Price Reports November 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.

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Articles: November 2023
Standards Thermoplastics Engineering thermoplastics Polyurethane Feedstocks	Composites/GRP Standard Recyclate Engineering Recyclate

Standard thermoplastics November 2023: Decline in monomer costs puts polymer prices under pressure / Supply abundant, demand scarce / Year essentially over across all standard grades

PE: The reduction of EUR 45/t in the monomer contract put pressure on polymer prices in Western Europe. The fact that the supply situation improved again meant that the recent significant price increases turned round, and in many cases quotations fell by more than the monomer reduction. On top of that, converters were often able to obtain additional decreases for orders scheduled for delivery in December. Significant impulses from the customer industries were not to be expected anyway. For this reason, European converters were grateful if incoming orders remained at their previous month’s level. The first moves to increase stocks were also made under favourable conditions, at least for LDPE. The slump in Western European polymer prices is likely to continue after the latest fall in the cost of ethylene (down EUR 30/t). In view of the improved supply situation and the short production month, the decline could well be larger than the fall in the cost of the monomer. Ordering activity is set to receive an additional damper through the Christmas break announced by many companies. In the meantime, there are reports of annual negotiations being delayed in many instances due to several converters finding it difficult to come up with a forecast of the volumes they will need in the coming year. The ordering behaviour by the customer industries is still a “black box”. In addition, most converters expect the supply situation in Europe to remain good in the next few months, and therefore feel they can meet their needs from the spot markets, and thus be able to obtain a better margin from their business.

PP: The EUR 40/t drop in the November C3 reference contract set the pattern: on the back of this, polypropylene prices in Europe gave way and put paid to the short-lived upward momentum of the two preceding months. At first, producers tried to concede less than their price relief would warrant, but due to the soft demand enjoyed scant lasting success. Especially in the month’s second half, demand softened further, leading for the most part to more substantial concessions. With some certainty, the improved supply situation on the European market played a role. Existing bottlenecks were dissolved, due in major part to aggressively priced imports from the US and the Middle East. Another contributing factor was that demand was stuck at a low level, as many converters were loath to take on additional inventory so close to the end of-the-year accounting time. At the same time, some buyers are planning longer than usual breaks over the holidays. Year-end negotiations for 2024 supply contracts are proceeding sluggishly. As no one knows for sure how the market will develop, many converters are reluctant to seal deals. It is also possible that there will be fewer contracts agreed than usual, as many players may want to buy more spot material than usual.

PVC: The brief upward trend of the previous two months was reversed again and European PVC prices fell in November. While offers at the start of the month included a pro-rata cost reduction for the C2 reference (down EUR 45/t), producers had to grant greater decreases in the course of the month if they wanted to sell volumes. Output from European production plants is running at an almost historically low level. Producers are looking at the profitability of their plants even more closely than usual, including in the light of the very weak level of demand. They then take further action, as was recently demonstrated when a precedent was set in Western Europe with the shutdown of an upstream plant. As far as the short-term outlook for December is concerned, prices can be expected to fall further. The ethylene contract was fixed EUR 30/t lower at EUR 1,185/t. Demand, which is already weak, will be further dampened by the reduced number of production days due to the upcoming Christmas break. The anti-dumping proceedings initiated at the end of November could give European producers a boost in the annual contract negotiations at least. With punitive duties on imports from the US and Egypt, some see no need for significant price concessions.

Styrenics: November broke the three-month rise in styrenics as Western European prices turned lower. A significant decline in the styrene reference (down EUR 149/t) provoked triple-digit discounts for polystyrene and EPS, while the price declines for ABS grades were somewhat cushioned by increases in quotations for other cost components (butadiene up EUR 15/t, ACN up EUR 27/t). Across the board, European producers tried to retain a share of the cost reductions – especially as previous increases were often not passed on in full, which stressed already shaken margins. Some suppliers maintained this stance until the end, while others passed on the reductions to boost sales, or in some cases even granted more generous discounts. Ordering remained low. Many processors have their sights set on the Christmas holiday period and the upcoming turn of the year, and due to balance sheet considerations they want to keep stocks as low as possible. This trend will probably also dominate purchasing in December, the shortness of which as a production month is putting further pressure on the volumes called, exacerbated by the fact that quite a few processors are planning longer manufacturing shutdowns during the holidays than usual due to weak demand. Against this backdrop, any further decline in prices is almost a side note. Styrenics prices are set to fall further after the styrene reference for December slumped again by triple digits (down EUR 116/t). The other composite costs for ABS also eased (butadiene down EUR 10/t, ACN down EUR 28/t). “The market is all over for this year”, one participant told PIE.

PET: Crisis is the new normal – an apt summary of the situation in the European PET market in November 2023. The sales misery that seems to have lasted almost forever has eroded PET production in Europe, which is the most expensive in the world. And the first chunks have now fallen off of the cliff into the sea. At the start of the month, initial slight increases still came about on account of the uncertainty triggered by the volatility at JBF in Belgium coupled with the provisional punitive tariffs imposed on Chinese imports by the EU. It rapidly became clear, however, that apart from other producers in the EU, a sufficient number of supplier countries outside of Europe are also more than willing and able to make up the shortfall of Chinese material – and naturally at attractive prices too. This meant that the absence of JBF did not really affect the market. As of the second third of the month, the pressure of the lower PX reference was then felt and prices declined noticeably. Overall, however, the reductions remained moderate, since the severity of the situation left European producers with little room to manoeuvre. As in the previous month, the PX reference for November has still not been fixed at the end of the month, a typical feature of these uncertain and even crisis-like times. The market remains weak. In Belgium, JBF is now also likely to shut down its second line. Despite this, supply remains more than adequate. Imports are still available and demand is at rock bottom. In December, all sides would undoubtedly be happy with a quiet month.

