Price Reports September 2019
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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! |
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Articles: September 2019 |
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Standards Thermoplastics |
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Standard Thermoplastics September 2019: Polyolefins and PVC oriented towards cost reductions / Styrenics subproportional to SM / PET continues to slide / Substantial turnaround not in sight
PE: European PE markets in September were characterised by the effect of the declining C2 reference. Producers wanted to hang on to some of the cost reduction, but they only succeeded to a minor extent with niche applications. Materials subjected to only low competition such as the high-quality LLD (C8) grades proved to be the strongest in this respect. C4 grades exposed to imports, on the other hand, in some cases even fell by slightly more than the cost reduction. Demand was cranked up as buyers looked ahead to the annual bonuses and in view of prices bottoming out after the attack in Saudi Arabia. Demand could be described as more or less normal. However, because this is not based on real demand from the end markets, this trend could come to an end in October. Converters’ stocks have been topped up and no speeding up of sales is in sight. Producers will find it difficult to push through in full the renewed slight increase in the C2 reference. They are only likely to succeed where the supply situation is sufficiently trimmed.
PP: The European C3 reference for September declined noticeably. Despite the continued weak demand, PP producers were able to retain a moderate part of the reference price change as slight margin gains due to the supply shortage. With notations of PP compounds, there were level changes for contracts indexed to C3, the materials declined accordingly, depending on their reference dimension. The propylene reference recovered only slightly in October due to increased naphtha costs. Suppliers of standard PP might price this in on the grounds of the rather scarce supply. However, the persistently low demand is setting clear limits to the upswing. As for compounds, there is hardly any movement expected either way.
PVC: The European PVC market in September 2019 was characterised by producers passing on the pro-rata cost savings. Only for smaller volumes could producers push through demands that incorporated a slight increase in margins. Where the previous month’s prices permitted, reductions beyond the C2 price were granted in isolated cases in the further course of the month. The hoped-for revival in demand has still not come about, particularly on the German market. Processors have thus reduced their volume requirements in some cases. A FM that was declared did not cause bottlenecks in supply. Additives tended sideways to lower. Plasticiser prices continued their downtrend. With costs firming, PVC prices ought to climb higher too. No major hikes are expected, however, since buyers are acting cautiously and likely to react to high price demands by cutting back their volumes. The most likely scenario is one of producers passing on the pro-rata cost increase.
Styrenics: In September, the latest increase in the SM reference fuelled a wave of price hikes for styrenics. Producers mostly managed to enforce premiums close to the cost increase at the very beginning of the month. Later on, the oversupply situation eroded the extent of the premiums. For ABS, there were even widespread rollover agreements, especially as some suppliers offered favourable package deals. All in all, styrenics producers suffered further margin losses. Suppliers aim to put a stop to this development in October. In view of the EUR 21/t decline of the SM reference for October, they will probably at least push for a rollover. However, their success will again depend largely on supply and demand.
PET: The European PET market remained depressed in September. A brief period of disruption following the drone attack in Saudi Arabia did not have any impact on the continuing restrained demand. Warehouses are full across the entire value chain, since outflow has remained very limited for some time now. Paraxylene also slumped in August. The smaller regular transactions reported by PIE did not decline to the same extent as spot prices or the very large volumes, most of which are currently hovering around the EUR 900/t mark. The depressive mood in the market does not seem set to undergo substantial change. Following the renewed drop in the PX reference contract, further reductions are in the cards for PET notations too.
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 September 2019: Most producers keep prices stable at end of Q3 / Only PA 6.6 sees minor reductions / October is start of a new quarter and new game / Buyers will insist on price cuts
In the vast majority of cases, European producers of engineering plastics managed to keep prices stable in the final month of the third quarter. In their negotiations, they referred to the valid quarterly agreements and rising costs across the benzene chains. Only with polyamide 6.6, which has been flying extremely high for some time now, did producers have to bite the bullet and lower prices. Although demand showed a few signs of picking up, it was well below a normal September with the usual topping-up activities. The crisis in the auto industry is still having a detrimental effect.
With the commodity-related materials, prices of polypropylene compounds fell significantly in line with the feedstock reference, while the ABS materials were a little firmer, following in the footsteps of the rise in the feedstock styrene.
