Price Reports May 2020

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 2020
Standards Thermoplastics  Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate  Engineering Recyclate

 

 

  Standard thermoplastics May 2020: Polyethylene witnesses controlled output / Picture dominated by increases in costs of feedstocks / Polymer trends mostly following

PE: How well producers’ efforts to control supply are working is illustrated by their response to the EUR 100/t fall in the cost of C2 at the start of May. They passed on a maximum of half the C2 reduction to the polymer chain. With the film grades, these efforts are meeting with success. Unscheduled outages added to the developments, and European producers’ output was then limited. With C4 film grades, Europe was considered secondary in distribution plans. With C6 grades, imports were plentiful, leading to somewhat larger reductions. Buyers of injection moulding, blow moulding and pipe materials usually managed to obtain bigger price cuts. Orders for standard containers were largely normal, but containers for such products as lubricants were below expectations. Film products for protective packaging for transport and the agricultural sector were slightly below normal, while films for the food and hygiene sectors were stable. Following the turnaround with C2 (up EUR 60/t), price hikes are likely to dominate in June. Some producers’ announcements of hikes of up to EUR 75-100/t are unlikely to go through.

 

PP: On the back of a fresh decline in the C3 reference, this time by EUR 80/t, Western European PP prices pointed downward in May 2020. Producers sometimes kept part of the cost relief for themselves. For injection moulding grades such as PP homopolymer, however, they were not successful. Demand from the automotive sector in particular was still under the impact of the coronavirus crisis, and supply continued abundant, even if capacity cuts and maintenance turnarounds reduced output. June is unlikely to see an end to the current oversupply, especially as some plants will be emerging from maintenance turnarounds. Notations nevertheless will not continue in the downtrend of the past two months. As the monthly C3 contract turned around and moved up again, PP should be following suit.

 

PVC: Through the reduction in the cost of ethylene, which proportionately affects PVC, prices came under renewed pressure. The base material became cheaper and, following on from this, the compounds, too. In the latter case, the smaller cost reductions of some of the additive components lowered the size of the price cuts. Producers’ attempts to hang on to part of the reductions disappeared into thin air during the course of the month. In June, prices are expected to turn upwards again following the rise in the C2 reference. Demand picked up again as the coronavirus-related restrictions began to ease but has still not reached its normal level. Producers and compounders are adjusting their output accordingly.

 

Styrenics: After the SM reference fell EUR 13/t, Western European prices continued to decline in May, although to a much lesser extent than in March and April. As discounts greatly varied in previous months, there were many price cuts at the top of the price range above and beyond the reductions granted on the grounds of the cost decrease to bring outliers back into the fold. For ABS, the price reductions were generally higher due to the latest drop in butadiene prices. 

However, the downtrend is likely coming to an end – the SM reference turned upward in June (up EUR 64/t), and styrenics prices will follow this. With a close look at spot market prices, some processors already speculated on the trend reversal, placing additional orders in May. These pre-purchases stimulated demand, which was otherwise still strongly influenced by the coronavirus crisis. Both producers and processors now hope that the gradual relaxation of restrictions will further boost demand.

 

PET: The Covid-19 crisis shaped the European PET market in May. Demand was below expectations as the turbulence continued, and the stronger demand in the last few weeks seemed more about buying for security than anything else. Producers limited the price cuts for the monthly transactions for small to medium volumes covered here to less than the falls in the feedstock references. Although four-digit notations have largely disappeared from the market, the range of prices is still larger than normal, depending on the trading conditions. Regrind prices are consistently higher than those of virgin material. Around 90% plant utilisation rates were reported from European production. Although imported material was available, business was subdued. Demand from the hygiene segment and thermoforming sheet continued good, but business in the beverage market was disappointing. With feedstocks, there are hopes that prices will bottom out in June. Exploding numbers of Covid-19 cases from consumption heavyweights such as Brazil and India could mean that import prices will become more aggressive. The recent margin increases gained by European producers give them a little more scope to perhaps match the potentially large reduction in import 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 thermoplastics May 2020: Significant price cuts with only a few exceptions / Demand from auto production still poor / Producers' output control begins to have effect

Most engineering thermoplastics covered by this report came under pressure in May, but to a varying extent. Western European prices of the less specified and natural polyamide grades dropped to a larger extent, primarily because these responded to the price reductions of the corresponding base resins. The decreases with the PA 6 grades were slightly more marked than with PA 6.6. Reinforced grades, flame-retardant types and other modified grades rolled over. Due to the influences of the additives, discussions about prices rarely took place.

PBT and POM remained stable, due firstly to producers’ measures to control supply and secondly to the lower import activity. The latest fashion – which is currently spilling over from the standard polymers – is the offer of potential end-of-year bonuses in order to avoid granting additional price concessions.

On the demand side, although most car production lines were up and running again, even the large component suppliers say they are working at most at a fifth of usual capacity. China ordered somewhat more, but still nowhere near former levels. In Europe, business will presumably remain slow over the next few weeks. The only rays of light came from the E&E and construction sectors, although here there are also signs of a slowdown.

In June, most engineering polymer prices should continue trending down. Reductions are likely even with PBT, which has remained stable until now. Polycarbonate is likely to top the list with a significant decline. Exceptions are PMMA, where producers are particularly keen to push up prices – although this will presumably not take effect until July – and POM, where producers’ measures to control supply are taking effect. Minor price increases are possible here, depending on the specification and application.