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 2023: Producers try desperately but unsuccessfully to keep their prices stable / Weak demand, abundant imports create long market / Converters face uncertain future

The benzene contract for November went down by EUR 148/t. Producers tried nevertheless to keep prices as stable as possible. However, because of the weak demand and the influx of imports, they succeeded only to a limited extent. European production output remained low, but the supply situation was significantly improved by imports. The lack of sales meant that producers, traders and importers all had full shelves in their stores. PA automotive was hit particularly hard, with the decline running into triple digits. Cheap imports from Asia and the weak demand were the main reasons for the slump.

In December, too, falling prices are on the cards. The question nevertheless remains about special offers in the short final month of the year, as many producers will endeavour to make the capital commitment look better in the balance sheets. It is likely to be a very calm end of year with more extensive production breaks than usual. Hardly any converters have orders on their books that could not be handled before Christmas.

Although the annual negotiations for 2024 have already taken place, there have so far not been any wide-ranging concrete price agreements. Converters have their backs to the wall. For this reason, they are both unable and unwilling to make any promises about volumes. Observers assume that the engineering thermoplastics market will gradually shift from a contract market to a spot market, which converters hope will give them greater flexibility – very much to the chagrin of the producers.

Polyurethane feedstocks November 2023: Slight markdowns overall / Price erosion likely to continue with weak demand

With some delay, isocyanates followed the drop of the cheaper precursor, benzene, which fell by a significant EUR 148/t in November. At the beginning of the month, producers were able to record some successes, some of which came close to triple-digit increases. Since the middle of the month, however, they have been unable to hold their own against the processors, with prices for both MDI and TDI falling by between EUR 100/t and EUR 130/t. In the case of polyols, on the other hand, producers often succeeded in keeping the precursor discounts for ethylene and propylene in-house.

In the mostly balanced markets in Europe, none of the purchasing sectors showed any significant demand impulses. As a result, processors had enough stock in most cases and only bought what they needed.

No significant changes are expected in December. The shorter production month is also likely to slow down order activity. The drops in prices are therefore likely to continue.

Composites/GRP November 2023: Resins ease / Inventory drawdowns cloud market / Glass fibres could be near bottom

As had been anticipated, the downward trend in resin prices was halted in October, despite the Inventory drawdowns, in part coupled with significant price declines, divided the composites market into two parts in November. With subdued demand, the number of sealed deals were few and far between for both resins and some glass-fibre products.

Most converters ordered cautiously, covering their immediate needs, though many sought and won rebates for the contingents that producers and distributors tossed onto the market to clear out inventory at year’s end.

On the whole, weak demand from end-markets even more so than lower production costs – in particular for the principal feedstock styrene – held any potential price increases for ortho resin in check.

There is little to say about orders in December as the few noted seem to be holdovers from November. New orders are thin on the ground, which is not surprising as some converters have said they plan to close from mid-December to almost mid-January.

In the few weeks left until Christmas, little price momentum is to be expected. Converters are ordering cautiously. The bottom may have been reached for both resin and glass fibre products although standard chopped strand mats and direct roving could still give up substantial ground. There seems to be enough leeway.

Standard recyclate November 2023: Prices fluctuate between stable and slightly falling / Market remains stubbornly in rollover / No stimuli for demand

Prices for recyclates based on standard thermoplastics in Western Europe basically fluctuated between stable and slightly falling in November. Significant discounts were granted for very high-quality grades as a tribute to the falling prices for primary materials. Recycling lines were often throttled. Some recyclers complained about a declining supply in base material, but it was still sufficient to safely fulfil contracts. Demand did not get up from the ground. In addition, processors have begun preparing for the end of the accounting-year and thus were buying only essential volumes.

In December, European recyclers are expected to do everything they can to avoid further margin losses. Stability is what both processors and recyclers wish and expect for the end of the year. Then, in the second half of December, a number of reclaim companies plan to stop production and start maintenance work on their plants.

Many processors are planning production shutdowns and plant downtimes during the upcoming public holidays, too. For accounting reasons, they are also reducing inventories. All in all, there are no recognisable demand stimuli. As a result, the rest of the year is likely to end in a completely unspectacular manner.

Engineering recyclate November 2023: Weak demand combined with abundant imports puts prices under pressure / Business likely to remain slow in the “maintenance month” of December

Across all types, producers conceded further price reductions in view of the poor sales and the competition from imported material. In many cases, they had no other option because, despite considerable cutbacks in production in Europe, the market remained long because of the imports. Demand everywhere was unable to escape from its profound depression.

In addition, converters were starting to prepare for year-end balance sheets by running down their stock levels and, in most cases, ordering only what they needed to fulfil existing orders. Once again, there was virtually no impetus coming from the customer markets. Converters are therefore preparing both mentally and operationally for the end of the year. In many places, cutting down inventories is likely to remain the priority in December.

Also, in the final month of the year, little is likely to change as regards the basic constellation of the long market. Imports are expected to more than balance out the production cutbacks. For this reason, it should be no problem satisfying the very weak demand. Producers, nevertheless, are likely to do everything they can to avoid more reductions because they would simply be unable to afford any further erosion of their margins. For this reason, prices are expected to roll over.

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Price Reports November 2023

Articles: November 2023

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