Price Reports September 2015

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: September 2015
Standards Thermoplastics Standard Recyclate Polyurethane Feedstocks	Engineering Recyclate Engineering thermoplastics Composites/GRP

Standard Thermoplastics September 2015: Notations decline across a broad front / Polyolefin decreases often exceed fall in costs / Other grades follow feedstock price declines / Renewed falls expected for October

PE: European PE producers had hoped they would be able to limit the inevitable price cuts to the monomer reduction of EUR 90/t in September, but it became evident fairly early in the month that they would not succeed. Especially with LDPE and LLDPE, the perceptible reluctance shown by converters to place orders dragged notations in some cases well below the level targeted by producers. Many grades of HDPE on the other hand held up somewhat better in view of the tendency to a tight supply situation, but nevertheless fell by more than the cost reductions. EVA producers again passed on the fall in the monomer costs, one-to-one.

The ethylene reference price for October dropped again, but, at only EUR 40/t, the fall was smaller than before and also significantly less than that of its sister olefin, propylene. There can be little doubt that buyers will want to reap the full benefit of this cost reduction – and, indeed, it is almost certain that they will do so – but gaining anything above this will be a matter for intensive negotiation.

PP: Attempts by PP producers to hold onto some of their cost relief from the EUR 110/t decline in the propylene monomer price didn't have much chance of succeeding. The market was simply too long. Up to mid-month, polymer prices fell farther than the monomer's decline but towards the end of September downward pressure eased somewhat. For PP compounds, the fall in the monomer notation put downward pressure on indexed contracts compounds as well as in free trading.
Polymer producers curbed delivery from mid-month after order volume in September’s first two weeks proved unsatisfactory. The lengthening supply of C3 subsequently led to a fresh price decline of EUR 110/t and will step up the pressure on PP suppliers to offer concessions in the coming weeks.

For compounds, as usual, the C3 decline will be factored into prices proportionately. Beyond that, other factors will play a role this month. Dark clouds are lurking on the horizon as it remains unclear what the knock-on effects of the widening Volkswagen crisis will be. Receding sales of the automaker that leads the mass-model segment and as such is a major customer for PP compounds could have a potentially devastating impact on demand all along the supply chain.

PVC: In September, producers again had no other choice than to pass on the proportionate cost decreases for ethylene to their customers. However, they did successfully defend their margins. With the ongoing downslide in the prices of titanium dioxide and modifiers pressuring the entire chain, PVC compounds saw price relief from both the matrix material and additives.

The market was sufficiently supplied. Demand in Europe improved somewhat but buyers did tend to hold back in expectation of further price declines. Many producers’ expectations of a brisk export trade remained unfulfilled.

The ethylene contract for October gave way by a further EUR 40/t, and buyers will most likely see their purchase price cut by half that amount. Anything beyond that will be decided in tough negotiations. Both sides potentially could come under pressure with too much material on their hands. Producers are suffering from poor export demand, while converters will need to buy more to deal with a strong order backlog at a time when they need to draw down inventories toward year’s end.

Styrenics: In September 2015, PS and EPS standard grades mostly followed their feedstock styrene whose September reference had gone down by EUR 100/t. ABS listings likewise were drawn down by the sinking cost mix. Still, the overall styrenics image was characterised by restrained purchasing, as most buyers expected even larger discounts.

Speculators were proven right when the SM reference contract fell by EUR 210/t in October. In the course of the gold-leafed autumn month, one can expect to see more substantial discounts across the whole portfolio. This should increase demand for PS and EPS in the last strong buying month of the year.

However, the high level of uncertainty in the automotive supply chains caused by the VW crisis could dampen demand for ABS despite low prices. Stocking up in this situation would currently be seen as absurd by most suppliers.

PET: European PET producers managed to get a little more air to breathe during the course of September. Costs fell by EUR 70-75/t, while the polymer prices dropped a little less, providing producers with a minor improvement in their margins. They were helped to a large extent by the stabilisation of notations in Asia, which progressively reduced the pressure from imports as the month advanced. At the same time, demand picked up, especially in southern Europe. Many converters now need to top up their stocks after last having done so in June. After all, it does take at least a minimum amount of material to produce anything.

October should see a certain stabilisation with a consolidation of PET prices as long as no unexpected impulses come from the cost side.

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 September 2015: Notations come under pressure / Slump in cost of benzene begins to impact PA 6 / Start of new quarter and VW crisis will nibble increasingly at prices during October

In many sectors, producers of engineering thermoplastics succeeded in just about keeping prices stable last month, largely protected by existing quarterly agreements. In the case of PA 6, on the other hand, the first visible signs of the benzene slump in recent months became apparent. ABS and PP compounds also followed the downward trends of their respective raw materials. The other products, however, remained stable despite coming frequently under pressure from the increasing influx of imports.

