Price Reports May 2019

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: May 2019
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

Standard Thermoplastics May 2019: PE suppliers win margin gains / PP and PVC calmer / Weak demand impacts PET / June will likely be a quiet month / SM plummets and pushes styrenics downwards

PE: After a stabilisation phase in the previous months, European PE producers at last managed to push through an increase in their margins in May – something that in their view was urgently needed. In the vast majority of cases, the hikes were more than the increase in the ethylene reference for May. The rises were due mostly to shorter supply, which occurred when the scheduled stoppages for cracker maintenance were made worse by unscheduled outages at other sites. Demand picked up slightly and provided a natural cap on the price increases. These hikes generally turned out to be moderate. The ethylene reference for June rolled over from the previous month. This is also likely to be the reference point for large sections of the PE portfolio, because a gradual improvement in production is expected. The maintenance season is coming to an end, but there is still little stimulus from demand.

PP: That European PP producers announced only moderate hikes in May shows how sceptical many were about achieving more than minor marginal improvements. Still, the price gains made in most polymer supply agreements were somewhat greater than the producers’ cost increases. This was thanks largely to the shorter supply, which reflected maintenance turnarounds. Demand in the month’s first half got somewhat of a lift from price rises along the crude oil chain, but ordering dropped off noticeably in the second half. Weakness in the automotive sector continued to depress demand for compounds. The propylene reference contract for June rolled over. There was no impetus to buy from any market segment. Against this backdrop, notations for polymers in the C3 chain are likely to move sideways this month. For compounds, developments will depend on whether calls for structural corrections are heeded.

PVC: Contrary to what had seemed likely at the start of May, PVC producers moved away from their high price expectations as the month drew to a close. Deals concluded in the last few days of the month generally included the pro-rata ethylene reference or just a small rise, while at the start of the month a EUR 20/t increase was achieved on frequent occasions. This is due to the continuing trend towards slight oversupply. Despite the maintenance shutdowns and the absence of imports, European production is more than adequate to satisfy demand, which is not exactly brimming over. The current picture is unlikely to change much in June. Producers will continue to try and increase their margins. Unless any major changes come about in the market, however, they are set to meet with strong resistance again, especially since the price level as a whole remains high.

Styrenics: After the SM reference contract increased by EUR 32.50/t in May, styrenics prices likewise rose slightly again. However, the hikes mostly reached the extent of cost increase at the beginning of the month. Thereafter, many processors only ordered essential volumes in anticipation of falling prices in June, so that suppliers were more willing to make concessions to sell their products. This lessened the hikes in the second half of May. Even a couple of rollovers were agreed, but isolated special deals with anticipated price reductions clearly remained exceptions. June will now see significant declines across the board after the SM reference fell by EUR 143/t. Price reductions for polystyrene and EPS are likely to be in the three-digit range. This might also be the case for ABS, where the smaller drop in costs for butadiene (EUR 60/t) and probably also ACN (not yet fixed at press time) will probably cushion the downward slide. The significant price discounts will initially provide processors with a good opportunity to buy. In many cases, however, further order activity in the second half of June is likely to depend on price expectations for the coming month.

PET: May was disappointing for European PET suppliers. The weather remained cool and rainy for long periods, keeping down demand. At the same time, prices in the Asian polyester chains fell sharply, which made imports more attractive. Despite this, suppliers saw their margins increasingly coming under pressure and have so far managed to keep price reductions within reasonable limits. It should be noted that this is how things stand – so far. Given the attractive imports coupled with persistent slack demand, there is talk of the need for production cutbacks. In addition, the PX reference for May was fixed very late at EUR 87.50/t lower, which would point to struggles on the cost side. European production is increasingly bordering on the uneconomical. Unless a summer heatwave suddenly breaks out like in 2018, clear reductions can doubtless be expected in June.

 

 

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 May 2019: Price pressure continues / Producers have trouble keeping notations stable / Automotive slump remains key concern / More reductions probable

A quick glance at the statistics would suggest relative stability with European prices of engineering thermoplastics in May. However, the reductions for PC and PA 6 in the middle of the quarter are an initial clue that appearances can be deceptive. The slump in car production coupled with the never-ending uncertainties in global trading policy are putting constant pressure on notations. Only with enormous effort were producers able in many areas to carry prices over, mostly with the aid of the quarterly agreements signed two months ago, and sometimes also by simply dispensing with sales.

The commodity-related materials are also relatively calm. ABS responded to the rise in the styrene reference with moderate increases. With PP compounds, the renewed rise in the propylene reference was frequently ignored.

