Price Reports Abstract February 2013
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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: February 2013 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics in February 2013: Most notations show little change / PE largely rolls over / PP and PVC up slightly / PS and EPS slightly softer / Demand slack / Upturn likely in March
As in January, the European market for standard thermoplastics suffered from a fundamental weakness in demand in February. Consequently, producers were seldom able to hike prices, although PVC and PP did move up slightly. Like feedstock ethylene, most PE materials rolled over, due to lacklustre demand, despite producers' initial calls for hikes of up to EUR 70/t. As EVA was in oversupply, prices declined slightly. The picture for styrenics was mostly the same. However, as rebates for PS and EPS were generally below the monomer decline, producers managed to improve their margins. Supply of almost all polymers was more than adequate, even though significant production cutbacks were still in place. The consistently slack business in the regular European markets could not be compensated by exports as business was slow globally.Demand from seasonal businesses such as building and horticulture remained especially sluggish in Europe, due to the continuing wintry conditions, while southern European business was still largely depressed. Many PE converters have reported increasing imports of inexpensive ready-to-use material from the Middle East. This has enabled them to reduce order backlogs, with a corresponding decline in purchasing. Some converters consequently are talking of extending the Easter holidays. To make matters worse, rising oil prices in February have propelled March contract notations for polymer feedstocks substantially forward again, with ethylene up EUR 50/t and propylene up EUR 55/t. In a first barge contract, settled shortly before press time, styrene monomer (SM) was priced EUR 27/t higher, in reaction to the EUR 14/t rise in the benzene contract notation. Surprisingly, there have been a few unconfirmed reports of polymer producers targeting increases merely matching their higher costs, but many sellers will surely aim higher. This applies to PVC, PS and especially EPS building industry applications.
With the beginning of the maintenance season, feedstock supply is likely to tighten again, so that despite all efforts to plan ahead further cutbacks in polymerisation are a distinct possibility. Following a particularly long period of slackness, business, can be expected to liven up again soon. The building and horticultural segments are emerging from hibernation and converters’ inventories are relatively low. The closer they get to the post-Easter business in April, the more urgently they will need to top up. In the worst case scenario, the boost in demand after mid-March could well coincide with low stock and reduced capacity use at producers. In this case, producers would have no qualms about raising prices considerably beyond the cost component. The chances are good that business in the first and second half of March will develop in two different directions.
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 in February 2013: Distribution market sheds more feathers / Supply restrictions meet with weak demand / Direct business starts to pick up / All signs point to hikes in March
Despite producers and compounders’ cautious approach, supplies usually sufficed to meet demand. In the case of standard POM, the wave of imports has resulted in almost a surplus. Notations were spared further decline not only by longer-term agreements, but also since direct business livened up considerably. Demand from the German automotive sector was surprisingly strong, and the lighting industry also proved lively.
These trends continued into March, and the building industry’s rise from its winter slumber should provide an additional boost. At the same time, feedstock costs have either risen (propylene up EUR 50/t) or have firmed (benzene up EUR 14/t). With many quarterly agreements due to expire soon, the market is heaving with news of prospective increases. This may also have a retroactive effect on March prices for engineering thermoplastics, as some buyers will try to top up before the Q2 price round commences. All signs point to an upswing.
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 February 2013: Slight cost increases passed down the chain / With order volume slack, markets quiet / High price level encourages substitution / Outlook dim
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 in February 2013: Steep hike plans firm the market / MDI and TDI with slight gains
The price gains of EUR 20/t for MDI and TDI achieved in February brought producers of polyurethane feedstocks no closer to their high-flying price goal of a EUR 200/t hike for the first quarter of 2013. Polyols rolled over. Even the higher production costs could be passed on only minimally, if at all. This was despite the fact that across the globe, many plants were undergoing maintenance. Even an additional glitch for TDI did not narrow the market significantly or cause major delivery delays as it was still the off season for many applications. Most deliveries of basic products could be made promptly.
The building industry was still in hibernation in February, which kept demand for insulation grades of polymeric MDI under wraps. Demand for pure MDI from the footwear industry was livelier, and producers of low-end bedding and upholstered furniture, as well as OEM suppliers of automotive seats and roof liners for large-series cars, showed awakening interest.