October could witness a widespread downward movement. On the one hand, the negotiations at the beginning of the new quarter will see customers who are tied to long-term agreements insist that the accumulated cost reductions are factored in to the full. On the other, low-priced Asian imports are again making increasing inroads into many market segments.

As if that were not enough, the entire automotive supply trade in Germany and Europe is currently under shock from the VW crisis. The uncertainty is so great that ordering is already being described as extremely sluggish. In a situation such as this, nobody can afford to tie up capital. This is sure to have a noticeable effect even though many players in the upward supply chain have perhaps not yet realised it.

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 September 2015: Downward trend for all reported materials / Flexible polyols most affected / Further declines likely in October / Demand back to normal

Despite the relatively sharp downward trend for benzene, MDI notations lost only slight ground in September. Most contracts were settled at a rollover. Pure grades saw concessions of around EUR 40/t, while prices for polymeric grades dropped by as much as EUR 70-80/t. This was not a general trend, however. With supply long, in particular the upper end of the PIE range for both products settled lower. For TDI the trend was similar, although not as pronounced. The steep fall in the toluene contract shaved the top off TDI prices by, at most, EUR 10/t.

Even with demand rather robust, notations for both rigid and flexible polyols pointed downward in September, due to the more substantial declines in the respective contracts for feedstocks C2 and C3. The decline for the flexible grade was EUR 25/t on average, for rigid grades EUR 55/t. In October prices are expected to show further deterioration across the board.

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 September 2015: Resins point slightly downward / Order surge toward year's end / Glass fibre producers gearing up for price increases

In September, medium-reactive ortho resins trended mostly sideways, before giving way slightly – by EUR 15/t on average – toward the end of the month. This was an initial reaction to the price slide seen earlier for the two main feedstocks, styrene and propylene.

For October, notations are likely to deteriorate further, especially as the monthly styrene contract slid back by a further EUR 210/t, and propylene tripped by slightly less. Resins prices in October should settle EUR 30-40/t below September unless firming demand – in particular from the automotive sector – brakes the downward momentum. Despite generally brisk business, the Volkswagen crisis has created a degree of uncertainty in the market. No restrictions on production appear likely.

The market for glass fibre-based composites is at present somewhat more turbulent. Despite flat pricing in September, most buyers expect rises at the beginning of next year and are nailing down volumes ahead of their usual schedule. The extent of the anticipated hikes is as yet unclear but around 5% is being talked. Adding to the uncertainty are plans by Chinese suppliers to step up exports to North America, where prices are currently higher, thus tightening supply here. Another factor is that the EU is due to review its punitive tariffs on Chinese goods in mid-March 2016. European buyers would like to see tariffs at least lowered somewhat. This, they hope, would relieve some of the pressure on supply and shorten the currently long delivery times. This would be unlikely to influence prices before the end of November, however.

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 September 2015: Virgin market downtrend starts to have an effect / rPP and rPET particularly affected / Only isolated declines for rPE / Price decline expected to pick up

Initial signs of the relaxation on the virgin material front started to appear in the standard recyclate market in September. PP regrind and transparent rPET grades competing with primary material were particularly impacted. Declining scrap costs were not always able to make up for recyclers’ revenue losses. Secondary players were able to keep rPE and rPS prices stable and thus managed to catch a break as their margins finally saw some improvement – the first this year. Nevertheless, they also had to make some concessions, especially for a number of rLDPE film grades.

The downtrend on both the primary and secondary markets is expected to gather even more steam in the coming weeks. On the input side, falling virgin material prices are meeting with the retreat of Asian scrap buyers from Europe – a combination that is driving scrap prices further down. On the other hand, the decline in primary market prices also means they are increasingly able to serve as an alternative for high-quality secondary grades. The further apart the respective application fields of the virgin and the secondary material, the less the primary market downtrend will hold the recyclate notation in its grasp.

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 September 2015: Little movement / Cost declines from petrochemicals and primary markets have not yet filtered through / rPOM slips / rABS and rPP compounds prices could decline

The market for engineering recyclate remained largely calm from mid-August to mid-September. The decline in virgin ABS, to some extent also PC, but above all PP compounds prices has not yet penetrated the secondary markets. On the contrary, availability of rPC is considered to be relatively tight, which in turn is helping to keep notations stable. It was the reverse scenario for POM recyclate, supply of which was simply too long for prices to hold, and the downturn is being reinforced by favourably priced imports of standard material, mainly from China.

In the coming weeks, the price of rABS and rPP compounds is expected to come increasingly under pressure, following the downtrend in virgin material notations, which began in August and is likely to gather more speed in September. This will not leave regrind untouched. POM recyclate notations could also drop again. By contrast, it still remains unclear what direction rPC and rPA prices will take. In both cases, a lot will depend on the upcoming quarterly agreements for the respective virgin materials.

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!