Price Reports October 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:  October 2016

Standards Thermoplastics Engineering Thermoplastics Polyurethane Feedstocks GRP/Composites

  Standard Thermoplastics October 2016: PE under pressure despite slight rise in C2 / Increases for PP fall short of cost rise / PS follows SM's downward trend / Notations expected to rise across the board in November

PE: At the onset of the last quarter of 2016, PE producers had no choice but to hold prices at September’s level or even lower them slightly, even though the monthly ethylene contract had been fixed EUR 15/t higher. With converters' order books not quite filled up, call-offs were relatively muted. As a result, availability was long, with a slight tendency to a surplus.

The latest rise in the C2 contract price will push PE prices up. Producers will likely be averse to lowering prices further, which would necessitate a substantial cut in margins.

PP: On the back of a EUR 35/t rise in the monthly C3 contract, notations for PP pointed upward again in October. While producers were able to pass on a bigger share of their higher cost burden, they were still unable to recoup all of the additional C3 cost and thus once again suffered margin losses.

With maintenance turnarounds having ended, output of European plants moved back closer to normal. The influx of imports also ebbed. With the fresh rise in the C3 contract for November, prices along the propylene chain will continue to spiral upward. Whether the full EUR 30/t can be passed on to buyers or producers may be able to add an additional margin component will depend largely on the extent to which demand in the last “normal” month of 2016 is influenced by the harbingers of the approaching year-end holidays.

PVC: Aware that they would be unable to achieve any margin gains, European PVC producers nevertheless tried to pass on the slight increase in base material costs in October. That proved difficult enough and it was only thanks to their stubborn resilience that most were in the end able to pass on the proportionate EUR 7.5/t increase in the ethylene cost. The approaching winter season was already casting a long shadow over October transactions, as processors began to schedule their orders in weekly intervals.

In the case of ready-to-use blends, the higher cost of most additives – including titanium dioxide, modifiers and plasticisers – exerted additional pressure, driving notations up beyond the increase in matrix material costs. The decline in imports enabled PVC paste producers to achieve slight margin gains.

Headed into November, costs continue to point up. Given that demand will enter its usual winter off-season, PVC base material producers thus remain under pressure. Exports could offer some reprieve, although it remains to be seen how this market develops. Amid the ongoing increase in additive costs, both dry blends and compounds notations are expected to see disproportional rises in November again.

Styrenics: The decline in October’s styrene reference contract took PS and EPS prices down with it. Most producers found themselves having to pass on the entire EUR 50/t cost decline – only in the case of EPS insulation materials were they sometimes able to pocket a small margin component. There was almost no movement on the ABS price front as the higher cost of both butadiene and ACN in effect cancelled out the SM decline. As a result, notations mostly rolled over or were adjusted slightly downward.

The market situation is expected to change again in November. In the wake of the accident at BASF in Ludwigshafen / Germany and the resulting temporary shutdown of the site’s SM production, spot prices rose noticeably. Spurred by this, November’s SM contract was fixed EUR 40/t higher, and styrenics prices will likely follow suit.

PET: Although European PET suppliers were able to lift the prices of small-volume lots slightly in October, their margin situation remained precarious. Imports from India, Southeast Asia and increasingly also Turkey continue to arrive on Europe’s shores, undermining producers’ efforts to improve their bottom line. Utilisation rates in Europe currently stand between 70-80%. Orders for mid-sized and bulk lots were generally caught in a rollover. Demand, meanwhile, was rather lacklustre.

Headed into November, there is little for PET producers to look forward to. Demand for cold beverages – which proved rather weak this year as a result of the poor summer weather – is ebbing, with most consumers switching to hot drinks instead. PET is not much in demand for the latter. Availability is expected to remain good. Provided there is no change on the cost front, producers might have to give up the small gains again.

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 October 2016: New quarter begins on stable footing / Slight declines limited to PA 6 and POM / Producers' calls for hikes fall on deaf ears / Little price movement expected for November

The month-long erosion in engineering thermoplastics prices appears to have come to an end, at least for now, with notations trending largely sideways in October. Producers’ at time rather ambitious calls for price increases were largely ignored.

In the case of PC, a few particularly low-lying prices were brought up to scratch. PA 6.6, PBT and PMMA notations, on the other hand, generally rolled over, while the price of less specified PA 6 and POM grades even declined slightly. There was little movement on the ABS price front (see PIEWeb of 03.11.2016), while the increase in PP compounds notations fell slightly short of the C3 cost rise (see PIEWeb of 03.11.2016).

Headed into November, notations are expected to hold largely stable. That being said, there could be some movement at the lower end of the PIE price range for PC and PMMA, as some materials are brought up to par. It looks like producers will have to wait until the beginning of next year to realise their calls for triple-digit increases for PC, PA and PMMA. There are no price drivers pushing PBT or POM, although in the latter’s case, the aggressive price offensive from Asian imports should abate somewhat.

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 October 2016: TDI prices continue rising but upswing stalls / Slight gains for MDI / Polyols roll over / Further isocyanate outages make market nervous

The TDI market remained difficult to assess. While signs of normalisation have appeared on the horizon of late, recent outages at additional European MDI and TDI plants may well have put paid to these hopes. Although the new disturbance factors – thought likely to continue until December – as yet have had no real impact on the market, players are monitoring the situation closely. TDI prices are continuing to rise, albeit at a slower pace. Both MDI grades made gains in October as well, led by the polymeric side.

Despite the slight upward dynamic for ethylene and propylene feedstocks, notations for polyols made few strides in October. While producers in some cases tried to lift price levels, their efforts were unsuccessful. Nothing is likely to change in this respect in November.

There is little doubt that TDI prices will keep moving upward in November, and MDI could also point higher. How it all plays out will depend on the development of output levels at several European plants currently being operated below capacity. In contrast to expectations only a short time ago, the market does not look likely to move back towards a comfortable balance in the near future.

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 October 2016: Notations are under pressure / Largest rebates for rPS and rLDPE / Demand rather weak / Amid lack of any stimuli, no trend reversal in sight

The price of most standard recyclate grades crumbled in October 2016. By now, rLDPE has started to suffer from the effects of the ban several retailers in Germany in particular have imposed on plastic bags. In the case of rHDPE and rPP, the general situation of oversupply is taking a toll, while rPS and rPET are feeling the effects of declining virgin material prices. The post-holiday boost in demand that many had expected failed to materialise.

Looking ahead towards the coming weeks, recylate notations will likely continue to erode or at most move sideways. There is currently no sign of any positive impulses that could mitigate this downward trend.

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 October 2016: Notations predominantly stable / Individual peaks for rPA and rPOM are capped / Demand below expectations / Little effect felt from producers' calls for hikes on the primary market

At the beginning of the new quarter, prices of most engineering recyclate materials stabilised again. Only with a few rPA and rPOM grades were there some minor downward corrections, and here mostly only for smaller quantities and specialised formulations. In the case of PA recyclate, sellers were pressured by the small difference between the secondary and primary prices, but with POM recyclate the reason for the small decline lay more with the oversupply of the virgin material. There was plenty of plastic scrap available, which strengthened the position of recyclers on the purchasing front. It meant that recycling facilities were able to operate without restriction.

There was a complete lack of any stimulus to demand so that the situation stayed at its subdued previous month's level – at the lower end of expectations. Producers of primary material are seeking higher prices for PA and PC, justifying this with the cost increase for the feedstocks and base polymers. If demand does not spring to life soon, however, it is likely to be difficult for the producers to push through increases. PP and specified PC grades probably have the most scope for price rises, and based on this fact, the regrind material could also undergo a small increase.

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!