Price Reports Abstract March 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: March 2013 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics in March 2013: Producers find it hard to pass on costs / Cold weather, soft markets and reluctant buyers dash hike hopes / Cost reduction and rising demand jockey for position in April
The return of winter threw a large spanner into the works for European producers of standard thermoplastics in March. With increases in the contract reference price for ethylene (up EUR 50/t), propylene (up EUR 55/t) and styrene (up EUR 27/t), producers announced price hikes across the board. In the case of PE, the target was triple-digit. Initially they enjoyed some success, but mostly the goals eluded their grasp. Margins on polyolefins and EPS dipped again as producers netted gains of only EUR 10-30/t. For PS and PVC, the price rises just about managed to cover the higher production costs.Supply was more than adequate, despite the many capacity cuts, maintenance turnarounds and individual disruptions. There was no sign of any bottlenecks, due mainly to the frozen demand from weather-dependent industries such as construction, horticulture and agriculture. As if that were not enough, the overall economic situation continued weak. When sinking petrochemical notations were added to the mix at mid-month, many buyers were convinced that the only way for prices to go was down and thus restricted purchases to the minimum. Overall, demand declined to a greater extent than supply.
As expected, feedstocks slipped quite significantly in April, with ethylene dropping EUR 60/t, propylene EUR 50/t and styrene EUR 64/t. Unofficially, polyolefin producers are out to secure a rollover this month, but the absence of official announcements up to now is evidence of their uncertainty. Depending on how demand – and the weather – develops going forward, April is likely to end somewhere between a margin-improving rollover and a full pass-through of the feedstock benefit. PVC producers have also been talking a rollover, whereby compounds are slightly more stable, due to rising additives prices. PS producers already have announced a price reduction of EUR 40/t, which could provide a little cost relief. EPS producers are hoping to benefit from an extremely compressed insulating season in the construction industry, due to the long winter delay. This could enable them to obtain a rollover and an urgently needed margin increase.
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 March 2013: Rollover dominates / ABS and PA 6 weaken / POM slips amid mounting pressure from copolymer imports / PP lifted by higher C3 window / All signs point to rises in April
Despite numerous production cutbacks, supply generally sufficed to meet the sluggish demand. There even were occasional reports of surpluses, including for basic POM grades. Natural ABS was also readily available.
Demand was affected not only by medium-sized buyers’ speculative reluctance to order, but also by the wintry chill that effectively put all construction-related activity on ice. Despite the fall in the number of new car registrations and the economic malaise in southern Europe, automotive orders were surprisingly solid – perhaps also an expression of the rising use of plastics in some new model generations.
Producers are planning to exploit this drive to lift prices not only in April, but for the entire second quarter. Benzene-driven PC and PA 6 products especially are suffering from the consistently high cost of this key feedstock. Despite the decline of recent months, benzene prices still hover above the EUR 1,000/t mark, a situation that has yet to be reflected in the corresponding polymer notations. During the course of Q1, producers endeavoured to control their output rates and hope this effort will now yield results. At some time or other, they say, even the most stubborn customers will need to reorder. On the other hand, falling petrochemical prices – propylene down EUR 50/t and benzene down EUR 62/t in April – will not aid their campaign. It remains to be seen whether their customers will consent to even minor price rises.
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 March 2013: Sinking feedstock costs pull polymers down further / Imports continue to swell supply / Strong resistance to buying / No change likely in April
Little is expected to change in April. Even if after Easter spring finally does arrive, sinking production costs and oversupply conditions will pressure PET producers’ selling prices 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. To read the entire report, go to www.pieweb.com and sign up for a 48-hour free trial!
Polyurethane feedstocks in March 2013: MDI and TDI sideways / Olefins pull polyols up / Prompt supply despite maintenance / Weather pressures demand / Building season and new quarter could drive
In the final month of Q1, producers of polyurethane feedstocks had no more luck lifting prices than in the first two months. Only pure MDI made modest gains. Polymeric MDI rolled over, as did TDI. The EUR 55/t rise in the cost of propylene (C3) and the EUR 50/t increase for ethylene (C2) propelled polyols EUR 30/t higher.
Despite the many maintenance turnarounds, supply was adequate for the lingering winter season. The impending maintenance at major polyol production facilities began casting its shadow in the form of higher C2 and C3 spot notations.
The persistent cold weather dashed any hopes producers may have had of awakening demand. Call-offs of polymeric MDI and polyols were below expectations. TDI and flexible polyols, by contrast, enjoyed lively demand from the automotive sector.
