Price Reports Abstract November 2012
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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: November 2012 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics in November 2012: Autumn mist softens notations / Producers see fresh margin losses / Supply stabilises / December could see an unusual stabilisation
In Europe, November was generally damp and drizzly as usual, and this year the standard thermoplastics market reflected the weather conditions. With feedstocks declining slightly – ethylene by EUR 15/t, propylene by EUR 20/t and styrene by EUR 5/t – producers' hopes of a rollover quickly disappeared into the fog and – as in October – margins saw moderate declines. Polyolefin prices fell by around EUR 50/t, PVC by around EUR 25/t. Styrenics dipped by up to EUR 30/t, as the building season waned.Despite production cutbacks and higher demand sparked by lower prices, supply was generally adequate with a continuing slight tendency toward a surplus. Major exceptions were products sold predominantly to leading retroactive buyers with bonus contracts, especially for LD/LLDPE film. Not only the relatively low prices compared with the rest of the year were a factor. The volume targets for agreed bonuses and, for German converters, the unexpected chance to cash in paybacks under the Renewable Energy Sources Act (EEG) led to an order boom. Headed into December, some producers even stopped taking orders. Apart from these special circumstances, demand remained lacklustre, reflecting the continued economic weakness.
In many segments, trading activity this year may be unusually strong for a December. Despite stable ethylene prices, many PE producers have sensed that this might be a good opportunity to try to push polymer prices forward – by as much as EUR 80/t. Some of the targeted hike could certainly go through. In view of the rather dim prospect of feedstocks moving substantially higher in the new year, producers are in a fighting mood. It could be difficult to hike prices in January. December's propylene contract fell by a further EUR 17/t, and a rollover appears to be the most likely outcome for PP. The end to the building season is putting pressure on PVC and EPS. Unlike PS, the expandable grade will not be affected by the expected cost rise in the aromatics chain, where benzene has once again reached a new record high. At present, it looks as if there will be few of the usual pre-Christmas bargains for last-minute buyers.
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 November 2012: Subdued demand depresses notations / Adequate supply despite production cutbacks / Rising imports of standard grades / Little change expected for December
Despite a few production cutbacks, supply was generally adequate with a tendency towards a surplus. For one, the arrival of imports of standard-grade material did begin to make itself felt. In addition, demand also remained rather subdued. In the automotive sector in particular, the significant sales decline was accompanied by suppliers’ efforts to empty their stocks ahead of the annual stock-taking. After all, in a business where costs play such an important role, no one can afford to sit on lazy working capital. But other industries, too, are stagnating.
There is thus little prospect of any excitement in December. Although production will come under increasing cost pressure due to the new record price of benzene – up EUR 58/t to EUR 1,084/t – converters are not particularly bothered in view of the fact that their end markets are so quiet. There is speculation that the odd special offer may appear on the market between Christmas and New Year, but little enthusiasm about such prospects. Although some players expect ordering activity to pick up in the new year, there is little sign of a boom. All in all, the outlook for Q1 2013 remains relatively glum.
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PET November 2012: Producers strive to defend notations / Rollover the rule / Slight rebates for large accounts / Oversupply despite capacity cuts / Market likely to continue depressed in December
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Polyurethane feedstocks in November 2012: Slight uptrend for TDI, rigid polyols / Weak rollover for MDI, flexible polyols / Maintenance helps cushion demand softness / Prices could stay firm into New Year
The EUR 150/t price hikes sought by producers at the beginning of Q4 did not have a broad effect on the European market for polyurethane components. Although producers did their best to improve their margins, it was to little avail, as the slight downtrend in notations for propylene (C3) and ethylene (C2) undermined their efforts. Benzene made minimal gains but the EUR 34/t advance for the key aromatic was insufficient to fill the gap left in October. The supply side did manage to pull up the low price levels that had been tolerated previously for TDI and rigid polyols, but MDI and flexible polyols saw a weak rollover.
Throughout much of the second half of 2012, inventory draw-downs dominated the market picture. As many plants were undergoing maintenance, the shorter supply was relatively well adapted to the softer demand. As in the recent past, demand last month was stimulated mostly by buyers in eastern Europe as well as in emerging markets of the Middle East and Africa.
More out of wishful thinking than anything else, PU feedstock producers reiterated their goals for Q4 in December. In the meantime they have adjusted their sights to the lower demand. Worldwide, maintenance turnarounds have been extended into January. The minor increases in raw materials costs have given producers a little hope that maybe here and there low-lying notations could be brought up to scratch. This is likely to happen only rarely, however. Most prices in December will probably see a rollover.
