Price Reports May 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!

Articles: May 2015
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics May 2015: Polyolefin notations continue to soar / New records keep being set / PVC uptrend gathering steam / PS holds firm at a high level / PET climbing / June expected to see additional increases

PE: The reservoir of superlatives used to describe the current PE situation is gradually running out. In May 2015, prices of all grades sold in Europe rose to heights not seen since PIE first started reporting them in the early 1980s. The picture is dominated by extreme shortages and even super high prices fail to attract any imports. The market remains drastically undersupplied. The previous interruptions to petrochemical production plants in northwest Europe, which appeared to be easing early in the month, were followed by major outages at several key facilities in southern Europe, shattering any hopes for recovery.

There is no turning back, and in June notations will continue to advance toward the historic level of EUR 2,000/t. Although European price levels are highly attractive – in part thanks to the euro's stabilisation – there are hardly any imports. It is thus quite likely that key Middle Eastern producers like Petro Rabigh are also suffering from widespread production problems, as suggested by various reports. There is little else one can do at the moment than to hope that the dark clouds hanging over the market will dissipate soon.

PP: As was the case in April, the cost of propylene did not play a major role when it came to prices for standard PP grades in May. The C3 contract added EUR 75/t but, due to the market’s extreme tightness, the increase in standard grades was twice that. The timid glimmer of hope that the supply situation would improve was quenched by the almost uninterrupted series of new force majeure declarations at crackers – this time in southern Europe. Nailing down sufficient supplies became increasingly problematic.

In the meantime, compounders’ margins have come under substantial pressure. Due to the many indexed contracts, the PP engineering grades last month again saw increases below the monomer rise. Those compounders who did not stock up early in the year, when prices were lower, found themselves economically up a creek without a paddle. In May, notations for standard grades were often higher than those for the cheapest compounds. Needless to say, this type of situation cannot continue for long.

The problem will literally compound itself in June, when further price rises are expected. With certainty, PP prices will hit historic highs. At present there are no indications that supply will lengthen, and even converters who judiciously filled inventories to the brim in January will be forced to buy. Or, better said, would do so if there was anything to buy. The market’s problems are reaching catastrophic dimensions.

PVC: Availability of PVC worsened in May, as processors found it extremely difficult to obtain material. Following a string of force majeure announcements in the second half of the month, the more recent past appeared blissful even. A lack of input material is threatening to take PVC lines out of operation temporarily, in a repeat of the scenario reported for the polyolefin front in both March and April. These developments set the stage for the near triple-digit hike in S-PVC base material. Prices of both blends and the related E-PVC also rose substantially.

There are no signs yet of any improvement in production. The outages at the most significant crackers – including in Lavera – are expected to last at least until late June, and Wesseling could even be down until September. It is unlikely that imports will offer any relief – in many cases quality issues in fact make any substitution impossible. Meanwhile, June’s ethylene contract rose by EUR 60/t, setting the stage for renewed hikes, of up to triple digits, for S-PVC.

PS: The tightness in the SM market drove styrenics prices up further in May 2015. However, most suppliers were only able to pass on the renewed EUR 20/t increase in the monthly reference contract in transactions settled at the beginning of the month. As time wore on, the gains continued to erode and some buyers even managed to obtain a rollover or slight decreases. They were helped by an improvement in the supply situation, brought about by May’s numerous bank holidays and bridge days.

The picture on the ABS front was entirely different, as demand continued to exceed supply, with import volumes extremely sparse. Those European suppliers whose volumes were on allocation were thus able to pull up low-lying prices. In the final tally, the rises tended to mirror the cost increase, reaching roughly EUR 35/t. The current situation is not expected to change much in June. Tight supply has driven up the monthly SM contract by another EUR 20/t, even though benzene retreated by EUR 111/t. This means styrenics prices will probably remain high and could even rise further. The trend reversal, which processors are so desperately hoping for, will only come about once the SM supply situation eases.

PET: Although suppliers of the mostly small- and medium-sized PET orders reported by PIE managed to lift notations in May, the hikes fell short of the cost rise. Most transactions had already been settled when the surprisingly steep hike in the monthly MEG contract was announced, which lifted the PET cost mix by about EUR 95/t. As a result, the price of bulk orders, which are often tied to feedstock developments, rose above average and started to approach the PIE range once again. The market trend remained tight, with both import activity and output rather muted. At the same time, recyclate notations were still playing catch-up with the rises that occurred in the virgin market for the last few weeks and months.

All in all, the current situation means PET prices will once again take their cue from cost developments in June. Coupled with a firmer euro, weakening prices in Asia could result in an import revival. Still, in the last week of May reports emerged about an FM in the UK, which would keep availability tight. Suppliers, for their part, will try to make up for the margin losses they suffered in May. Against this backdrop, it is quite likely that notations will rise, at least 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!