 

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 2020: Steep plunge / Producer inventories full / Demand for the most part very weak / Downswing could bottom out in June

In view of the wide range of rebates agreed, identifying the actual average price paid by buyers is difficult. For polymeric MDI, rebates ranged from EUR 50/t to twice that. TDI fell by up to EUR 150/t. It is clear, however, that producers had to concede substantially more in May than in April. The base level of the price agreements was in many cases not extremely wide, as demand was simply too weak.

Many plants were run at sharply reduced rates, though the picture varied widely across Europe. The construction industry in Western Europe was a major pillar of demand, but other segments, in particular automotive, saw hardly any demand. In Scandinavia and Central and Eastern Europe, order volume was stronger. With demand very subdued, most isocyanate production capacities were run at a sharply reduced utilisation rate.

That there is a slight ray of hope on a murky horizon is about the most positive thing there is to say about this market. The downtrend is likely to continue, though at a slower pace. The scope of price movements in June will continue to be wide, not only because of differences in demand in individual European markets but also because customer markets are not developing at the same pace. The industry association Europur (Brussels / Belgium; www.europur.com), for example, forecasts for May only marginal improvement against April, although many companies in many countries plan to restart plants. Inventories, however, are brimming over everywhere, which could offer buyers a certain amount of leverage for negotiations.

 

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 2020: Ortho resins fall again sharply / Producers aggressively cut prices but bottom in sight / Some glass fibre products in oversupply

The downward correction in ortho resins notations in May was nearly as pronounced as in April. The deterioration of the styrene reference price was almost completely factored in. At the same time, the feedstock practically hit bottom, with a decline of only EUR 13/t. Most players described the market as “very quiet.” Producers pulled out all stops to unload material, come what may. As a result, some hefty rebates were spotted. There was no problem meeting demand. Among glass fibre products, both types of chopped strand mats came under pressure and gave way slightly.

Demand levels were rather uneven in May. Most small- and medium-sized buyers are rarely focused only on a single customer market. Orders from the automotive sector, including utility vehicles, remained at a very low level, but many converters at least were able to keep production going to supply customers in other sectors.

It would seem impossible for notations to fall any farther, unless demand begins to recover slightly, and producers thus have no need to continue wooing customers with rebates. The turnaround in the SM reference, which added EUR 64/t in June, will keep these in check. A rollover is the most likely scenario this month.

Despite the restart of automotive production, order volume is likely to remain stuck at a low level for some time to come. Large OEMs are operating at around a fifth of capacity. What’s more, the building and infrastructure sectors, which have remained robust for the most part, are also starting to see dents in demand.

 

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 2020: Downtrend continues / Competition from cheaper virgin materials / Covid-19-related slump in demand / Margins are eroding / Further decreases expected in June

Recyclers are having trouble keeping their heads above water. They are having to navigate eroding margins due to competition from the collapsed virgin material prices and declining ordering due to customers’ coronavirus-related production cutbacks.

Against this backdrop, recyclers have cut prices across the board in May. Recycled LDPE and rPET were hit particularly hard, while the large price gap between rPP and rPS and their corresponding virgin materials protected them from more severe discounts. Many recyclers have also reduced their output. With the volume outflow lowered to a trickle, however, this hardly helps. They still have high inventories.

The situation remains critical, especially as more price pressure is expected in June. Once margins have evaporated, one or the other recycler might have to plunder their nest eggs. “Even before the coronavirus, we were not living a life of luxury, but now it’s a matter of mere survival,” a market player told PIE.

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 2020: Reductions of as much as EUR 300/t / Large-scale cancelling of orders / Most recycling line production cut back or shut down

While most engineering recyclate covered by this report showed only moderate reductions in April, recyclers were forced this month to grant much larger concessions to stimulate sales. At the top of the list were the PC/ABS blends and glass fibre-reinforced polycarbonate grades, both of which depend heavily on car production and are in surplus across the world. Here, the price reductions sometimes amounted to as much as EUR 300/t.

The situation in the recycling segment is anything but good at present as companies here are under enormous pressure from three sides at once – plunging sales, a lack of base material and low virgin material prices. Those PIE spoke to noted short-term order cancellations on a large scale. The automotive industry is virtually non-existent as a buyer. Products such as garden furniture, coffee machines and other small electrical devices are still doing quite well during the coronavirus crisis. Compounding lines are either being run at reduced output or have been switched off altogether, but in view of the very weak demand, stocks are still high.

Whereas rABS already felt the impact of the hefty reductions in the styrene contract back in April, the price cuts in May have not been quite so substantial. With recycled polyamide, completely the opposite happened – the fall in base resin prices and the lack of support from the monthly contracts have exerted significantly more pressure. Black grades with more of a focus on car production fell by a much larger amount than the natural grades. A similar picture was seen with recycled polypropylene compounds.

In the next few weeks, little change in the situation is expected. As things stand, production lines are not likely to be up and running as normal before the end of June. There is not only a shortage of base material, but also a lack of buyers. Despite the partial easing of coronavirus restrictions and some supply chain recovery, recyclate orders are coming in slowly. At the same time, the feedstock sector is, with few exceptions, still in free fall. This is putting continued pressure on the base resins and the entire value chain right through to recycling. Another reduction in recyclate prices is therefore probable, but not by as much as in the previous month.

 

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!