Price Reports September 2020
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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! |
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Articles: September 2020 |
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Standards Thermoplastics |
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Standard thermoplastics September 2020: Polyolefins and styrenics drift sideways / Tight supply drives PVC further upwards / PET in downward trend / Effects of storms in the US make themselves felt
PE: Although the cost of ethylene remained stable in September, producers nevertheless called for price hikes of up to EUR 50/t for all types covered by this report. As before, they are doing everything they can to reclaim lost margins. These attempts were, however, seldom successful, and LLDPE materials even declined slightly. On the other hand, the price structure tended to be a little firmer in the second half of the month because producers gave preference to exports, for example, to the United States in order to benefit from the higher prices there after the storms. On the demand side, industry applications and car production remained weak, but the packaging sector was, with few exceptions, quite lively. Nevertheless, some converters were disappointed because, generally speaking, a significant upturn had been expected after the corona high. With some film grades, the lack of metallocene types from the US made itself felt. Despite the small reduction of EUR 10/t in the ethylene contract in October, producers will presumably repeat their calls for price increases of the same amount. Even though demand will presumably continue to pick up, they cannot be assured of success, although the increased exports and the resultant lack of material in Europe should have a consolidating effect. Pipe producers will, after the increases of the last few months, attempt to hang on to the small cost reduction. Overall, a rollover is probable for the vast majority of the PE products.
PP: With C3 costs stable, PP prices moved sideways in September. Hike plans hedged by some producers mostly fell apart, even if some low-lying notations were adjusted upward. Although plant outages reduced production levels, this had little impact, as demand was simply too weak. Sales to the automotive industry gained some momentum, but remained far below normal levels. In October, this market situation looks unlikely to change. In view of the tight supply, it seems doubtful that the EUR 12.50/t dip in the C3 price will be passed on.
PVC: PVC prices in September tended upwards for the fourth month in succession. On the cost side, there were no particular impulses, but the tense market situation with the base material drove prices up. Unscheduled plant stoppages intensified the already tight supply situation. Apart from that, converters endeavoured to fill up their low stocks. For several compounders, the procurement of base PVC was a real problem. Nothing much is likely to change in October as regards the tight market. Although some production plants are resuming operation, more maintenance turnarounds are on the agenda. Against this background, further price rises for the base material are to be expected. In the slipstream of this, compound prices will presumably also increase, while E-PVC pastes will receive an additional boost from the rising cost of the VCM feedstock.
Styrenics: Styrenics prices trended largely sideways or slightly downward in September 2020 after the marginal decline of the SM reference by EUR -13/t. The markdowns for polystyrene films were somewhat more pronounced after larger price reductions were made, especially in distribution. Prices for ABS injection moulding materials, by contrast, have increased because the producers no longer accepted the previously modest price level before the backdrop of scarce availability and the absence of imports. Other materials were hardly affected by the supply situation even if some producers had to cope with restrictions in their deliveries due to plant maintenance or production cutbacks. This is unlikely to change much in the weeks to come, so that the further development of the SM reference – which declined again in October by EUR -33/t – is likely to be transferred to PS and EPS prices, at least in part. For ABS, this is less likely as the EUR +40/t cost increase of butadiene is slowing the decline in composite costs and the low level of imports continues to limit supply.
PET: European PET producers had to make significant concessions in September. Otherwise, it would have been virtually impossible to do any business, especially in the first half of the month. A lack of demand because of the build-up of the second corona wave, attractive import offers plus well-filled raw material stocks and falling prices for the aromatic petrochemicals combined to put significant pressure on prices. In the second half of the month, this pressure then declined significantly. Maintenance turnarounds and production cutbacks had an effect and, at the same time, more material flowed in the direction of the once again hurricane-hit United States. Below the line, this resulted in price reductions of EUR 40-50/t for each of the two late-summer months. Ahead of upcoming maintenance turnarounds at some key sites, European production lines were still running largely smoothly. The fast-rising coronavirus infection figures again being reported in many regions did, however, exacerbate the already weak demand. Especially the mass beverage bottle market was once again very disappointing. No major stimulus in demand can be expected for October either. The pandemic is gathering speed again in Europe, while, at the same time, the supply situation is tending very much lower. This combination should stabilise prices or perhaps even consolidate them to a certain extent.
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 2020: Stable prices across the board / Automotive industry forecasts weak demand until 2021 / Lamps and lights expected to do well in the dark months / Price rises at the start of the new quarter?
Like August, September proved to be unspectacular as regards engineering thermoplastic prices on the European market. Whether it was polycarbonate, polyamide, PBT, POM or PMMA, all the plastic types covered by this report remained unchanged compared with the previous month. The “Plastixx TT” polymer price index nevertheless pointing slightly up (see graph) can be attributed to ABS, which is not reported on here.
Producers were unsuccessful in their bids to pass on the announced and implemented price increases for the base polymers and intermediates. Not surprisingly, the quarterly contracts held a protective hand over converters; the generally weak demand did the rest. Neither cutbacks in production – one of the commonly used means to control the market – nor the announced maintenance turnaround at a key POM facility were able to change anything in this respect.
