be able to achieve at least moderate increases.

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 2023: Reduction of energy surcharges leads to some significant price cuts / Further reductions expected / Demand outlook makes converters hopeful

Last month, PMMA was the only material covered by this report that did not feature conversations about reducing or removing energy surcharges. With all the other engineering thermoplastics, the issue was very much on the agenda, and in some cases led to significant price reductions.

Apart from the debate about energy surcharges, the sometimes-long markets and the comparatively low-priced imports also played a role in the price agreements for March. Even some of the quarterly contracts were renegotiated. The benzene contract, which more or less rolled over (down EUR 1/t), was unable to exert any slowdown effect.

The European POM market was split in two: while the Northwest of the continent focused on reducing energy cost surcharges, Eastern Europe did not even consider the issue, concentrating exclusively on the purchase of Asian imports.

The order books for April are already somewhat better filled than the average for the first quarter – driven above all by the revival in the automotive sector. The upcoming Easter holidays and some company vacations are, however, likely to keep overall demand fairly quiet. Despite benzene being fixed at a weak rollover again, prices are likely to fall 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!

 Polyurethane feedstocks March 2023: Downtrend unbroken / Prices could soon bottom out / Demand slow to improve

What can barely be termed a rollover in the benzene contract, which was down just EUR 1/t, combined with aggressively priced imports and a long market to put pressure on isocyanate costs once more. Polyol quotations also fell.

For MDI, producers started the month with markups, but these could not be sustained and quickly became discounts. For TDI, conversely, the announced closure of a major German plant and a force majeure limited European supply. Even offsetting deliveries from Asian and North American subsidiaries could do little to change this. Additional imports from Asia covered many of the gaps.

The construction, comfort, and automotive sectors each contributed to improved demand. However, throughout Europe, normal levels have not yet been reached. On the bright side, orders should continue to increase slightly in the coming weeks. This, along with sufficiently cheap imports, is expected to put downward pressure on prices again, although not as noticeably as before. A rollover is conceivable in some areas.

Producer threats that can be read between the lines – that they will further throttle their plants – should have a strengthening effect. For TDI in particular, suppliers do not want to accept another downward move.

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 2023: Styrene's fall pressures resin prices / Some chopped strand mats in sharp decline / Notable improvement

Soft demand and the lower cost of principal feedstock styrene propelled resin prices farther downward. The rebates upstream trickled down faster than in February.

For the most part, the higher end of the range saw the biggest price drop, while at the lower end standard grades saw a strong rollover here and there. The hotly discussed energy surcharges, along with the weaker demand, accounted for a major part of the decline.

Spot buyers could benefit from considerably lower prices, but as there were fewer transactions, the effect was minimal. The Easter holidays probably won’t choke off the budding revival of demand, but could slow its recovery. In the second half of the month, order activity could gather renewed momentum and lead one player or the other to refill inventories.

In tandem with the influx of imports, the reduction of surcharges in the energy-intensive glass fibre industry pushed prices for standard chopped strand mats clearly downward. Roving prices remained largely stable.

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 2023: Prices remain under pressure amid weak demand / Only rPP and rPS increase slightly / April trending towards more price stability / Exception: accelerated downturn for rPET

Most recyclate prices trended further down in March 2023. Only rPP and rPS bucked this trend and recorded slight premiums. Unlike other recyclates, at least the demand for rPP has meanwhile returned to a more or less normal level.

Demand for some rLDPE grades will probably also approach this level in April while the order books for other grades, such as rLDPE natural film or rHDPE, is likely to fill only hesitantly at best. At least for rLDPE and rPS, the generally increasing demand should support prices to an extent that the pressure on prices decreases or even disappears. The downward momentum should also ease for rHDPE, because the price level has come so close to the costs that there simply is no further scope for significant discounts.

Yet, here is another exception, namely rPET: this recyclate’s downtrend is likely to pick up speed again in April. For one thing, processors still see the need to catch up in passing on decreased purchase costs. For another, fierce competition from low-cost recyclate and flake imports from Vietnam is creating additional pressure. Side note: it borders on the absurd that secondary materials are shipped halfway around the globe, totally dissolving their advantage in terms of carbon footprint.

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 2023: Ordering remains weak with in part triple-digit markdowns / Signs of noticeable improvement in demand / Banking crisis surrounding Credit Suisse causes uncertainty

A very mixed market presented itself in March. The ranges found in both demand and price reductions varied widely in some cases. What all types had in common, however, was the downward trend in quotations.

The majority of processors were already reporting at least a slight improvement in demand – especially from the automotive industry, but also from E&E. Demand only remained low for the still very expensive rPA 6.6 materials, as well as for some PC and POM recyclates. This also caused the sharpest reductions for some of the reported grades. It will take the orders for April and May to ensure a stronger increase in demand for recycled materials. In March, processors limited themselves to the most necessary quantities. Contracts were sufficiently fulfilled almost everywhere; there were only delays in delivery in a few cases. Here and there, inexpensive imports from East Asia improved supply.

The coming weeks will see more discounts, but they will not be as steep. Among other things, this is due to rising demand, but also to the fact that recycling companies can hardly afford further price cuts on a large scale. They will take a harder line in some areas in the second quarter.

There is some uncertainty due to the latest news from the banking world, which puts inflation and recession back in the spotlight. As a result, processors are acting cautiously despite the recently improved ordering situation. Things seem a little too good to be true, after purchases in January did not materialise to the expected extent under similar circumstances. Nevertheless, some panel members said the planned plant closures during the Easter holidays were already being abandoned.

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!