Price Reports May 2021
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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! |
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Articles: May 2021 |
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Standards Thermoplastics |
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Standard thermoplastics May 2021: Indication of plateau / First decreases possible in some cases / Feedstock costs again a factor / Bottlenecks likely to keep upward trend for PVC and ABS in place
PE: In May, the triple-digit increases that producers were demanding at the beginning of the month despite the minimal EUR 5/t increase in the cost of C2 went through only with LDPE and EVA. In the case of LLDPE and HDPE, on the other hand, the upward trend slowed down significantly. Although material was still short, demand fell considerably in view of the already-high price level. With the arrival of imports in Europe expected fairly soon, producers also showed greater flexibility. In June, prices are expected to go up again because ethylene also rose by a further EUR 30/t. On the other hand, the upticks for most types should again be more strongly oriented to the level of the cost increase, and, unlike in the previous months, there can be no further talk of triple-digit rises. Only EVA could once again see a rise of this magnitude. Generally speaking, the PE market should have reached a price plateau in June that will be very difficult to maintain in the long term due to the arrival of imports. In Q3, prices could again turn downwards and move away from their currently dizzy heights.
PP: In May, PP notations moved higher for the sixth straight month, reflecting once again the tight market situation. The EUR 10/t rise in the C3 reference did not play any role in the fresh hikes of EUR 50-80/t for standard polypropylene. Anyway, the monomer index has not been a major factor in pricing for some time. The price rally does seem to have become less dynamic. In the end, producers were unable to push through the triple-digit hikes they envisaged at the beginning of May. This was simply because the new price records led many converters to curb orders. Some even cancelled orders altogether. For this group of players, polymer prices are just too high, especially in view of the fact that downstream customers are pushing back against paying ever more for their products. Compounders with indexed contracts who tried to charge their customers more to recoup losses from the higher prices they themselves were paying had no success in May. As June began, demand was weakening, so that the potential for PP producers to further pad their margins appears to be more or less exhausted. On the cost side, C3 recorded an increase of EUR 40/t in June.
PVC: A whole year has passed: in May 2021, PVC prices climbed for the twelfth month in succession. As earlier, the driving force was the tight supply situation. The size of the rises again had absolutely nothing to do with the proportionate cost increases for C2. However, most of the hikes in May – unlike in the previous two months – were no longer of triple-digit magnitude. Converters were already hoping that the declining dynamic could signal an imminent trend turnaround. But then, shortly before the end of the month, the market was hit by another report of force majeure, and it remains to be seen how the industry reacts to this. Should the supply bottlenecks decline slightly through the restart of other production plants and increasing imports, the high price level would soften a little further in June. Also with the compounds, the increases would then be smaller despite the supply bottlenecks with various additive components. The development of raw material prices – C3 rose EUR 30/t in June – has been incidental for months now.
Styrenics: Everything comes to an end, even the extreme boom in styrenics. After seven months of sometimes unprecedented premiums and record highs, prices are expected to ease in June 2021. The only reason for this is the sharp decline in the styrene reference (down EUR 401/t) as there has been no improvement in the tight market situation and volumes remain scarce. This is particularly true for the ABS market, which has been undersupplied for a long time, but EPS is increasingly moving in the same direction. The peak notations reached for all styrenics in May are making it more and more difficult for processors to price material costs into their own finished goods. Resistance from downstream market tiers is growing, and the liquidity of many processors is already strained. The ongoing very high price level was also the reason why many suppliers limited margin improvements on top of the cost transfer in May. However, in the case of ABS – and in individual cases also PS and EPS – some producers still insisted on slight margin improvements with an eye towards the material bottlenecks.
PET: The steep surge in PET prices that has been ongoing since January 2021 lost steam in May and in some cases even came to a halt. The production situation gradually improved and the PTA bottlenecks eased. At the same time, the first batches of imports were sighted on the Mediterranean Sea, aiming to take advantage of the high price level in Europe. Meanwhile, the anticipated revival in demand was, quite literally, washed out. The unusually cool and wet weather for May quashed all hopes of a seasonable boost from the beverage market. Consequently, the record high prices at the top of the range have since been capped, while producers were just about able to confine prices for large-to-medium volumes to a rollover, referring to the rising feedstock costs. The nightmare seems to be over. That, at least, is the hope of many buyers. The normalisation should progress on all fronts, with the result that air should now start escaping from the inflated price bubble. Reductions seem fairly certain, and their size will presumably depend on further developments. Should it remain as cool and wet in June as it was last month, the price cuts will probably be larger rather than smaller. On the other hand, a seasonal boost from the beverage market could perhaps help limit the price cuts.
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 2021: Prices generally continue to rise irrespective of the drop in feedstock costs / Occasional signs of a plateau / High prices and weakness in automotive industry slow down business
Despite the reduction in the cost of benzene feedstock, which was already foreseeable at the end of May, engineering thermoplastics rose yet again last month. Depending on the type and the individual supply situation, some producers were asking for remarkable increases of up to EUR 800/t, but were unable to implement this on a broad front. Plastic prices have since reached such a high level that demand has dropped off considerably. Furthermore, chip shortage is having a major impact on car production – the main driving force on this market.
These factors resulted in a slight easing of the situation for producers, which means that delivery times should shorten a little, fairly soon. On the other hand, this will be nowhere near enough to begin stock-building measures. A major role in the latest price explosion – where the only exception was POM, for which something close to a rollover was reported – was played by the lack of backward integration of European producers compared with the global competitors. The need to buy expensive ABS, for example, lifted the price of PC/ABS materials enormously again.
