Price Reports November 2016

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:  Novemberr 2016

Standards Thermoplastics Engineering Thermoplastics Polyurethane Feedstocks GRP/Composites

  Standard Thermoplastics November 2016: Muted demand prevents producers from passing on costs / Little momentum expected for December / SM drives styrenics up / Other polymers likely to see declines

PE: There was nothing that could be done to help European PE producers in November. They were occasionally successful at the beginning of the month in pushing through minor rises, but were unable to pass on the full increase in the ethylene reference. As the month progressed, buyers seemed to lose any inclination to do business and, at the same time, notations along the oil chain declined. At the end, producers were happy if they were able to win a rollover.

LLDPE continued to suffer from an influx of imports and prices fell across the board. The glut predicted in recent years really does look as if it is going to happen. The pipe sector has been suffering from poor sales for several months, and this is likely to become even worse in December.

The ethylene reference price was fixed later than usual. The OPEC conference in Vienna at the end of November aroused strong emotions when a deal was hinted to limit oil production. The price cuts that had seemed almost inevitable were modified, at the end of the day there was a decrease.

After all, the situation on the polymer market clearly points to a fall in prices in December. The cost development will certainly have a softening effect on the dynamics but not on the basic direction.

PP: In relatively quiet November trading, PP producers had to bite the bullet and accept a further deterioration of margins. In only a few cases were they able to pass on the higher cost of C3. Prices for most polymer grades lost momentum and ended the month in a rollover. The steady decline in spot prices for propylene during November did its part to solidify the trend.

Price movements for compounds lagged behind the slight rise in the price of standard PP. In an interesting development, the new system of indexing compounds to standard PP worked to the buyer’s advantage this month.

December will surely see prices decline across the entire C3 chain. Despite OPEC’s curbing oil output, the propylene reference contract will react to the downward movement on the spot market and lose ground. In the short working month, PP will also follow the trend.

PVC: European PVC producers were unable to achieve their aim of obtaining a small margin improvement in November. Despite some problems on the production side, the heavy fall in demand in the off-season provided a natural limit to producers' calls for a hike. By the end of the month, the price increases were smaller than the proportionate rise in the cost of ethylene. This was also the case with PVC paste. With the blends, on the other hand, increases in the cost of modifiers and plasticisers meant that blend prices rose slightly more than the matrix material.

In December, the ethylene reference will probably fall, and there is no doubt that customers will want to be part of it. In view of the expected sluggish business in the final month of the year, their prospects are quite good.

Styrenics: In November 2016, styrenics prices have ended the general downward trend of the previous months. The SM reference contract’s increase by EUR 40/t caused prices to trend up again, even if not always to the full extent of the cost increase. Especially PS prices were marked by the good availability of distribution volumes.

There was a respectable level of demand. Purchasers soon lost their initial reluctance to buy since SM spot prices rose steadily throughout the month, pointing at significant price increases in the next few weeks.

It now looks as if they were right: The SM reference contract for December has made a giant leap of EUR 170/t. This major cost increase should propel styrenics prices up by quite a bit. At least for PS and EPS, three-digit premiums are not out of the question. On the flip side, this will likely strangle demand at the end of the year, in a month that already is shortened by Christmas holidays and in which many processors keep their stocks low for balancing reasons. Considering this, it remains to see whether the entire cost increase can be transferred to polymer prices.

PET: The increasing strength of the dollar following the US presidential elections provided European PET producers with a little more breathing space in November. The stranglehold of cheap imports declined because, on the one hand, prices on the Asian markets picked up and, on the other, the falling value of the euro made exports to Europe less attractive. Because of this, European producers were at least able to recoup the minor cost increases for PX and MEG despite the continuing sluggish demand. Occasionally, they even managed to win a margin increase, albeit very small.

Stabilisation was also in evidence on the secondary market in November after the falling primary notations had put pressure on the recycling business in the previous month.

Against the backdrop of a very well-balanced market situation, most market players expect December to present a calm and stable picture in both the primary and secondary segments.

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 November 2016: Minor movement for traditional materials / Only PMMA trending up / Buyers and producers agree on truce until year's end / Suppliers preparing for a January offensive

After all efforts launched by engineering thermoplastics producers to improve their margins had failed in October, November 2016 turned out to be a typical interim month, offering them time to lick their wounds and come up with new strategies. In the end, the price of most of the traditional engineering thermoplastics rolled over. The only exception was PMMA, where European demand is slowly but surely being confronted by a general structural undersupply. While small application fields have been growing for months, producers have not shown any willingness to invest. The commodity-related ABS and PP compounds have followed the rise in their respective value chains.

For most materials, December will turn out to be a calm month. The truce is of a temporary nature, however, as producers are already preparing their price hike campaigns for January and Q1 2017. Polyamide suppliers have already issued their calls, and it is only a matter of time before other players will follow suit. In any case, all materials related to the central aromatic benzene as well as to styrene have already been caught in the upward spiral that began in the final month of the year.