After a long period of working from stock by converters, a small revival in demand was noticeable, especially with PC and PA. It was, however, well below the normal September level of pre-coronavirus times. E&E continued to be lively with products for the building segment and for lamps and lights, where the switch to LED technology and the traditionally higher demand in the upcoming dark months continued to drive demand. Meanwhile, there are increasing signs that the poor demand in the automotive industry could continue until well into 2021.
Some producers are nevertheless likely to see the start of the new quarter as an opportunity to call for price increases, but in the present market situation it is unlikely that they will succeed on a broad front.
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 2020: Prices climb even higher / Strong demand and tight supply / Upswing likely to continue into October
Notations for polyurethane feedstocks continued their upward climb in September 2020, driven by strong demand. MDI and TDI in particular reacted to the limited supply. The trend was noticeable, not only in Europe, but also in Asia and other important global markets. In the US, some plants were offline due to hurricane Laura, while in the Middle East, producers also cut output. Both phenomena diminished the presence of imports in the European market.
Demand from the construction and upholstery sectors was lively, and even the automotive industry regained some of its strength. Some PU buyers told PIE that sales volumes to the latter sector bounced back to 70-80% of the pre-Corona level. MDI plants in Germany and Hungary are understood to be back on-line again after outages. Not least the absence of imports has further tightened supply during a period of high demand.
If supply and demand are at the same ratio in September, notations for both MDI can be expected to point farther upward. Sources have told PIE they anticipate hikes of as much as EUR 100/t. With some certainty, the ramp-up of capacity will take at least until the end of August, if not longer.
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/GPR September 2020: Resins rise as feedstocks sink / Demand gradually recovers / Supply varies regionally / Glass fibre eases somewhat
Although the September contract for the main feedstock styrene dipped slightly, by EUR 13/t, producers for the most part concentrated on pulling low-lying prices for medium-reactive ortho resins upwards again. The upper end of the PIE range showed no movement. There were few supply limitations in September. One producer reported high capacity utilisation rates, which meant that converters and distributors with indexed contracts had difficulty ordering additional volumes. The earlier production cuts were not all still in force, but there were significant regional differences in availability.
With the end of the summer holidays, converters saw clearly positive upward momentum in order intake. This is reflected in the PIE indicator, which has now moved up into the weak “normal” range. Even though the automotive and utility vehicle segments are still very sluggish – the recreational vehicle segment is an outlier – the other markets showed signs of recovery.
In October, the styrene contract was fixed slightly lower again, and this will put downward pressure on resins notations. On the whole, buyers are clearly exercising caution, in particular as no one knows whether the approaching cold and flu season will bring new shutdowns. At the moment, converters are ordering only what they absolutely need.
Up to the end of the year, the glass-fibre market is unlikely to show much dynamism. Notations for chopped strand mats and direct roving gave way minimally in some segments in September; however, the trend points to noticeably rising prices. In the short-glass fibre segment, the hikes may well not go through, due to weak demand from the automotive industry, but this may not be the case for direct and assembled roving.
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 2020: Most prices move sideways / Only occasional slight discounts / Demand often below expectations / Prices remain largely stable in the coming weeks
The hoped-for positive effects of restocking after the summer holiday period did not materialise. As a result, the market for standard recyclate in September 2020 lacked the necessary momentum for planned price increases, especially since there was barely any movement in the price of new material. Against this background, rollovers were agreed on for almost all varieties. Only rHDPE blow-moulding grades and coloured rPET flakes had to take the existing oversupply into account and accept slight discounts.
The overall situation is unlikely to change much in the near term. There is a lack of relevant impulses for increases and, in view of the costs, recyclers also do not have any significant leeway for rebates. Even though market players have not yet given up hope of a delayed recovery of the so-far rather disappointing demand after the summer holiday season, prices are largely likely to move sideways in the coming weeks.
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 2020: Supply and demand equally low / Low-priced new material continues to exert pressure / Minor impetus from reduction in value-added tax
The market for recycled engineering thermoplastics is historically poor. Both supply and demand are low across all types – and this is true both now and for the near future. No wonder then that there is no movement in prices whatsoever.
However, to place all the blame for this on the coronavirus pandemic would be too short-sighted. The price wars on the primary goods markets are also a significant contributing factor. As long as low prices are available there, it is hardly possible to do good business with recycled materials. In order to be competitive here, a noticeable price difference is needed.
Although there are now more and more announcements by primary material producers that they intend to raise prices, whether this will succeed will only be seen at the turn of the quarter. If this is the case, demand for recyclate could rise faster than supply in some cases, resulting in supply bottlenecks. Such impulses could most likely come from the construction sector or from E&E manufacturers, as well as, to a certain extent, from manufacturers of smaller vehicles. The reduced value-added tax is having a positive effect on sales here.
Otherwise, it must still be noted that the revival of the recyclate market, which usually occurs at the end of the main summer holiday period, is barely noticeable. Although there was a brief surge at the turn of the month, it disappeared again just as quickly as it had come. As a result, recyclate simply remains too expensive for many users.
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!
