Price Reports May 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 May 2023: Downward trend for quotations continues / Most grades witness oversupply and simultaneously weak demand / Apparently seasonal upswing nothing but a mirage

PE: With the unexpected reduction of EUR 10/t in the C2 contract at the beginning of the month, the plunge experienced recently by polyethylene prices gained further momentum. The supply bottlenecks with specialities reported in April largely disappeared in May. In fact, the markets tended towards a surplus – or were already oversupplied. This was primarily due to the fact that the quantities ordered by converters were just under a third below expectations. Demand thus remained very weak again in the second quarter, despite it being the peak season. Even the stable hygiene sector saw reductions in demand. The slump in consumption and the uncertainty on the part of consumers depressed demand. Prolonged plant closures combined with short-time working and changes in shift work (for example from three shifts to two) have long been a reality in the industry. The fact that the C2 price for June was fixed down EUR 80/t is likely to accelerate this downward spiral. No improvement is in sight. Some converters could well bring their company holidays forward and send them off earlier than usual.

PP: In May, the EUR 15/t fall in the C3 reference and overall weak demand reduced polypropylene prices to their lowest level since February 2021. Quotations for compounds also weakened but were still higher than at the end of 2022. Demand suffered from the weakness of all customer industries ranging from the food to the consumer and automotive sectors. Added pressure came from less production time due to the many holidays and gap days in May and converters only covering their immediate needs while they anticipated additional price cuts. Buyers adhered to a famous stock market adage: never catch a falling knife. This could be a good metaphor for June as well with forecasts point to an even steeper fall following the EUR 80/t drop in the C3 reference. As demand in the run-up to the summer holidays can be expected to decline further, and producers are already sitting on rather full inventories, price cuts for polymer could exceed the rebates for the monomer. Triple-digit decreases appear probable.

PVC: The downward trend with PVC prices continued in May, and on a much greater scale than had been intimated by the small drop of EUR 10/t in the C2 reference. The European market was plentifully supplied, so producers were forced to cut their prices in some cases by triple-digit amounts. Not least, it was the continuing oversupply and the still-weak demand that led to this situation and to the build-up of producers’ stocks. Demand from the construction industry – the largest customer segment – was particularly low. There was no sign whatsoever of the usual high season. On the contrary, converters report genuine “price battles” for the few orders. Not much is likely to change with the market situation in June, particularly as the holiday season will start in Europe at the end of the month. Consequently, the C2 reference (down EUR 80/t) could serve as the initial orientation in price negotiations. Converters, however, are not expected to be content as usual with receiving half the price reduction, but are likely to insist on the full amount. Further triple-digit price reductions are also possible.

Styrenics: The styrenics market remained relatively unimpressed by the EUR 55/t increase of the styrene reference in May 2023. Producers managed to fully pass on the SM change only in very few cases, and these were mostly monomer-linked purchase commitments for polystyrene. Otherwise, however, lower premiums or rollovers were agreed for PS, and in anticipation of foreseeable discounts in June, there were also slight price reductions here and there, especially in distribution. As for EPS, some suppliers continued to roll over prices at the April level right at the beginning of the month, while others initially tried to drive prices upwards, with varying degrees of success. In the second half of May, when declining SM spot prices foreshadowed a sharp drop in the styrene reference in June, the general price level slid further down. The bottom line for this month: rollover and slight discounts predominated. Meanwhile, ABS prices oscillated around the previous month’s level. Some agreements, especially for extrusion materials, priced in the increased composite costs, while others paid tribute to low demand and amounted to slight discounts. June is expected to bring a more uniform price trend. This is because the styrene reference slid down a whopping EUR 127/t while demand is remaining lukewarm at best. Against this backdrop, triple-digit discounts are likely to be in store, at least in some cases.

PET: Hopes of a lively start to the season for the European PET market were washed away, quite literally, in May 2023. The water masses that flooded large parts of Europe well into the month prompted a further deterioration in consumer mood – which had already been severely dampened by inflation and other critical developments – also in the beverage sector. At the same time, the Covid flare-up in China and the ongoing weakness in North America caused feedstock prices to plummet worldwide. Towards the end of the month, the European PX reference was also concluded with a dramatic drop of EUR 105/t. In such a situation, where production had already been curtailed for a lengthy period of time, European producers had virtually no other choice but to reduce their prices in a bid to counter buyers’ hesitation and, at the same time, prevent a major switch to imports. The price reductions increased from week to week with a number of buyers even benefitting from triple-digit price drops towards the end of the month. While demand is expected to pick up again in June, this will be at a far more hesitant pace than before. Even if the weather takes a turn for the better, inflation will scarcely permit people to hold barbecues with the corresponding beverage consumption, and football is also taking its summer break this year. At the same time, further price drops are expected for PX and prices in Asia are nosediving. At least moderate reductions are thus likely once again.

