Price Reports Abstract February 2012
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Articles: February 2012 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics in February 2012: Polyolefins see triple-digit rises as margins improve / PVC producers also enjoy some margin relief / Styrenics reach limit / Olefin costs will rise again in March
No European buyer of standard thermoplastics could claim that life in February 2012 was boring. Producers made resourceful use of the rapidly climbing feedstock prices – ethylene was up EUR 99/t, propylene up EUR 90/t, and styrene monomer (SM) up EUR 120/t – as a lever to push through price hikes and increase margins. Although, at the end of the month, the rise was perhaps not quite as big as seemed likely when tensions were running high in mid-February, the majority of polyolefin and PVC producers managed to grow their margins by adding in EUR 20-40/t more than the cost increase. Only styrenic polymer producers generally failed to lift prices by more than the cost rise, and sellers of EPS insulation grades did not even manage that.
While supply appeared to be pretty well balanced at the beginning of the month, the rapid onset of icy weather hit PVC especially. Additionally, C4 grades of LLDPE became tight in the second half of the month, a situation made worse by the absence of imports. For other PE materials, it was more of a psychological shortage, as a number of producers stopped taking orders without any real production problems. In this market, too, there was very little surplus and no significant reserves. PP feedstock became tighter over the month, due to technical problems and increased exports to North America, where C3 prices were exploding. Styrenics continued long, mainly because sales of XPS to the building industry were at a virtual standstill.
Demand was generally good, due to pre-buying, although it was not helped by the inactivity of strategic speculators who had stocked up early in January. Apart from that, producers ensured that there was not too much material around to undermine their March price drive. The end markets were fairly strong. Particularly in mid-February, some buyers were seen to be ordering at short notice as a hedge against further increases feared in March. All in all, business did taper off toward the end of the month.
Against the background of financial market turbulence and its repercussions for oil and petrochemical markets – additionally fanned by the events surrounding the latest Iran crisis – spot notations for naphtha as well as ethylene (C2) and propylene (C3) derivatives continued rising in February. The C2 contract for March was finally fixed EUR 86/t higher, while C3 was up EUR 90/t. Producers responded quickly with calls for increases of EUR 150/t for PE and EUR 85/t for PVC. The first styrene contract, announced just before press time, rolled over. Little change is expected in the supply situation at the beginning of March. PVC is still tight, while styrenics are long. Imports, say market insiders, will not make any real impression before the second half of the month. The euro has stabilised, and prices are high, making Europe more attractive again.
As regards demand, March is a long month without any bank holidays, and converters are likely to feel the impact as their customers begin producing for the agricultural, building and beverage seasons. The high prices could perhaps dampen demand, particularly as business could liven up considerably after Easter. By then, however, producers want to have feathered their nest, as they generally fear that demand this year will be relatively quiet. There is little doubt that prices will continue to rise in March, but it is difficult to say whether producers will succeed in improving their margins any further.
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.
Engineering Thermoplastics in February 2012: Situation relatively calm / Long-term agreements ease pressure / ABS and PP compound prices on the rise / PA and PBT surging / Rate of price increases likely to quicken
Protected by longer-running quarterly or half-yearly agreements, many European engineering thermoplastics buyers were able to shelter from the storm of high-priced feedstocks in February 2012. Had the negotiating cycles been shorter – as many players involved in the engineering polymers business have repeatedly suggested – skyrocketing benzene prices in January and February certainly would have given many converters a tough time. As it was, however, only ABS and PP compounds responded to the turbulent petrochemical and standard polymer business.
There were also occasional rises for PA 6 and PBT materials, but elsewhere prices have so far stayed put. There were no extraordinary events affecting supply in February. Imports were few and far between, as European production rumbled along. More specialised materials still take longer to deliver, but by now buyers have grown accustomed to having to wait up to eight weeks.
Demand was stable, and – despite all the doomsday prophecies of last year – automotive is particularly lively. Business in southern Europe’s E&E sector also picked up.
Heading into March, the situation could become much more unpleasant across several segments as the upcoming Q2 price rounds are sure to ruffle some feathers in the thus far more protected market niches. On the other hand, the high benzene price – one of producers’ key cost-hiking arguments – is beginning to wither: March’s notation was down EUR 52/t. By contrast, butadiene did another volte-face, rocketing by EUR 250/t, and after the brief winter lull has now returned to last summer’s all-time high. Rising petrochemical prices are sure to leave their mark on most of the monthly negotiated contracts, particularly in view of the fact that a big storm is brewing in the olefin chain, which is likely to affect engineering polymers, too.
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.
PET February 2012: Notations follow feedstocks upward / Strong worldwide demand growth keeps import volume down / Beverage season casts its shadow / Further upward price momentum likely in March
As in January, European producers of PET packaging resins had no problems passing their higher costs for PX and MEG feedstock down the chain in February. In the process, they were able to lift the bottom end of the price range to a level they found more acceptable. The outcome in some cases was a triple-digit increase in resins prices. The upper end of the scale, which moved steeply upward in January, saw scant further momentum.
PET selling prices were high worldwide in February. Consequently, imports into Europe slowed to a trickle. With some European production lines being operated at lower capacity, many converters hastened to order early for the beverage season so as to be assured of supply. In the monthly balance, just enough material was available to meet demand. Some producers may have been dipping into reserves, however. Market players with whom PIE spoke unanimously forecast fresh price hikes in March. With monthly feedstock contract prices not yet fixed, the extent of the rise is not yet clear, however. While it seems certain that producers will seek margin improvement, converters’ pre-buying activity over the past weeks could put pressure on the price level.
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.
