Price Reports November 2022

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 November 2022: Mixed trend for quotations / Reduced output in Europe and weak demand from most sectors remain / Price cuts across the board, no revival in demand expected in December

PE: The present trend on the European PE market is that there is no real trend. The EUR 35/t increase in the cost of C2 led to price increases of varying sizes for downstream products. The high-density segment escaped this trend and ended up with a rollover across the board. The picture was also mixed on the demand side, with some converters reporting severely delayed call-offs and others boasting a high level of capacity utilisation. Producers of agricultural film and sheet are looking very positively to the future, whereas the EVA sector is taking a battering. This is also expected to continue in December with the C2 contract price falling EUR 25/t. Basically, it can be said that high-price customer segments such as pharmaceutical and food packaging were moving at a more solid and increased level than the areas in which products can be replaced by finished goods from Asia. For imports, cheap material arriving from Asia is putting the European market under considerable pressure.

PP: The market is now better balanced. In November 2022, prices for PP film and high-end injection moulding grades generally hugged the line of the C3 reference contract, which rose EUR 20/t. For basic injection moulding grades, this was not the case due to stiff competition from imports. Here, a rollover was the most producers could manage. For compounds, the picture was completely different. Buyers were able to make the case that energy prices have fallen, which led to triple-digit rebates in some cases. Converters are becoming increasingly confident that demand for their products will pick up in the new year. No revival is to be expected in December, however. In the short production month, when players will be bent on reducing inventories, demand will remain soft. As the year’s last C3 contract was fixed EUR 30/t lower, rebates are to be expected, with compounders likely to make additional concessions.

PVC: The downward trend in PVC prices continued on into November. When determining the price for base material, the change in the C2 reference had become nothing more than a note in the margin several months ago, and hence, the ethylene increase (up EUR 35/t) was not noticeable in November either. Instead, it was weak demand and competition from low-cost imports that had the biggest impact. This resulted in clear price reductions once again. Even three-digit cuts were reported by way of initial technical adjustments to next year’s price assessment basis. Negotiations on future contract agreements are proving exceedingly complex in overall terms. Not only is the determination of the starting prices difficult in many places but a number of converters are generally reluctant to enter into specific contract agreements, preferring instead to try their luck on the spot markets. Producers are correspondingly annoyed. Prices for compounding essentially followed those of the base material, especially since the cost of titanium dioxide, stabilisers, plasticisers, and other additives was trending downward. One exception here was E-PVC pastes where demand was so low that the decreases surpassed the considerable price drops of the base material. No notable increase in demand for PVC is to be expected in the short month of December. This is particularly because many converters are further reducing their warehouse stocks – with an eye on liquidity and the year-end balance sheet – and are only ordering what is absolutely necessary. Further reductions are thus on the cards.

Styrenics: The trend of the past months was extended in November, when styrenics prices declined once more. This came despite the fact that the styrene reference trended minimally firmer by EUR 4/t. The main reasons for the renewed downtrend in styrenics were declining energy costs, which producers factored into sales prices, and weak demand across all grades. In the case of ABS, there was also competition from low-priced imports, so that there were often significant corrections – especially in distribution. Demand is suffering not only from the economic slowdown, but also from the processors’ seasonal reluctance to buy. For balance sheet reasons, many of them are reducing inventories before the turn of the year, and this year, the habit is particularly pronounced given the dwindling liquidity of companies. This will not change in December. In the short production month, reducing inventories remains a top priority for many players. This is particularly true because there are signs of further price reductions after the reference contract for the important precursor styrene fell EUR 132/t in December. Most industry representatives will soon be glad to be over and done with this difficult year of 2022. And they are eagerly looking ahead to the start of 2023, when restocking will be a hot topic.

PET: The situation on the European PET market can again only be described as miserable in November 2022. Producer efforts to stabilise the situation were undermined by continued very weak demand at a time of disproportionately high costs for raw materials and energy and the availability of aggressively priced imports. European suppliers thus continued to sit on their full warehouses despite considerably curtailed production. Prices fell increasingly clearly in the course of the month. Nothing that could alleviate this situation is apparent for December. On the contrary, the PX contract reference has still not been settled, so European producers are thus forced to conduct their planning in completely uncertain terrain. At the same time, imports are very much present. As far as demand is concerned, the traditionally weak month of December will doubtless be even weaker this time round. A further drop in prices seems inevitable.

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 2022: Lower flat-rate energy fees, weak demand put pressure on prices / Only PMMA escapes trend / More pressure expected in December

In November, prices of nearly all engineering thermoplastics continued the downward trend of the previous months on the Western European market. The main reasons were the reduction in the flat-rate energy fees, the pressure on prices through cheap imports, and the generally weak demand. Added to this came the efforts made by converters to reduce their stocks. Even the EUR 42/t rise in the cost of benzene affecting some upstream materials was unable to counter this adverse situation.

