Price Reports September 2022

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!

  Standard thermoplastics September 2022: Downward price trend continues / Producers counteract decline in quotations by cutting back production / Processors increasingly with their back against the wall / No demand in sight

PE: Prices continued to decline on the Western European market in September. Once again, the significant fall of EUR 120/t in the ethylene reference price pointed the way. On the other hand, the cutbacks in output implemented by producers are already having an effect with many materials. Despite the sluggish demand, producers were able to factor in at least part of their increased energy costs during the price negotiations with the converters. The result was that prices were reduced in line with the C2 decline or higher with only a few materials such as LDPE and HDPE pipe grades. For some LLDPE film grades, the reductions were restricted to no more than EUR 40/t, and for HDPE injection moulding grades to EUR 60/t. In October, too, producers will play the output reduction card to back up their effort to pass on the higher energy costs. This could well lead to a situation in which the latest fall in the ethylene reference – C2 dropped once again at the beginning of Q3 by EUR 45/t – will hardly be reflected in the October prices. The only possible exceptions are HDPE pipe grades, where the market is still characterised by a surplus supply situation, and EVA, which could experience another round of the ongoing price correction. Otherwise, however, most negotiations are expected to end somewhere near a rollover.

PP: What could be the superlative of “standing with your back to the wall”? Many converters will not want to think about it when they are already in that position. Production lines are being shut down and entire workforces put on shorter hours, while temporary workers are being sent home – all because demand from end-consumers is stagnating. Over the course of September, quotations for polypropylene compounds gave way steadily, yet producers of some grades were still able to push through energy surcharges. Here, glass fibre products were hit especially hard as prices for reinforcement material gained further momentum. For October, producers have already announced fresh energy surcharges of up to EUR 200/t. These may not be accepted by the market, however, as demand is simply too soft. A rollover looks more likely, along with small rebates for homopolymer. Converters may have to stock up on light-coloured compounds in the coming weeks, to fill orders from the automotive sector. On the whole, demand is still well below expectations, however. The situation is so dire that delivery of completed orders may well be pushed into next year.

PVC: PVC prices continued their downward trend in September 2022, falling for the fifth month in succession. Despite this, the price level remains high: base S-PVC is still 16.6% more expensive than a year ago, while E-PVC pastes are up 18.5% and S-PVC (U) is up 19.7%. In the case of base S-PVC, the combination of a falling C2 price and weak demand on the one hand and exorbitantly high energy costs on the other led to a broad spectrum of transactions in September – extending from sharp drops of EUR 120/t through to slight price increases. All in all, this resulted in price reductions that, on average, were below the pro-rata reduction in C2 costs. The price of compounds and paste also came under pressure in this way, particularly since additives failed to exert any influence in the opposite direction. PVC producers and compounders are thus attempting to offset the decline in prices by curbing production. Since demand is also suffering on account of the increasing fears of a recession, these efforts are having only a limited effect. The measures implemented by suppliers are also being counteracted by the increased inflow of low-priced imports. Against this backdrop, further price cuts can be expected in October. That would then be the sixth month in succession – and given the general turmoil probably not the last month of declining prices.

Styrenics: In September 2022, as in August, styrenics prices continued their nosedive. In the slipstream of the renewed drop in the SM reference (down EUR 287/t), all materials recorded triple-digit price reductions. EPS prices went down particularly fast, with the downward momentum even picking up in the course of the month. Suppliers reacted to the weakness of the construction sector by offering ever more generous discounts that ultimately reached EUR 400/t. In the case of PS – and to some extent ABS – the discounts remained below the cost reduction of the feedstock materials. This was because producers insisted on pricing in the soaring energy costs. Energy costs will also be a factor in the price movements in October. In fact, they have come down again a bit from the lofty heights they had climbed to a few weeks ago. Taking this into account, a producer for polystyrene already conceded a discount despite the styrene reference recording a slight plus of EUR 9/t at the start of Q3, thereby ending the massive decline of the two previous months. Meanwhile, the weak demand for all styrenics means that no rapid recovery can be expected. Fears of recession are scaring off purchasers everywhere, both among processors and end market consumers. Many players in the plastics industry are already looking forward with excitement to the upcoming K 2022 and, above all, to what stimuli the world’s leading trade fair for their industry will provide.

PET: The downward economic turmoil severely impacted the European PET market in September 2022 as well. Despite numerous production curtailments and the rescheduling of maintenance work to an earlier date, European producers were left sitting on their volumes with warehouses beginning to “burst at the seams”. At the same time, low-priced imports were still available but even these frequently remained in the warehouses at the major ports. This is because converters are likewise sitting on high-quality material inventories that were bought when prices were still high, since the outflow to the end markets has been no more than a trickle. In the course of the month, prices thus fell accordingly from one week to the next and, ultimately, the price reductions even extended well into the triple-digit range. October looks set to be a very testing time for all market participants. The prospects are like looking into a dark tunnel with no indication of how long the tunnel actually is. Warehouses are fully stocked everywhere, production is expensive, and demand looks to be very low. Against this backdrop, further triple-digit reductions seem likely.

