Price Reports Abstract August 2013
|
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: August 2013 |
|
|
Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics August 2013: Notations rise on a broad front and exceed costs / Demand in summer holiday season driven by pre-buying / Substantial increases likely in September
In August, most European buyers of standard thermoplastics had to accept price increases slightly above the cost rise for the respective monomer, which was EUR 40/t for ethylene, EUR 50/t for propylene and EUR 47/t for styrene. Producers were able to bask in the sunshine of their success, leveraging the widespread production cutbacks to achieve small to moderate margin gains. While small and medium-sized converters tended to hold back, larger buyers seized the chances to stock up in advance of expected further price increases.The fairly tight supply situation due to the output cuts of previous months was worsened by outages and maintenance turnarounds at a number of European crackers. As demand in many market segments was normal and even picked up towards the end of the month, availability tightened.
Due to the crises in the Middle East, especially the civil war in Syria, petrochemical prices rose significantly at the end of August. At press time, this had led to rises of EUR 60/t for propylene and EUR 85/t for styrene. The ethylene contract was fixed on 3 September at EUR 1,260/t following protracted negotiations (see PIEWeb of 03.09.2013). Many market players had feared that the general uncertainty would trigger a triple-digit rise.
In September, polymer production is likely to continue on a low flame, and not much import activity is expected. Especially as Italy and France will be returning from their summer break, and business in NWE generally picks up in September, supply is likely to be tight even if a good deal of the potential increased in demand was absorbed by the August pre-buying activities. All indicators point to further substantial polymer price increases on a broad front, possibly well in excess of the monomer cost increases.
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 August 2013: Still little movement with most types / PP compounds up due to C3 / Cost increases rattle foundations in September / Upward pressure set to rise
The big exception were the commodity-related PP compounds. With the EUR 50/t increase in propylene, there were frequent window changes with contracts tied to C3. This quickly also led to hikes in the freely negotiated orders.
Despite production cutbacks, output was usually sufficient to meet what was still quite a lively demand despite the summer holidays – even with PA 6.6, where maintenance turnarounds and an FM are nominally affecting production quite significantly.
In August, the situation in the Middle East trouble spots such as Egypt and Syria worsened and led to uneasiness in the upstream petrochemical segment. The September propylene contract was fixed at EUR 60/t above the August rate, and the consequences for PP compounds will soon become apparent. Benzene went up by a more moderate EUR 31/t, but there is still a clear change of direction. Styrene spiralled by EUR 95/t. Because butadiene also seems to have bottomed out and has now moved up by EUR 25/t, ABS prices will come under considerable pressure. With PA 6.6, the market situation is tending to nudge prices upward, but with the other engineering thermoplastics, the final month of Q3 is likely to end on a fairly stable note. However, the arrival of the year’s final quarter just might trigger a few price skirmishes.
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!
PET August 2013: Moderate erosion despite firm input costs / Market balanced at weak level / Imports slack / Middle East crisis continues to drive costs
In the final week of the month, uncertainty over the development of the Syrian conflict drove notations for oil and petrochemical derivatives upward and this will have consequences for the PET chain. If demand remains stable, output continues tight and imports modest, prices look likely to rise in September.
The direction of production costs in August is not yet clear, though moderate rises seem likely, due to higher oil prices. Thus, it remains to be seen whether PET producers pass on any higher costs. Much will depend on the weather-related seasonal demand. At the moment, it does not look as if producers will succeed in substantially adding to margins as the market is not completely back in balance.
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 August 2013: Bottoming out of prices for TDI and polyols / Polymeric MDI in rollover / Short supply of pure MDI drives notations / Demand remains weak / Cost increases foreseeable
Despite a rather liquid market situation, the notations for polyurethane feedstocks have consolidated into wide-ranging stability for the month of August. Feedstock cost development had no impact on pricing. Even though the price of benzene continued to erode, the notations for polymeric MDI were adjusted upwards. For pure MDI, producers tacked on as much as EUR 30/t to the price. Even TDI, with a weak rollover, returned to normal. Prices for polyols oscillated around a rollover, despite a significantly more expensive cost base.