The only material that was able to escape the downward trend was PMMA. In fact, producers were even able to push through higher prices there because the European market uses predominantly speciality products, and the pressure caused by the imports of standard material thus more or less vanished.

In December, too, PMMA is likely to remain the only material where quotations will buck the general trend. This is because, with the other engineering thermoplastics, the weak demand will continue to choke the prices, and the shortness of the Christmas month of December will do the rest. Furthermore, the benzene contract for the last month of the year fell by EUR 196/t.

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 2022: End of strong price hikes for TDI / Producers grant heavy discounts partially on low demand / Generally more reductions in weeks ahead

Although contract prices for benzene rose slightly, weak demand and increased imports from Asia led to a decline in prices for MDI. In exchange for the firm commitment to actually purchase contracted amounts for the year, producers were also prepared to grant significantly higher discounts. This mainly affected markets in Eastern Europe, where there were price reductions between EUR 100/t and EUR 120/t across the board.

For TDI, volume allocations for European material decreased significantly, and additionally, the market received more imports from Asia. As a result, an almost balanced overall market situation was observed.

All of the purchasing sectors are currently switching into Christmas mode and only ordering the essentials. The construction sector in particular, which has been stable most recently, is hitting the brakes. The drop in consumption of white goods in consumer markets has already been visible for several weeks.

European producers will partially make further production cuts to balance the market. At the same time, they do not want to start the new year with too much stock. Imports from Asia, however, essentially compensate for this. Additional, but probably only slight, reductions are likely to be observed in December.

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 2022: Price “atrocities” likely done with / First rebates for resin / Styrene contract lends push / Glass fibre trend may be reversing, too

The nearly stable November styrene contract offered little scope for concessions on ortho resins. Despite the soft demand, prices came down only in a few cases. Many transactions were sealed at a rollover. Taking this as a sign that market movement had become more moderate, players issued a collective sigh of relief – after all the “energy and raw material surcharge atrocities”, as one PIE panel member put it.

Despite the below-average demand, resin prices gave way only a little here and there. In anticipation of the traditionally sluggish trading in December, both producers and distributors attempted to right the ship from their perspective. This generally meant forgoing an inventory build-up. Some end-consumers did the same. In particular, orders for sheet and pipe grade were depressed. Buyers in export markets were not willing to pay the higher prices European converters were asking and believe they need.

With resin imports streaming into the market, European prices could give up EUR 30-50% in December, depending on the styrene content. In some cases, rebates of up to EUR 80/t are expected. Many companies hope to start anew in 2023, at improved conditions.

For glass fibre-reinforced materials, which mostly remained unchanged in November, rebates of at least 10-20%, depending on the product, are expected, for the beginning of 2023. The potential extent of the downward price trend should be visible from mid-December.

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 2022: Prices continue to fall / Recyclers respond to slack demand with production cutbacks / No recovery in sight for December

Almost all grades declined, albeit significantly less than in the past few months. Demand is extremely low, forcing more and more recycling companies in Europe to cut back on production. For several months now, they have been trying to shift their high energy costs onto the market, with limited success. Some have at least managed to keep prices stable.

Material is broadly available. In addition, primary material is increasingly being used in Eastern Europe and, for a number of grades, inexpensive virgin material from Asia, the Middle East and – in the case of PET – from Turkey and Egypt are also entering the market.

For December, little change for the better is expected for all materials and grades. Demand from the automotive sector did flare up slightly in November, but that turned out to be a flash in the pan. Construction and consumer goods are tepid and ailing. The prospect of a Christmas business that picks up or even booms currently seems rather unlikely. It is clear that weak demand will put further pressure on prices. There will be no further production cutbacks, however – how would that even be possible?

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 2022: Base material very scarce / Increased demand from automotive industry turns out to be a flash in the pan / "Just close your eyes and hope for the best"

Not much has changed compared to October. Demand for virgin material in the European market has dropped, as a result of which sources for recyclate are on the decline. In line with this, demand from converters and end-customers has also fallen. Negotiations resulted in small reductions and sometimes also a rollover.

More and more European recyclers are finding it impossible to pass on their high costs and are being forced to switch off production lines. Recyclate has become so expensive that converters are simply unable to afford it. The year 2022 is seen as having run its course for most market players, many of which will in December simply “close their eyes and hope for the best.” This attitude, in combination with the constantly weakening demand, is bound to lead to further price reductions.

It is still completely unclear what will happen in December. Companies are putting great hope in the energy price cap. For many of them who have until now bought their energy on the spot market, this could come too late.

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!