Polyurethane feedstocks in February 2012: Notations rise across the board / TDI gains further momentum / MDI and polyols also move forward / Robust demand for flexible polyols / Supply and cost issues drive
Exploding raw materials costs and frosty weather drove prices for polyurethane feedstocks briskly forward in February. Even polymeric MDI, used in applications currently in seasonal hibernation, added EUR 80/t. Pure MDI, profiting from substantial global demand, rose by a triple-digit margin. TDI producers almost managed to pass through their cost increase of EUR 90/t for toluene. Flexible polyols added EUR 75/t, outpacing gains made by the rigid grades.
Bottlenecks caused by ongoing production cuts and maintenance turnarounds for MDI and TDI plants as well as a force majeure for TDI in France diminished supply for PU components in February. At the same time, propylene was snatched away by manufacturers of monopropylene glycol used in de-icing chemicals, putting pressure on flexible polyols supply.
It was as if someone had set the alarm clock for manufacturers of shoe soles, upholstery and bedding to wake up, commentators said, remarking on the sudden revival of demand from these market segments at the beginning of 2012. The higher order volume benefited the related MDI grades, but especially buoyed TDI. Automotive demand propelled flexible polyols, while the slack building season held down orders for polymeric MDI and rigid polyols.
MDI producers were as yet unable to pass on all of their higher production costs incurred in the first two months of 2012, so that fresh price initiatives can be expected. Producers’ targeted rise of EUR 150-200/t for longer-term contracts could stir up the market around the end of the quarter. TDI producers in turn have their market fully under control and buyers will hardly get by without an increase of up to EUR 200/t, especially for accounts at the low end of the price chain. Access to starting materials will be a determining factor in the polyols segment. It will be difficult for buyers to parry planned hikes of around EUR 150/t.
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.
Composites/GRP February 2012: Ortho resins again make slight gains / Momentum looks likely to hold up through H1 / Direct roving under considerable pressure / Demand stable for most products
The twin influences of consistently rising propylene and styrene prices, along with overcapacity at resins producers, nearly cancelled each other out in February. The medium-reactive ortho resins covered in this report initially saw only slight upward momentum, and for the most part the upper end of the PIE range was stable. However, there were signs that the tightness of propylene could soon put upward pressure on notations for some products. The lower end of the range, where feedstock prices play a stronger role, consolidated. Most buyers found it hard to avoid price increases.
In February, the styrene contract reference price rose by EUR 120/t. In reaction to market tightness and strong demand from North America, the propylene contract added EUR 90/t. The joint venture Sasol-Huntsman declared force majeure for maleic acid anhydride from its main site at Moers / Germany, but this influence will not be noticeable until the Q2 contract is settled. Phthalic acid anhydride prices remained unchanged.
Glass fibre products – especially direct roving – are under considerable pressure. Prices have now moved back to the level prevailing before EU anti-dumping duties were imposed against Chinese imports. Notations for some products are even lower, despite the duties. It is yet unclear how long this situation will be tolerated by European producers.
Demand remained stable across all market segments in February. The still comparatively sluggish demand from the automotive sector was balanced out by an uptick in orders from the building industry and other industrial sectors.
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.
Standard recyclate February 2012: Upward momentum across the board / Primary market price surge pulls secondary sector out of the dregs / Rapid draw-down of inventories / Fresh hikes a strong possibility
The downward trend in prices for recycled standard thermoplastics in German-speaking Europe was halted at the start of 2012 before turning completely on the back of the primary market upswing and surging by as much as EUR 30/t. This applied for the most part to higher grade products or materials in close competition with virgin polymer. Basic grades of standard recyclate generally rolled over.
There was no noticeable tightness in the well-supplied market from mid-January to mid-February, although it looks as if the inventories were shrinking on the back of higher demand. As soon as buyers got wind of the upward momentum on the primary side, order books at secondary suppliers began to swell. Demand for basic material for outdoor applications was quiet, due to the icy weather.
The only way is up! This seems to sum up the direction secondary market prices are expected to take in the coming weeks. Due to higher notations for virgin material, recyclers’ procurement costs will rise, too. Their inventories also are melting fast as converters continue to scout for cheaper polymer. Recyclers are now seeking price hikes of about EUR 20/t, with the more optimistic pushing for triple-digit increases. These could be on the horizon, although not before mid-March. In the meantime, rises of around EUR 50/t seem plausible.
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.
Engineering recyclate February 2012: Anticipated primary market increases coupled with product shortages drive ABS and PA 6 recyclate up / Rollover dominates elsewhere / Supply and demand stable at a high level / Feedstocks continue to rise
As in January, the prices of most recyclate materials sold in German-speaking Europe stayed put at the same level at which they hovered between mid-January and mid-February. The only exceptions were rABS and natural rPA 6 grades, which were driven higher by the substantial hike in virgin material. In both cases, the situation was exacerbated by the shortage of production scrap.
Demand remains good to very good, although it fell slightly short of the lively ordering activity registered in the first half of January when buyers – mostly from the automotive and E&E sectors – had to replenish their empty stocks. Recyclers were generally able to meet demand without problem, with the exception of rABS and rPA 6, as mentioned before. As several larger producers began pushing for higher styrene copolymer prices in mid-month, demand slowly began to pick up on the secondary market, too, with recycled PC/ABS beginning to feel the effect.
The latest feedstock contracts point to further increases. February’s styrene contract reference price rose by EUR 120/t – the same amount as in January. Benzene rose by EUR 116/t, just slightly less than in the preceding month. It should come as no surprise, therefore, that recyclers predict a significant rise in the cost of primary products, which will, in turn, filter down to their raw 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.
