Price Reports November 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: November 2019
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

 

Standard Thermoplastics November 2019: Feedstocks determine the decreases in November / Attempts to improve margins unsuccessful / Stability at most is expected in December / Subdued demand will define the conditions

 

PE: In parallel with C2, Western European prices for all the PE grades covered by PIE’s report were down last month – by an average of EUR 30/t. A number of lower spot offers on the market had only a minor influence on the contract prices because many buyers want to take advantage of the end-of-year bonuses. An increased number of spot offers – especially for higher-grade metallocene types from the US – put significant pressure on LLD film prices. Although business trended toward normalisation, sales of most PE materials were lingering at the bottom end of producers’ expectations. There was weak demand due to uncertainty after the spate of criticisms of plastics and many new legal regulations. Demand for injection moulding grades was somewhat more robust. With HD blow moulding grades, the US-China trade war led to an influx of imports to Europe from North America. With the overall market tending longer, the EUR 10/t increase in the C2 reference price should ensure stability at most. A rollover is probable for most grades. One US producer is planning to switch off European LLD film capacities in order to at least take off some of the pressure. This is initially not likely to have any more than a minor effect. In the second half of December, producers could then begin slowing things down again as soon as converters stop ordering and begin their winter break. There could also be a considerable influx of LDPE film material from the US at the beginning of January 2020.

 

PP: For the most part, European polypropylene producers in November had little choice but to pay homage to the decline in the C3 reference contract and adjust PP selling prices to match. Due to the fact the demand was well below average, despite a slight improvement against October, even output reductions were not enough to keep the market in balance. It was a buyer’s market, and each was free to decide whom to buy from. In a similar market environment, the C3 price fall was passed seamlessly through to buyers of PP compounds. As converters’ inventories remain full, demand threatens to come to a screeching halt in December. Many converters, in particular those that directly or indirectly supply the automotive sector, may well end production after the second week of the month while at the same time extending their plant holidays beyond the end of 2019. OEMs, too, are likely to shut up shop for an extended period. The standstill in fact will affect the entire supply chain, including compounds, and polymer producers also will operate a low flame. But even with output levels short across the board, downward price pressure will continue.

 

PVC: In November, Europe’s PVC producers initially planned to keep the cost reduction in the ethylene component for themselves by agreeing a rollover, thus enabling them to improve their margins somewhat. Despite a relatively balanced market with demand running at the normal level, they ultimately failed to achieve this, however. All those involved thus agreed on the usual scenario of passing on 50% of the reduction in the ethylene reference. This then traversed the added value stages of the material chain as all other impulses remained too weak. The pro-rata ethylene costs rose EUR 5/t. However, the market is trending liquid, which should hamper a passing on of costs. Processors are generally planning very early and extended Christmas breaks, while suppliers are countering this with production cutbacks and export plans.

 

Styrenics: In Western Europe, styrenics prices continued to decline in November. These followed the renewed decrease of the SM reference. Producers of PS, EPS and ABS tried – mostly in vain – to retain part of the cost reduction, but their efforts to bolster emaciated margins failed due to the oversupply in all styrenics. The situation worsened in particular for PS injection moulding materials and EPS insulating materials, where some suppliers accepted discounts far in excess of the SM reduction in order to reduce their inventories. The basic trend will not change in the next few weeks, and the way towards further price reductions has been mapped out – the styrene reference declined by EUR 47/t in December and styrenics notations are sure to follow in view of the continuing weak demand. With an eye on the year-end balance, many processors are only buying essential volumes to keep their inventories as low as possible.

 

PET: Although the PX reference was slightly firmer at the end of October, the European PET market was not really concerned about pursuing cost discussions in November 2019. With demand remaining subdued, spot prices approached the EUR 800/t mark under the additional pressure of attractive import offers. Very high volumes are also to be found in this same range, further widening the gap with the small volumes subject to monthly contracts that are covered in the PIE reports, particularly since the reductions here tended to be more moderate. All in all, the PET market has evidently returned to the oversupply mode that has basically prevailed for many years before consolidation took hold in 2017 and, coupled with China’s ban on the import of PET waste in 2018, temporarily brought about an exceptional situation. Irrespective of what will presumably be a far from dynamic development in costs, further reductions are thus expected for December, particularly since demand remains very weak.