All polyurethane feedstocks lost order momentum during the peak summer holiday month of August. Due to several unplanned production cutbacks, the supply of MDI still remained weak. TDI and polyols were readily available despite cutbacks and numerous restrictions on intermediates. Demand tended to be rather weak primarily stemming from the many companies in downstream markets taking their traditional summer holiday breaks.
The political unrest in several regions of the Middle East is having an impact on petrochemicals upstream. Since the end of July, the production of polyurethane feedstocks – primarily key aromatics benzene and toluene as well as C3 and C2 – on the European spot markets with an increase of up to 6%. Apart from the previously compressed producer margins, similar increases in the contract references for September will, at the very least, be passed on by producers. With a stable supply, alone the typical post-summer holiday refilling of stocks will potentially lead to a better balanced market situation, which naturally bears the risk of a price hike.
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 August 2013: Ortho resins downslide bottoms out / First hike announcements expected in September / Demand recovering / Glass fibre products unchanged
In August, notations for medium-reactive ortho resins gave way by only EUR 5/t, at the top end of the PIE range, but this does not tell the full story of price movements. At both ends of the range there was some momentum, which reflected producer – largely unsuccessful – efforts to gain increases and the presence of cheap material in the market. The fact that most of the momentum was seen at the upper end last month, as players told PIE, appears to indicate the downslide in resin prices has ended – thanks in particular to the solidly firming cost of starting materials styrene and propylene (monopropylene glycol). Glass fibre products – including both chopped strand mats and direct roving – remained stable in the second month of Q2, as expected.
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 August 2013: Third round of primary material price hikes continues to have little impact on secondary market / Only occasional increases / Tight primary segment stimulates demand for regrind material / Substantial price hikes targeted
The third straight month of price increases on the primary market has had virtually no impact on standard recyclate notations in August. There were small increases of up to EUR 10/t for some LDPE film grades and EUR 15/t for rPP, but there were also one or two reductions in the portfolio for rHDPE materials, where prices slipped by an average of EUR 10/t. Recycled HIPS was the only product to see any significant increase, moving up EUR 30/t. However, as the virgin material went up in price by an average of EUR 55/t in August, the price gap to the regrind material widened.
As every year, regrinders reduced the number of shifts or switched off production lines completely for maintenance work during the summer holiday season. As a result, the supply situation was described as “poor to normal”, and only occasionally as “good”. In most cases, however, there was sufficient base material available to meet what was still a respectable demand for the summer holiday season.
Due to mounting primary prices, demand for regrind material rose despite the typically slack summer months in Europe. Encouraged by a surprisingly large number of incoming orders, and in view of their depleted margins, regrinders will aim to win price increases in September in line with those for the primary material. They told PIE they will target hikes of at least EUR 20/t. When it comes to pushing these adjustments through, the tight situation on the primary market will play increasingly into their hands and there is a very distinct possibility that recyclate suppliers will win substantial increases in the final month of Q3.
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 August 2013: Summer holiday season puts pressure on rPC and rPOM / Adequate availability of base material / Demand robust for time of year / Stock replenishing activities and higher costs could drive up prices next month
In contrast to the start of the annual summer holiday season, when business was brisk and made a very solid impression, there were distinct signs of weakness on the engineering recyclate market in August. Sales of both rPOM and rPC have slowed down and secondary sellers have been trying to breathe more life into the market by granting concessions of up to EUR 75/t. With all other recyclate products, last month’s notations carried over into August. In some cases – such as rPP compounds – regrinders once again had to pay more for their base material.
The supply situation was fairly normal for a summer month, though there was plenty of material on the market for rPOM and rPC, due primarily to pressure from imports of standard primary material. There was just about enough production scrap available to fill recycler needs as demand has not really suffered from the summer dip as much as it had expected.
However, in the next few weeks, recyclers anticipate a boom in ordering activity as companies returning from their summer holidays – especially in Southern Europe and France – start replenishing their stocks. Secondary sellers expect their stocks to evaporate quite quickly and they are confident they will be able to return their low recyclate prices to their early Q3 level. In some cases – with rPP-C compounds – the cost of production scrap is rising again, albeit fairly slowly. Thus, engineering recyclate could become slightly more expensive in September, depending on the desired specification.
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!