Most producers of PU starting materials plan to leverage the beginning of the second quarter for substantial price increases. They will be looking to add EUR 250/t to long-term contracts. The beginning of the building season could provide an impetus. Also, the long production month of April with 21 working days will require sufficient inventories, and in parts of the chain product may be thin on the ground due to maintenance. All in all, limited supply meeting increased demand could drive prices upward.
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 March 2013: Market moves into higher gear / Glass fibre and standard chopped strand mats show surprising momentum / More of producers' targeted price hikes likely to go through
Due to the prolonged winter, demand for composites is only just beginning to bud. But with Easter behind them, most converters have started to drop their scepticism. “Demand is not taking off like a rocket, but it is gradually moving into high gear,” one player told PIE.
The beginning of March brought more momentum to the market, thanks to the stability of ortho resins and the glass fibre products covered in this report. The number of visitors to the "JEC Composites Show" in Paris / France was down considerably against prior years and thus provided less orientation than usual. Rumours circulating at the show hinted at capacity cuts at some resins producers who in the face of weak demand did not want to produce for inventory.
Notations for medium reactive ortho resins continued to move sideways despite the many announcements of price increases since the beginning of the year. Only a small portion of the announced hikes of up to EUR 150/t went through in February. The warmed-over calls in March were probably more a reminder to buyers than a fresh upward trend.
With a rise of EUR 55/t, propylene led the feedstock price upswing in March. Styrene monomer added EUR 27/t. Phthalic acid anhydride took another EUR 15/t step forward, culminating in a Q1 price upswing of EUR 100/t. Maleic acid anhydride lost some ground in the US market in April, following a period of stability in March, but similar signals have not been seen in Europe. All in all, the raw materials side seemed to be paving the way for downstream price rises at the beginning of the second quarter. However, as April started the trend appeared to be pointing downward.
Prices for glass fibre products also remained stable in March. The sole exception were standard grades for chopped strand mats, which rose at the upper end of the range. The PIE Plastixx Composites index rose by two more points to 1,207.6.
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Standard Recyclate March 2013: Strong rollover in shadow of rising virgin prices / Slight upwind for rPE and rHIPS / rPP sideways / Input costs higher / Season starts will boost demand
In the shadow of rising notations for ethylene (C2, up EUR 50/t), propylene (C3, up EUR 55/t) and styrene monomer (SM, up EUR 27/t), virgin material was caught in an upwind. The price gap to secondary polymer initially widened before later making some ground good. Producers of primary material sought price increases that included a margin component but in view of the impending turnaround in direction of feedstock notations they had difficulty pushing these through.
Recyclers also wanted to put some meat on their bones after the lean winter months of high procurement prices, but were not extremely successful. The PIE range for natural, translucent or brightly coloured rPE film rose by EUR 10/t, while rHDPE pipe grade added EUR 20/t and rHIPS EUR 5/t. For all recyclate types, including rPP, there was no change.
Demand was improved against the rather weak February as the awakening seasonal industries provided a boost. Base material was ample, even if more expensive. Ordering of rHDPE pipe grade was especially brisk.
Expecting higher primary prices to put pressure on their bottom line, recyclers have announced hikes of as much as EUR 50/t. They expect the seasonal kick-off in the building, horticulture and agriculture sectors just after Easter to tighten availability, and in the event of bottlenecks only those buyers willing to pay higher prices will be supplied, some have categorically told PIE.
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 March 2013: Primary market price hikes drive triple-digit increases for rPA and rPC / rABS, rPOM and rPP remain stable / Brisk ordering / Rises in base polymer costs will continue in Q2 / Further price hikes in April
The engineering recyclate markets in German-speaking Europe picked up considerably through February and into March. Producers were rigorous when it came to slapping direct buyers with a large proportion of the price increases announced for Q1, which almost immediately impacted base polymer prices. Recyclers responded by raising by EUR 100/t the price of those secondary materials most affected by the increases, namely rPA 6 and rPC, and even called for up to EUR 150/t more for rPA 6.6. Depending on the quality, regrinders often had to pay more for plastic scrap used to produce rABS, rPOM, rPC/ABS and rPP compounds, although they have not yet been able to pass this on to their customers.
Generally speaking, there was enough production scrap available although sorted material especially tended to be more pricy than in February. Although most recycling lines were operating at full speed, there were still occasional delivery delays due to the solid demand.
This strong demand was largely the result of the urgent need for automotive OEMs to economise, although efforts to build up stocks of finished goods for building products also prompted brisk business among secondary suppliers.
The Q1 upswing in freely negotiated primary prices could impact longer-running order agreements at the beginning of Q2 as well. Recyclers fear that even the plastic waste so far left untouched by the wave of base polymer price hikes could be affected, too. Depending on how large the rises are, regrinders will also launch a new round of price increases, several of them told PIE.
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!