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Composites/GRP November 2012: Medium reactive ortho resins and glass fibre products unchanged / Supply and demand in balance with slight tendency toward surplus / Just a single call for hikes in January
The PIE price range for medium reactive ortho resins remained unchanged in November. Some products for some buyers saw slight movement, both at the top and the bottom ends, but these were too insignificant to be reflected in the table.
Notations for the main products styrene and propylene monomer (for monopropylene glycol) remained nearly stable in November. SM gave up EUR 5/t, propylene EUR 20/t. This was too little to make a case for resins price hikes, so that stability up to year’s end looks assured. Supply of ortho resins was long. Market players with whom PIE spoke reported no bottlenecks or delivery delays.
Glass fibre of all types also showed no price movements. Neither were there any delivery delays in November, as there were in a few cases in October.
The onset of winter is dampening the mood in many customer branches. Demand from the automobile industry is weakening. The number of new passenger cars sold in western Europe is predicted to decline by around 9% in 2012 to 11.7m vehicles. From a global perspective, China and North America could even out the score, but Europe will remain a difficult market.
The building industry, which had shown growth of nearly 4% up to the third quarter, has been losing momentum since the beginning of Q4. By contrast, the wind energy sector, which had shown slower growth over much of the year, has been more dynamic recently, due to several new large projects.
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Plant shutdowns and job cuts at large automotive and commercial vehicle producers made it difficult for resins producers and formulators to raise prices. Order volume at OEM suppliers was not especially lively. Some players told PIE that agreed purchases had been cancelled. Deliveries could be made mostly on time and there were no reports of restrictions on production.
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 November 2012: Dramatic declines for transparent material / Oversupply and seasonal weakness pressure rHDPE and rPP / rPS stable / Production cuts aimed at forcing rollover
The expected crash in primary market notations failed to materialise in early November, only a slight downward correction similar to October. This does not mean that the weakness in the virgin segment did not influence recyclate, however. The lighter rLDPE grades that compete with off-grade and basic virgin material saw declines of up to EUR 40/t. For darker, extrusion or injection moulding grades the existing gap to primary material helped keep notations in a holding pattern. Within rHDPE, blow moulding recyclate saw the sharpest decline, of EUR 45/t. Pipe and injection moulding, in a weak rollover, lost EUR 15/t. In line with primary market developments, rPP dropped EUR 20/t, while rPS remained stable.
Supply was balanced to long, with HDPE, PP and PS recyclate especially well balanced. As a rule, seasonal weakness could be balanced by reducing output or building inventories in advance of maintenance. By contrast, rLDPE moved into surplus as demand sank by up to 20%. On the whole, apart from the non-industrial packaging segment and some seasonal PE and PP grades for the waning building or agriculture applications, recyclate demand held up relatively well.
Procurement costs for secondary suppliers remained high. At the same time, the receding likelihood of a primary market crash has relieved pressure. For the last month of the quarter and the year, recyclers are urging discipline in holding onto a rollover. Rather than see prices crumble through margin-decimating concessions, they would prefer to see any surplus material transferred to reserves. Therefore, they are unlikely to make any concessions.
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 November 2012: Most grades roll over / Weak primary market pressures rABS and rPC/ABS / Orders decline considerably / Early production shut-downs aimed at supporting rollover
Mirroring the scene on the primary engineering polymer market, buyers of recycled engineering thermoplastics also reduced their orders quite considerably in November. Following the course set during the summer, buyers hung on to their strategy of working off stocks, which saw unusually slow sales of regrind material during the penultimate month of the year. To avoid even the possibility of a surplus, regrinders began cutting back on their base polymer purchases and increasingly bought just enough to meet existing orders but not to fill their stocks. With the exception of rABS and rPC/ABS, this tactic allowed them to carry over October’s notations for PA 6, PA 6.6, POM, PC and PP recyclate into November. Price battles caused by an abundance of primary ABS material also brought regrind materials down and the PIE ranges for rABS and rPC/ABS responded with small downward corrections of up to EUR 50/t. Since the cost of production scrap generally remained unchanged, recyclate margins took yet another blow.
Supply of recycled material was generally well balanced, at least with lower-grade material. However, while there was mostly sufficient standard production scrap, sorted PA 6.6 and POM grades were more difficult to come by. Nevertheless, most materials were delivered fairly promptly. The full effects of the cost-cutting measures and production cutbacks car makers had announced in Q3 could be felt in November, but did not reach the catastrophic level that some market players had predicted.
Several customers told their recyclate suppliers that, due to a lack of demand from the downstream markets, they would not be producing during the upcoming holiday period. To avoid amassing any surpluses, many recyclers will therefore switch off their production lines on 20 December and will conduct maintenance works on their lines before resuming production again in the first week of January. That means they will have to put their customers on allocation, with material only sold at the same price level as in November.
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!