In June, producers are likely to be confronted with tougher resistance from converters, helped by the reduced demand from the automotive industry. The E&E and construction sectors ordered normally. Although benzene fell significantly in May, the bottleneck that exists for example with the polycarbonate intermediate bisphenol A will continue. Polyamides are also still suffering from the stoppages of feedstock lines. In this respect, the fall in the cost of benzene will only have a limited influence.
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 2021: Most prices still rising / TDI upswing may have peaked / Polyols extremely tight / US orders continue to drain supply / Building applications boom, automotive weakens
With the exception of TDI, notations for all polyurethane feedstocks notched still higher in May. The tightness of polyols, and also MDI, prevented any other scenario. The absence of polyols curbed the uptake of other materials.
Volumes available for allocation declined further, on average by 65%-70%. At least four European plants were facing problems. Availability in the US was considerably more restricted than in Europe. The restart of the benzene plant in Rotterdam after a long maintenance turnaround could ease the shortage in the medium term. MDI exports to the US should continue, however, as many producers there are still dealing with the effects of winter storms. For pure MDI, declining automotive demand and a potentially not-so-steep rise in the benzene contract could lead price rises to level off.
With supply of polyols insufficient, buyers didn’t need more TDI. For this reason, the delayed restart of the Ludwigshafen plant didn’t make them nervous, and it offered the chance to talk about prices, even if initially only the high end of the range. In June, the flexible foam isocyanate should trend sideways, while the price wave for MDI and polyols will most likely continue to roll unbroken.
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 2021: Resins still upwardly mobile / High prices curb demand sharply / Converters order bare minimum / Some glass fibre products see steep hikes
Short and tight starting materials drove ortho resin notations even higher in May. In view of the price increases the market has had to absorb recently, this was bad enough. The worst of it is the lasting damage done to customer relations by those suppliers who adopt a “pay or don’t play” attitude. In particular small and medium-sized buyers no longer trust them. A palpable shortage of imports, along with supply bottlenecks for starting materials and higher value products such as vinyl ester resins affected pricing, although bottlenecks eased somewhat toward the end of the month. Order activity was subdued across all customer segments.
The styrene contract was fixed clearly downward, but this has not been the price driver for several weeks now. Producers of phthalic and maleic acid anhydride reported numerous supply bottlenecks. Competition for propylene glycol, which is used also to produce solvents and cosmetics, drove notations so high that it hardly seems possible that they could come down any time soon. Resin prices thus could keep pointing upward until the beginning of the third quarter before levelling off.
Notations for glass fibre products pointed relatively steeply upward, in particular due to rising logistics costs. As most contracts here are negotiated quarterly, the market will be spared drastic price increases in June. For the third quarter, however, at least two European producers have already announced hikes of nearly 10%. The market for assembled roving was tight in May, as roving was being used to substitute short glass fibre, which itself was extremely tight.
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 2021: Prices continue strong rise / Serious virgin material bottlenecks boost all recyclate prices / Market environment offers scope for further premiums
The price boom and supply shortages in the virgin material market continued to sharply drive up the notations of all recyclate grades in May 2021. In the search for alternatives to primary materials, processors continued to turn to recyclates, thus fuelling demand. However, many volume calls, especially from new customers (regular customers were supplied with priority), could not be fully satisfied, as production scrap was usually only available in insufficient volumes – and if so, only at sharply increased purchasing costs.
This market situation is likely to remain largely unchanged over the next few weeks. The shortage of virgin material will continue, driving virgin prices further up and fuelling an increase of production scrap notations as a side effect. Together with the continued good demand for materials, this is bound to lead to further hikes for recyclates.
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 2021: Further massive increases dominate the picture / Base material seldom available / Strong demand from all areas / Converters becoming increasingly thin-skinned
Some of the comments during the survey on the PIE price panel speak for themselves: “It’s a fiasco, a catastrophe, everyone’s screaming out for material.” According to many converters, the month of May was going to be the worst month of the year, and after that, there would hopefully be at least a slight easing of the situation. The first part of that did indeed prove to be right, but the second part is probably wishful thinking, because the drastic shortage of material is unlikely to improve even on the secondary market, because of the ongoing forces majeures with engineering compounds. For this reason, further price increases are on the cards, even though the high general price level is now starting to slow things down significantly.
A majority of converters and recycling companies now do not anticipate any real easing of the tension until 2022. In view of delivery times, which have often risen to more than six months, this is also likely to be the case.
Imports are very rare indeed, although in China there is at least evidence of a sideways movement at an equally high price level. From the US, on the other hand, there are no encouraging signs whatsoever as producers are in many cases still battling with the consequences of the cold winter. Leakages in pipelines and tanks are constantly leading to a collapse of the fragile supply chains, and forces majeures are more or less a day-to-day occurrence with most engineering polymers.
Consequently, recyclers were often sold out, driving the thin-skinned converters up in arms. Reasonable suppliers of secondary material passed on the increases only with the expensive base material, but others see the opportunity for quick money. While there were reports of some PA 6 and POM copolymer on the market – especially black and unreinforced – polyamides, polycarbonates and ABS were virtually unobtainable, either as base material or as ready-to-use recyclate. The majority of the companies are now no longer taking on new customers, although greater efforts are being made at substitution.
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!