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 2022: Market in virtually unprecedented state of disruption / Cheap imports from Asia put prices under pressure / More production stoppages in the offing

The European market is in a state of disruption as seldom seen before. On the side of converters, the mood is worsening by the hour as almost nothing is moving forward. More and more engineering plastics material is being imported from Asia that is so cheap that the price spread is reaching absurd proportions. The reason for the imports are the lower logistical costs, which keep the arbitrage window wide open.

In the case of PC, European production was operating with small cutbacks, but output was nevertheless sufficient to fulfil contract obligations. With the benzene contract for October rising EUR 22/t, the lower output rates, in addition to the energy cost surcharges called for by producers, are likely to lead to significant price hikes this month. Imports could nevertheless possibly have a dampening effect.

The main worry as far as the converters are concerned continues to be the very poor demand. In some areas, it has slumped by up to 60%. One of the few exceptions is the lighting sector, which is currently experiencing a small boom whenever the application has something to do with saving energy. The rest of the E&E sector and car production is nevertheless very weak. Because converters are financially barely able to top up their stocks, the number of production line stoppages is expected to rise.

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 2022: Catastrophic month for flexible foam / TDI supply heavily thinned / Demand remains weak / Widely firmer price trends in October

Most of the attention in September was on the precarious supply situation for flexible foam precursors. With plant curtailments and force majeure notifications, only about 30% of European TDI capacity was still available. Processors had to struggle with allocations between 30% and 40% in addition to significantly higher prices. For MDI, on the other hand, the upswing caused by energy surcharges and the falling cost of benzene largely balanced each other out.

Orders for large household appliances and from the construction industry were particularly low. Concerns regarding a recession have once again depressed demand in these areas. Slight impulses for improvement came from the comfort sector, while automobile manufacturing remained weak. This situation will not change substantially in October.

For both isocyanates, producers have not yet fully implemented requests for energy cost adjustments. They will try again in October. For MDI, things will likely come down to a strong rollover, while TDI will see more significant price increases in view of the supply levels.

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 2022: Resins downswing accelerates / Producers want to pass on more energy surcharges / Upward trend for glass fibre in Q4?

In reaction to a decline in raw materials prices and generally weak demand in Europe, ortho resins surrendered considerable ground. In some cases, even large accounts faced minimal increases. With one exception, this is the first noteworthy, and probably the most sustainable, correction since July 2020. The main factor was the again hefty EUR 287/t plunge in the monthly European contract for the principal feedstock styrene, though quotations for other starting materials also gave way noticeably.

Coming out of the summer lull, demand failed to pick up substantially. Converters have been working off inventories as far as possible, ordering the bare minimum. This is making it harder for suppliers to push through higher costs.

As yet, there are no signs that quotations for the four main starting materials are firming. As a result, resin prices may well move farther downward in October. With lower prices, producers could see the moment as ripe to try to pass through a larger share of their increased energy costs and brake the downward momentum. Most buyers, however, will delay ordering in the hope of further deterioration.

The glass fibre segment showed no uniform development in September. Standard chopped strand mats gave up some ground, while direct roving tended firmer. In October, producers will grow increasingly vocal in their calls for higher prices. Reports suggest the supply side will be looking for hikes of 3-5% in their quarterly agreements. Their success will depend on an increase in the currently slack demand.

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 2022: All prices now declining / High energy costs not transferred / First recyclers react with plant shutdowns / Further discounts likely

In Europe, prices for all standard recyclates declined in September 2022. The economic slowdown and increasing fears of recession are depressing demand. In view of this, producers were simply unable to price in the still rising energy costs. Especially in the case of LDPE and HDPE blow moulding grades, brand and consumer goods suppliers switched to low-priced virgin material for products that had not been explicitly advertised for their sustainability.

Because high energy costs are standing in the way of profitable production, some recyclers have already shut down plants. More are likely to follow. This takes excess volumes out of the market but will probably only slow down the expected price drop in October.

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 2022:  More tough negotiations likely in October / Demand still poor to non-existent / Base material increasingly rare, expensive / Threats of plant shutdowns

September was governed by some tough negotiations. Despite recyclers’ attempts to at least keep prices stable, converters mostly managed to obtain small reductions. Black and glass fibre-reinforced materials especially fell to a larger extent because of their dependence on automotive production.

Base material was barely available and also expensive. As long as demand continues to languish at such a low level, there is just about enough material around to supply regular customers. The increasingly visible financial problems hitting converters will also be reflected in their tough stance during the October negotiations. Because a substantial improvement in demand is unlikely, converters should be able to obtain at least some of their targeted reductions.

Overall, both sides have their backs to the wall: recyclers because they are unable to pass mounting costs to the market, and converters because they have little money in their pockets and must count every cent. In fact, some recyclers will also have to decide in the coming weeks whether to cut back production even further or shut down completely because converters’ order books offer little promise of a golden October. Some polyamide recyclate types could see a rollover, but the prices for all the other materials will continue to fall.

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!