 

 

 

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 November 2019: Downward drift continues / Notations crumble, but not in one fell swoop / No interruption to market weakness / Price pressure expected to dominate in December

As expected, the downtrend on the Western European engineering thermoplastics market continued through November. Although the fall was in most cases perhaps not quite as large as had been anticipated, prices of nearly all types moved downwards. Many producers balked at incorporating the quarterly reductions in the monthly prices. Indeed, a number of smaller-scale distributors are still working from material purchased in previous quarters at correspondingly higher costs. The engineering polyester PBT experienced the largest reductions, because this is where the influence of imports was the most noticeable. Consequently, suppliers tried even harder to capture the few orders that were still up for grabs. With the commodity-related products, PP compounds rolled over, while ABS materials fell back slightly.

 

As far as production is concerned, all the indications are that the year will come to a halt very early. With most OEMs, suppliers also intend to take a longer Christmas and New Year break. Consequently, business is likely to more or less dry up. With the leading types of polycarbonate and polyamide, there could also still be some selling-off of stock material due to the stiff competition. This, in turn, would bring about further significant price cuts, whereas with the other “quieter” grades, prices are not likely to slip very much.

 

 

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 November 2019: Weak market pressures prices / Little change in sight for December

In line with the trend seen in other European polymer markets in November, polyurethanes were also affected by the overall economic weakness. Seasonal markets such as construction wound down as they usually do, while at the same time the crisis in the automotive industry increasingly left its mark on other industrial sectors. For this reason, the ongoing maintenance turnarounds did not make much of a dent in the supply of PU feedstocks.

 

The crash in the benzene contract over the past two months put downward pressure on derivatives as well as MDI. The same goes for TDI, which was hit even harder by the absence of automotive demand. In November, polyols followed the downward trend of the olefins sector.

 

Downward pressure on notations is likely to continue in December. While from the current perspective base products seem likely to hold their own, demand will weaken in the final month of 2019 as usual. This time, price deterioration should be more pronounced, as many converters have little choice but to start their year-end holidays earlier and return to work later.

 

 

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 November 2019: Resins surprisingly stable / Heftier rebates likely in December / Glass fibre prices on the shaky side

Despite the rather pronounced decline in the styrene reference since October, Western European ortho resins saw only minor rebates in November. There was a relatively clear fall for the other two starting materials, maleic anhydride and phthalic anhydride. Resins notations deteriorated mostly at the lower end of the PIE price range, with the upper end somewhat less affected. With demand continuing weak and a cumulative downswing of EUR 130/t for the styrene reference, resins prices can be expected to fall sharply in December. The Q4 contract for maleic anhydride was fixed around EUR 50/t below Q3, leading to additional downward pressure.

 

Demand developed slightly better in November than earlier but stagnated at a lower level than expected. Orders from the automotive sector were mostly limited to utility vehicles. However, even this stable market slowed down somewhat as the end of the year approached. Already trending long in November, the market is likely to lengthen further in December.

 

Among glass fibre products, high-end chopped strand mats from Asia were spotted in the European market and put pressure on the lower end of the range. The weak demand took its toll. Even small accounts profited from rebates, to some extent more than bulk buyers.

 

 

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 November 2019: Price erosion continues / Reductions granted across the board / Only rPET clearly rolls over / Demand remains weak / Further decreases expected before end of year

Standard recyclate prices in Western Europe trended further down in November. Pure polyethylene grades were under pressure from the unexpectedly significant decline in virgin material prices. This was complemented by the ongoing weak demand for almost all grades. Therefore, many suppliers could not avoid a build-up of inventories.

 

Unfortunately, no improvement is in sight for the next few weeks. There are simply no stimuli that could contribute to stabilising prices. Quite the contrary, as the year draws to a close, many processors are trying to reduce their inventories as much as possible for balance-sheet reasons. This will further limit order activity, and a price pressure on recyclates will continue. Several recyclers are considering stopping production around the turn of the year, which would be quite unusual.

 

 

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 November 2019: Notations unchanged with an uninspiring month / Demand picks up only slightly / Pressure from primary sector continues

In the last few weeks, longer-term price agreements generally had a supporting effect on the rates for recyclate in Western Europe and protected them from the price pressure in the primary sector. At the same time, business volume improved slightly compared with October. Higher-specified grades nevertheless felt the competitive pressure from virgin material.

 

Against this background, recyclate suppliers were able to prevent a further build-up of stocks. Both regrind and production scrap were readily available and usually also somewhat cheaper than in the previous month.

 

Over the coming days, the pressure from the primary sector will continue. It is highly likely that converters will want price cuts for grades that are subject to tougher competition. Regrinders intend to counter this by limiting supply, and some companies are also planning to halt production between Christmas and the New Year.

 

The fewer production days in December will dampen demand. Apart from that, many converters will – with an eye on the end-of-year balance sheet – do what they can to reduce stocks.

 

 

 

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!