 

Engineering Thermoplastics May 2015: Benzene-dependent materials continue to rise / Otherwise stability prevails / PMMA sees minor corrections / Benzene uptrend reverses suddenly / C3 increase continues to have an effect

In May, notations for the two benzene-driven products, PC and PA 6, continued to rise as the increases in both April and May’s price for the aromatic continued to reverberate. Commodity-related ABS and PP compounds also rose again. By contrast, the price of PA 6.6, PBT and POM remained largely stable. PMMA notations were corrected slightly downward following the over-inflated price level seen during the recent period of MMA shortage.

The dramatic situation in the standard segment has started to impact availability of PP compounds, where the first signs of a shortage are starting to appear. In addition, independent compounders’ margins are increasingly coming under pressure. Standard notations have already reached the level of the more basic compounds. There are also reports of bottlenecks for basic PA 6 polymers. Aside from that, the other grades covered in this report are not expected to see any significant problems.

June’s benzene contract performed a sudden turnaround, falling by a massive EUR 111/t. This is bad news for the campaigns being launched ahead of the upcoming quarterly agreements, especially for suppliers of PC and PA 6, since it robs them of an important argument in favour of hikes. The steady rises in the C3 chain, on the other hand, are pressuring PMMA. Aside from the occasional scuffle, the situation for all other materials is relatively calm.

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 May 2015: Little of producer cost rise passed on / MDI and TDI largely unchanged / Polyols slightly higher / Weak demand in holiday-rich month / Steep rises seen for June

The short working month of May saw weak demand for PU feedstocks in Europe, and notations for MDI and TDI notations remained mostly unchanged. It appears that the considerable rise in the price of benzene in April and May and the slightly less substantial increase in the benzene contract could not be passed down the chain. Long supply and somewhat weaker demand firmed buyers' resolve not to pay any more than necessary. The minimal price increases of EUR 10-30/t spotted could be chalked up to demand for speciality grades rather than to a broad-based upswing in order activity.

The many public holidays that peppered the month in some European countries reduced output and put a noticeable damper on demand from many customer industries. By contrast, polyols producers succeeded in making price gains, even though buyers here and there successfully forced a rollover. Increases in the cost of starting materials ethylene and propylene left wiggle room at the top. As notations for a number of upstream products are still on their way up, June is likely to see producers pass their cost increases successfully down the chain. In any case, demand is sure to be substantially higher than in the short month of May.

.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 May 2015: Resins slightly higher / Despite producers' hike plans, only minimal rise likely in June / Feedstocks drive / Glass fibre largely unchanged

The last vestiges of the feedstock upswing left a slight imprint on the ortho resins market in May. On average, notations added EUR 20/t, mostly at the lower end of the PIE range. Demand from converters was very lively despite the many public holidays, but most products were in sufficient supply and could be had at short notice. Glass fibre prices remained unchanged. Solely chopped strand mats saw a widening of the range.

In June, resins prices are expected to make slight headway, even though the respective rises in the styrene monomer and propylene contracts of EUR 20/t and EUR 40/t provide little justification for hikes. Producers can still dream, though. At least two of the largest US suppliers have announced increases for Europe ranging from EUR 80-100/t. Movements for the two other principal feedstocks, phthalic acid anhydride and maleic acid anhydride, are likely to provide a boost. While the June contract for the former had not yet been fixed at press time, the force majeure at Atmosa in Austria, which is still in effect, will likely result in supply limitations. The maleic acid anhydride contract was fixed EUR 30/t higher. Despite outages in the European upstream, major delivery delays are not to be expected.

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 May 2015: Again increases across the board / Primary price hikes begin to affect secondary market / Feedstock scarcer and more costly / Lively demand / Upward pressure on the horizon

In the period from mid-April to mid-May 2015, European standard recyclate listings continued to react on the ongoing upwards price trend of the primary markets. However, the increases often remained within astonishingly moderate limits. Due to rising costs, especially for high quality production scrap, this also meant further severe cuts into the recycler's margins, hitting the SMEs hard.

The current tightness on some primary markets also began to afflict the availability of production scrap, which in some cases was further limited by increased buying activity from China. At the same time, demand was driven by seasonal effects – agriculture, construction – and, in many segments, by resigned primary market buyers.

More dramatic developments in the standard recyclate world must be expected for the next few weeks. The primary markets’ first signs of relaxation will probably take a while to make themselves felt and only then will the secondary markets follow suit. All in all, the current situation and the lack of any hint of a change point towards more price increases until the middle of June.

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 May 2015: Mixed picture / rABS, rPC and rPP compounds tend upwards / Minor decreases with rPA / Wave of price hikes gradually impacting base material rates / Upturn likely to continue

While there were minor downward corrections at the lower end of the range for some PA regrind materials between mid-April and mid-May, the standard grades of rABS, rPC and rPP compounds followed in the footsteps of the higher grades, which had already followed the lead of the primary market entourage in the previous weeks. As there was a general tendency to a bottleneck with the base material, prices inevitably moved up. Not only are the increased primary costs making themselves noticed, so too is the slight downturn in the demand for engineering polymer materials generally.

Despite the normal demand situation, the next few weeks will probably see further price increases for many engineering recyclate materials. The wave of primary rises has not yet passed through the entire chain, so that catch-up effects are more or less inevitable. Furthermore, petrochemical and primary polymer prices are still tending 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!