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 November 2016: Prices for tight TDI and polymeric MDI soar / Exports could prompt more firming / Polyols mostly stable / Demand strong for the season

Outages at several plants of a large European MDI producer in November had more serious repercussions than initially expected. This led notations for polymeric MDI to rise rather substantially up to mid-month although PIE's talks with market players show a rather differentiated picture. Buyers reported hikes ranging from EUR 50/t up to as much as EUR 200/t. On average, the PIE range moved upward by EUR 85/t, with speciality and higher end grades making more substantial gains. Relatively low inventory levels in Europe and an arbitrage window to Asia should lead notations to continue firming, especially as the outages now seem likely to last until mid-December. In contrast to polymeric MDI, the pure grade saw only minor price increases.

The hikes for polymeric MDI were almost as substantial as the EUR 90/t rise for TDI, which has been tight for months. This was due for the most part to increasing exports to Asia, where European producers could obtain much higher prices than at home. TDI notations in this part of the world soared to EUR 3,800-4,200/t on average. The plant outages in Europe meanwhile have multiplied to an extent that makes the previously more psychological bottlenecks physically palpable. Not all buyers have managed to secure the needed volumes.

With the toluene contract nudging only EUR 9/t higher, the feedstock situation did not have that much of an additional influence on the already tight market in November. Chinese producers had several plants in maintenance. This and the strong demand being seen there prompted more European producers to step up exports. Should Chinese demand ease off in the near future, the European market could begin to stabilise. A slight price increase in December looks likely, however.

Notations for both grades of polyols covered in this report remained mostly stable in November. Flexible grades showed slight upward momentum at the upper end of the range, but the rigid grades made only minimal gains.

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 November 2016: Resins prices remain unchanged / Styrene's surge not yet felt / Weak demand likely to deflect producers' hike plans / Glass fibre stable

Small tremors from the October styrene decline were still exerting some downward pressure, but PIE's November range for medium reactive ortho resins remained unchanged. Some material could be had for EUR 5/t – or even EUR 10/t – less than a month earlier. The EUR 40/t price surge for primary feedstock styrene had only a minimal braking effect, as demand was not as weak as had been expected. That being said, order activity did appear to be winding down somewhat.

At the end of the month the market grew nervous that SM prices could rise even higher, and the increase that followed proved the fears were justified. Although for resins buyers, the shock has not yet hit home, within the past two months, this feedstock's price has added EUR 210/t – after having plunged by almost the same margin earlier. The other starting materials saw little movement, with the exception of phthalic acid anhydride (PA). The force majeure at a German producer led to supply bottlenecks but did not drive the resins price as sharply upward as expected.

Due to subdued demand, plans by several major resins producers to hike prices by up to EUR 150/t will have little chance of succeeding, especially as the styrene component accounts for less than EUR 70/t. Against this backdrop, PIE expects a moderate firming of EUR 30-40/t. The big wave of price increases will hit the market sometime in Q1 2017 – provided the SM price at least remains stable.

Notations for glass fibre products remained unchanged in November, and no notable movement is expected in December either. Up to now, no producer has announced a price increase – at least not officially. Nevertheless, some suppliers exhibiting at the "Composites Europe" show hinted that hikes could be on the horizon for next year, without providing further details.

 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 November 2016: Notations still under pressure / Oversupply results in slight erosion / Demand remains comparatively weak / Additional declines likely

he price of all recyclate grades covered in this report declined moderately in November 2016. In many instances, the downtrend was the result of the general oversupply, with the slide cushioned somewhat by rising virgin material prices.

Demand tended to fall short of expectations, and there is no sign of any change to the current situation in the coming weeks either. With many recyclate buyers keeping a watchful eye on their end-of-year stock levels, order activity will likely remain muted. This means prices could decline further before the end of 2016.

 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 November 2016: Notations mostly stable / Uptrend likely / With year-end approaching, demand takes another dip / Abundance of scrap material

Despite the at times significant rise in the price of virgin material, recyclate notations remained largely unchanged up until mid-November. As in the preceding month, demand was rather subdued and additionally dampened by the fast approaching end of the year. That notwithstanding, most recycling plants were operating normally. Availability of production scrap was also long. Looking ahead towards December, prices are expected to hold stable. It could easily take until January before primary market developments start impacting the secondary front.

The rise in the cost of styrene and butadiene, along with other developments, drove up the price of virgin ABS quite considerably, although the uptrend has not yet impacted recyclate notations. Following the erosion of the past few months, rPA 6 prices held stable – even though in view of the high feedstock and base material costs, virgin material producers have been trying relentlessly to lift virgin compounds notations.

One producer’s supply problems are exerting upward pressure on virgin PC prices. Against this backdrop, other players should find it easier to call for hikes of their own. If they manage to realise their calls, rPC suppliers will also gain more room for manoeuvre. The same could be true for the rise in the two components that make up rPC/ABS blends.

 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!