October rings in the fourth quarter, and many buyers are fed up with having to put up with producers’ stubbornly defended price announcements – seemingly without being able to do anything about it. Caught in the dilemma between the high material costs and the purchases at their customers, they are left with no other option than to drop prices. In view of the tired end markets, where the slump will probably climax in December, producers will find themselves in a position where they have to yield at least partially to the pressure. The general impression is that, with many materials, the present margins should in fact offer sufficient scope for this.
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 September 2019: MDI polymer and TDI tend further upwards / Demand from auto and furniture industries remains weak / Current trends likely to continue in October
Against the background of the maintenance turnarounds at BorsodChem in Hungary and the lively demand from the construction industry, producers succeeded in pushing through significant hikes for MDI in September. Only a few buyers came through unscathed after first small increases in the previous month. On the other hand, the pure grades with their dependence on car production lost some ground.
The average price for TDI has risen noticeably in recent weeks, without buyers being able to detect any real market-relevant reason for this. Producers’ desire to restore margins is probably the most likely explanation.
Polyol notations declined, with the flexible grades falling slightly more than the rigid ones. The ethylene and propylene feedstocks will continue to put pressure on prices.
With the end of the holiday season, demand picked up again. Ordering from the automotive and furniture segments nevertheless remained below expectations, while business with insulation sheets for building applications continued strong.
The hefty increase in the September price of benzene is likely to drive further hikes for MDI in October. The only thing still unclear is the size of these rises. After all, in addition to the ongoing geopolitical issues, there was the attack on Saudi Arabian oil processing. Regarding market requirements, the situation is more or less in accordance with the season. TDI will probably continue to trend upwards, but not to the same extent as has been seen recently.
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 September 2019: Cautious market leaves ortho resins prices unchanged / Demand remains slack / No movement for glass fibre products
During September, notations for medium reactive ortho resins remained practically unchanged – apart from minor reductions here and there, seen as a belated reaction to the fall in the monthly styrene price. With demand not especially buoyant, the upward momentum of the SM price did not play a major role, in particular as notations for other starting materials for the most part remained soft.
The slight decline in the styrene reference price at the beginning of September should support a rollover of resins prices in October. Some individual supply contracts could see minor concessions if converters remain firm in the price rounds.
As was the case a month earlier, the glass fibre market showed only a few isolated price adjustments. Most products saw little change, however. Supply and demand continued in the same groove reflected by the “Composites Europe” trade fair.
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 September 2019: Price cuts and rollovers predominate / Expected upturn in demand did not materialise / Attacks in Saudi Arabia could stimulate interest in recyclates / Widespread rollovers expected in October
Standard recyclate prices in Western Europe trended either horizontally or down in September 2019. The recovery in demand that had been expected for some segments after the end of the holiday months turned out much weaker than hoped for. Most recyclers have high inventory levels. Many rLDPE grades and, once more, the rPET grades experienced particularly strong downward pressure. Pipe grades were in good demand due to an unscheduled outage on the primary market.
In October, rollovers are most likely. Demand in the construction, furniture and packaging segments should normalise somewhat, while interest in recyclates could pick up slightly due to the uncertainty following the drone attacks in Saudi Arabia. Only for rPET, call-off orders are likely to decline once again at the beginning of autumn. Coloured flakes remain an exception, as strapping production is at a normal level.
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 September 2019: First price cuts in mid-month / Order activity expected to remain slow in October / Price cuts likely to spread
In September, notations for ABS fell, as did those for the reinforced and black grades of both types of polyamide that are used predominantly in car production. By making these concessions, recyclers endeavoured to revive business. In many cases, the quarterly agreements provided protection from a further downward trend, but from the suppliers’ point of view, demand continued to be no more than satisfactory.
Regrinders as a whole also described order activity as satisfactory following two weak months “such as they had not seen for several years”. Only the automotive sector failed to come up with any impulse whatsoever.
Whereas ABS prices will probably not decline further in October, rPA 6.6, rPC, rPC/rABS blends and rPP compounds in particular are likely to fall considerably. As the gap to the relevant primary product narrows, it is unlikely that recycling companies will be able to avoid prices reductions, particularly as demand remains below expectations.
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!