Even if producers are still doing all they can to keep prices stable, the prospects of success again in June are not overwhelming. It is more likely that ever more breaches will appear in the defence bulwark. The automotive business is also unlikely to pick up in early summer. With this in mind, even considerable price cuts are not unlikely, especially with the polyamides and other automotive materials.

 

 

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 May 2019: Isocyanate price movements uneven / Demand disappointing / Headwinds for MDI hikes / Little change likely in June

Price movements for polymeric MDI were rather uneven in May. Depending on order volume, application and region, notations varied widely. Most contracts were settled EUR 10-40/t higher, so that prices for the PU feedstock gained EUR 25/t on average. In view of the generous supply situation, some producers were asking for hikes of up to EUR 150/t, but were seldom able to push through what they were seeking and then only to a small extent. In most cases, gains were considerably more modest.

With demand pointing upward, notations are likely to firm. The median price on the Chinese market recently dropped to only slightly above EUR 2,000/t, which increasingly depressed offtake and lengthened availability in Europe.

Towards the end of the quarter, demand seems to be revving up further – especially from the building industry. Nevertheless, polymeric MDI producers will be hard pressed to make up the volume losses caused by customers switching to other materials during the high-price phase.

For TDI, the downward momentum bottomed out at EUR 20/t in May. Most transactions were settled between modest rebates and a rollover. Major corrections were rare. Against the backdrop of structural oversupply, the soft automotive market continued to depress demand, which disappointed most producers.

Due to macroeconomic factors, uncertainty is strong. Thus, price movements may be uneven, though they are most likely to decline further. The Asian market points in that direction.

 

 

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 May 2019: Resins upswing continues in May / SM's price drop in June will create massive pressure / Demand still mostly weak

Fuelled by rising prices for all key starting materials, notations for medium reactive ortho resins also saw fresh rises in May, adding EUR 30/t. The increases were most pronounced at the lower end of the range, with even large consumers affected. Flanking the increase in the styrene reference price, the quarterly contracts for phthalic anhydride and maleic anhydride added EUR 30-40/t. Glass fibre products saw no momentum. With a few exceptions, demand from the automotive and utility vehicles sectors was below expectations. Converters covered only their immediate requirements. Announcement of additional punitive duties, this time on products from Mexico, did not encourage buying, either. There were no supply restrictions for resins in May.

In view of the major downward price correction in the June contract for key starting material styrene, resins prices are likely to give way in the next few weeks. As demand remains relatively weak, the extent of the decline is as yet unclear. The higher prices for phthalic anhydride and maleic anhydride are unlikely to provide much of an impetus to buy.

 

 

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 May 2019: Increasing prices predominate / Only opaque grades and rPET remain in rollover / Demand driven by virgin materials and seasonal effects / Further hikes to also predominate in June

 Almost all standard recyclate prices trended upwards in May 2019. Both transparent LDPE film grades and rHIPS reacted to the hikes on virgin materials. Quality improvements through improved sorting have led to price increases for rHDPE, while rPP homo benefited from a seasonal increase in demand. Only rPET did not move in any significant way. Prices have been at record levels since the beginning of 2019, however.

Demand picked up noticeably in May. Both positive seasonal effects and the latest price hikes for virgin materials have increased the attractiveness of recyclate.

 

Notations for rPE, rPP and rPS should continue to witness their upward potential in the foreseeable future. In the case of rPET, however, decreasing virgin material prices are already suggesting that it will no longer be possible to maintain the current record prices.

 

 

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 May 2019: Secondary market quiet / Recycled PP compounds an exception / Demand improves slowly / Little change likely in June

 With the exception of rPP compounds, which followed the virgin counterpart upward, notations for recycled engineering polymer in Europe remained unchanged in May. In some cases this was due solely to the quarterly contracts. Adjusted for this effect, prices for rPOM and rPA 6.6, for example, probably would have declined. Even rising feedstock costs, in particular for styrene and aromatics, had no impact as the soft demand in the primary sector kept increases at bay.

The first half of May was largely without bank holidays, so that production stabilised at a normal level, and sufficient base material was thus available to recyclers. Recycled polymer is becoming more attractive to buyers. The automotive industry even revved its engine a bit in May, though on the whole this market remained soft. In June, the still sluggish demand will provide little scope for price increases in the secondary sector. Compounds will be an exception, as the upward momentum here shows no signs of stuttering.

 

 

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!