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 2023: Imports and weak demand put pressure on prices again / Some compounding plants face shutdowns / Half-year talks show further substantial reductions

Although the benzene contract rose in May by EUR 89/t, producers were unable to benefit from this. Poor demand plus aggressively priced imports led to a further fall in prices. The biggest reductions were seen with the high-priced PA 6.6.

The reason for this development is the still-weak demand in combination with cheap imports of nearly all types. A trend turnaround is not in sight, although there was at least a slight improvement in car production. Despite the continued cutbacks in European polymer production, there was always sufficient material available, and in many cases the markets were even long because of the influx of imports. In compounding, there was also talk of shutting down some extrusion plants.

In view of the cost pressure for converters, half-year talks began early. There appears to be sufficient scope for reductions, a situation that is helped by the benzene contract, which was fixed at the beginning of June with a reduction of EUR 110/t. In any case, initial reports point towards substantial concessions by producers.

One new aspect – but so far only for PC – is the offers from producers to raise buyers’ annual bonuses in order to create an incentive to increase volumes and reduce the pressure on 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!

 Polyurethane feedstocks May 2023: Downward trend for isocyanates continues at slower pace / Polyols show signs of respite / Recovery in demand sluggish

Weak demand across all application areas was the main argument of buyers in price negotiations. In many cases, producers had to be prepared to make concessions in order to be able to sell any volume at all.

The automotive sector ordered slightly more material than recently, but the construction and comfort sectors struggled to keep their demand stable. Momentum pointing to improvement was largely absent. Supply was secure despite a force majeure and further disruptions in European production. Imports from Asia and the US made for a long market.

The slight recovery in demand should continue in the coming weeks. Imports, however, are expected to become noticeably more expensive. Overall, this means that, in most cases, there will only be slight price reductions. TDI, however, will probably decline more strongly.

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 2023: Resin prices still under pressure / Drop in styrene to accelerate downward trend / Plunge in assembled roving

As expected, firmer styrene costs could not stop the fall of resin prices. Continued weak demand and declines for other starting materials dictated conditions. Converters used the many May holidays to curb output, and this pushed offtake to a new low.

More projects were postponed in all customer segments. Only the automotive sector saw occasional signs of life. As before, converters restricted purchases of resin or glass fibre products to their immediate needs.

The steep EUR 127/t fall in the June styrene contract more than erased the recent upward trend. At mid-term price discussions, which started early this year, converters will undoubtedly insist on additional concessions.

Glass fibre products for the most part showed little change in June, and no variations are expected from mid-term price talks. Direct roving gave up more ground, with soft demand from main customers in construction and wind energy possibly serving as the determining factor.

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 2023: Price trends show disparities / Competition from off-spec virgin and imported material grows / June offers signs of hope, but not for all materials

The market for standard recyclates developed inconsistently in May as weak demand and low-priced off-spec virgin material sent some recyclate prices tumbling. On the other hand, some grades experienced demand that has already returned to normal levels, which was also reflected in prices. Lastly came a couple rollovers.

All in all, inflation and continued consumer restraint appear to be significantly reducing demand. The construction sector in particular remains weak, while something like a glimmer of hope is slowly emerging for the automotive sector.

This picture is unlikely to change significantly in June. The worst seems to be over in many places, and some processors can even again table the idea of building stocks. But uncertainties have not yet been fundamentally dispelled, so a bad feeling remains.

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 2023: Demand stabilises amid major price cuts / Queries to convertors surge, orders fail to follow suit / Downswing not over yet

For converters, the period of slow-moving business is continuing. Although there were occasional signs of demand picking up in Europe – for example, in car production, E&E components and white goods – the mostly small orders were short-term and largely unpredictable. This put a brake on any potential measures to build stocks. At the same time, cheap imports consistently added pressure to engineering recyclate prices in Western Europe.

Polyamides in particular were corrected downwards because markets are long. For PA 6.6, the situation was exacerbated by frequent substitution with lower-priced PA 6 materials. Buyers of larger volumes were able to negotiate reductions of up to EUR 350/t here. The same applied to glass fibre-reinforced materials.

Many converters are receiving significantly more inquiries for June, but they are not yet – as originally hoped – turning into actual orders. Nevertheless, demand seems to be further stabilising.

It is, however, unlikely that it will be possible to halt the downward price trend in the coming weeks. The uncertainty is simply too great and, for many materials, the market is long. Because recyclers feel they have almost reached their pain threshold, they are unlikely to be prepared to make further major concessions. To a lesser extent, however, there could be some movement.

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!