In the final month of Q1, PU feedstock producers will still be looking to push through their targeted hikes of up to EUR 200/t, despite the lack of success so far and the substantial decline of EUR 113/t in the price of benzene. They may even carry over the targets into the negotiating rounds for longer term contracts in the hope that awakening demand from the building industry and the long production month will put the odds on their side.
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 February 2013: Uneven movement for medium-reactive ortho resins / Slightly higher prices / Long supply / Demand slacker than expected / Glass fibre products stable
In the short production month of February, medium-reactive ortho resins continued in a recovery pattern. However, converters and distributors told PIE that there was no across-the-board rise due to inventory refilling as was seen for thermoplastics. Price movements were uneven, rising and falling at both ends of the scale. A trend was hardly discernible at month’s end. The Plastixx Composites index gained 4 points to close at 1,205 points.
Feedstock movements in February largely balanced each other out. Styrene lost EUR 40/t, while propylene – the starting material for propylene oxide – was in a strong rollover with a plus of EUR 10/t. The Q1 contract for maleic acid anhydride was settled EUR 20/t higher, phthalic acid anhydride EUR 40/t higher. This was hardly a mandate for ortho resins price increases, as producers learned. They managed to achieve only a small part of the targeted increase. Supply was rather long and demand soft, due to wintry weather.
In March, by contrast, resins buyers may have to brace themselves for higher prices. In the US market, producers already have succeeded in pushing through hikes. Europe is still lagging behind, although two major producers have announced increases of EUR 100/t. As expected, the glass fibre products covered by this report showed little change in February against January. For direct roving there seemed to be some scope for decreases at the bottom end of the range.
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 February 2013: Flat notations reflect primary market weakness / Hike plans run aground
Plans by primary market producers in German-speaking Europe to raise prices ran afoul of stable olefin costs (C2 in a rollover, C3 up EUR 10/t) and the decline in styrene monomer (SM) prices (by EUR 40/t) in the first third of February. The sideward movement thus kept any recyclate price momentum to a minimum. Recyclers of LDPE film faced higher procurement costs, so that the rollover ate into their margins. In the rHDPE segment, lower price levels were brought up to scratch but this did not influence the PIE range. Notations for rPP also moved sideways. Producers of rHIPS resisted any pressure from buyers to grant rebates on the back of falling SM prices. The fact that it was the off season for building, agriculture and horticultural applications, along with the Carnival activities in some regional markets dampened order activity. Input material was sufficient to meet demand.
Due to higher procurement costs and the rebates they were forced to offer in Q4 2012, recyclers still struggling with margin losses sought price increases of up to EUR 50/t in February. With the start to the new seasons and the correlated increase in demand in March, recyclate prices can be expected to rise.
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 February 2013: Notations mostly firm / Automotive demand rising significantly
The engineering recyclate markets in German-speaking Europe picked up considerably through January and into February. Alas, it was not enough for producers to push through any substantial increases since languishing virgin material prices quickly put paid to any such hopes. The only exception was rPC, where the primary sector is also characterised by rising prices. The corresponding recyclate thus also rose. On the whole, however, notations were firm and customers were pleased to buy their material at unchanged prices.
Since sales of engineering recyclate have been rising in recent weeks, and although regrinders are running their production lines at full throttle, the current order backlog stands at between four and six weeks. A lot of deliveries have therefore been confirmed for Easter at the earliest. The delay has nothing to do with the availability of base material, still available in adequate quantities. There has also been no change as far as the high price of production scrap is concerned.
The main reason for the upturn in business is the boost in demand from the automotive industry. OEMs active in the small to medium-size car market, which is currently experiencing a crisis, are doing their utmost to keep costs to an absolute minimum, and switching to cheaper recyclate whenever possible. And it appears the substitution works in far more cases than originally assumed – proof, once again, that necessity is the mother of invention.
Even this growing demand, however, does not necessarily go hand in hand with higher prices. After all, the current rise in recyclate orders is borne out of an attempt to use regrind as a structural substitute for virgin material, and not the result of an occasional stopgap for a tight primary market. Despite the lively demand, recyclate prices are held down by stable or weak primary material costs. The current reality could result in a vicious circle: After all, the more successful the switch to secondary material, the greater the effect on orders for primary material, and thus also on virgin prices. On the other hand, recyclers will exploit every opportunity to narrow the gap between secondary and primary material. Their purchases of thermoplastic scrap remain expensive and their margins still worryingly thin.
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!
