Price Reports Abstract October 2012
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Articles: October 2012 |
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Standards Thermoplastics |
Engineering Recyclate |
Standard Thermoplastics in October 2012: Slack demand pressures polyolefins / Cost pressure eases / Only PS makes slight gain / More price concessions likely in expected slow November trading.
European producers of standard thermoplastics were brought down to earth very early in October. After initially calling for increases of up to EUR 50/t for polyolefins, they were forced by customers in most cases to pass on the monomer reductions of EUR 10/t for ethylene (C2) and EUR 20/t for propylene (C3). Converters’ continued reluctance to place any sizeable orders in view of the sluggish economic outlook led polymer prices to slide even further and end the month as much as EUR 50/t below September. At the same time, the reduced volatility upstream dashed any hopes converters may have had of more substantial rebates.PVC – for which margins continue to be exceptionally low – ended October in a weak rollover, with notations down by about the same amount as ethylene. While EPS producers had to be content with increases in line with the EUR 8/t rise in the styrene monomer (SM) price, PS producers could improve margins minimally. Although buyers held the polymer price increases to around half the EUR 50/t initially targeted by their PS suppliers, the production curbs in place for several months supported prices, despite the relatively low volume sales.
Despite all the cutbacks, cracker outages and problems in polymerisation lines, there was sufficient material in the market to meet the relatively subdued demand. Exceptions were in particular the HDPE segment, where ongoing production problems limited availability of some grades. All other market segments continued well in balance.
Demand is slackening, although there is no evidence of the feared crash. Momentum at the "Fakuma" autumn trade show in southern Germany in the third week of October was slow. While machinery manufacturers saw lively interest, distributors and compounders said business was slack. The economic crisis of 2008/2009 taught converters to adopt a proactive demand and stock management strategy so that they are taking the pulse of the end markets more quickly now.
Although oil market movements were still somewhat erratic in October, petrochemicals momentum was fairly quiet, with further small decreases – of EUR 15/t for ethylene and EUR 20/t for propylene – registered in November contract notations. The SM reference price had not been determined at press time. Producers interpret the minor cost reductions as a sideways movement, with no calls for increases or offers of discounts on the table. Without explicitly saying it, producers are aiming for a rollover this month. In contrast, after two major price increase waves this year, converters will at least expect to see the monomer reductions passed down the chain. Where rebates are linked to annual volumes, some will be in a bind, however. They will need to order in November and December to obtain their bonuses. Should the oil markets remain calm, November is likely to end somewhere between a weak rollover and a moderate price reduction.
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 October 2012: All markets calm / Costs and prices stay put at high level / Depressed demand / Moderate price pressure until year-end.
On the supply side, there are signs that converters are starting to build up stocks – no surprise given that most producers are running their lines at normal output rates even though demand remains subdued following several warning shots from the end markets. With costs also down, the price pressure on the engineering plastics market likely will continue to ease until the end of the year. The quarterly agreements concluded in many market segments will certainly have a stabilising effect on the supply 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.
PET October 2012: Market spirals down into slump / Hikes cover only higher costs / Demand hit by economic downtrend / Little improvement on the horizon / Consolidation looks likely.
Along with overcapacities, the growing pressure from Middle East and Asian imports undermined European producers’ attempts to push prices forward. The hikes implemented by North American suppliers, the last they are likely to achieve for some time, were well below their targets. After earlier rises, Asian notations remained stable.
Against this gloomy backdrop, it goes without saying that European producers do not have much to look forward to in the two final months of 2012. Prices will more or less follow the curve of production costs, not least as the current level of demand will not allow producers any manoeuvring room. Even passing on cost increases could be a challenge, depending on how aggressively imports from low-cost regions are flogged.
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 October 2012: Q3 rally lingers on the market fringes / Large TDI accounts see sharp rise / Specified MDI and polyols make gains / Q4 hikes still being pursued / Regional differences.
Producers of polyurethane feedstocks made no progress toward their lofty goal of leveraging the transition to a new quarter to push through hikes of up to EUR 150/t. In letters to customers they had argued that dramatic rises in petrochemical prices in Q3 have drastically eroded their margins, all the while ignoring the slight cost decreases for benzene, propylene (C3) and ethylene (C2) at the beginning of Q4. Their customers literally did not buy the argument.
In general, regional differences in demand made it difficult for producers to realise price gains across the board. Nevertheless, the upper end of the polymeric MDI and polyols scales as well as the basic TDI grades moved up by as much as EUR 50/t. At the lower end, no noticeable activity was registered.
For the most basic grades of PU, feedstock supply was usually sufficient to meet the relatively slack demand. Dow faced limitations for MDI, and also had to put polyols customers on allocation. Eastern Europe led demand for polymeric MDI as well as for rigid polyols used in the production of insulation material. In southern Europe, demand was weak. Orders from the bedding and upholstery as well as the automotive segments were normal, in line with the season.
Although suppliers were able to slightly improve their sales in October, this has been but a drop in the ocean of costs they incurred during Q3. Not surprisingly, they are therefore aiming to push through their Q4 calls in November. Their endeavours could, however, be quashed by a weakening general economy, the end of the season and efforts to lower inventories before year’s end. In addition, it looks as if PU availability will remain the same, if not even improve slightly.
Producers are not just faced with resistance towards their plans to hike prices – they are also confronting another raw material cost wave. The rising prices in petrochemical upstream products have been pressuring olefin (C3/C2) notations for several weeks already, and this trend could well affect the direct polyol feedstocks, too. Although the situation appears less acute for MDI and TDI, the risk nonetheless remains. Nevertheless, it is most likely that these two materials will roll over in November. Polyols, too, will probably remain at their current price level, although here the rollover will likely be stronger.
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 October 2012: Last rock-bottom ortho resins prices banished / Demand trends farther downward / Glass fibre mostly unchanged / New capacities in Europe.
With styrene monomer prices only EUR 8/t higher and the propylene contract settled EUR 20/t lower, the market for medium-reactive ortho resins saw little movement in October. Prices eased forward by EUR 10/t but only at the bottom end of the PIE range. The hikes announced by resins producers were only partly successful, generally where prices had been rock bottom. The PIE “Plastixx Composites” index pointed upward by a barely noticeable 1.8% as a result.
Glass fibre prices remained mostly unchanged at the beginning of the third quarter. The slight upward momentum that had been expected failed to materialise.
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.
Standard Recyclate October 2012: Polyolefins in a strong rollover / Knock-on effect of downswing in primary market pressures rPS / Output slacker / Expensive input material drives recyclate notations
At the end of Q3 2012 the price rally on the primary standard thermoplastics market in Europe peaked, and the trend began losing momentum. In the first third of October, notations came down, for the most part in line with the decrease on the monomer side. From mid-September to mid-October, however, recyclers will still grappling with high input prices as polymer sold earlier as virgin material made its way into the secondary market. Except for the darker rLDPE film grades that were stuck in a rollover, most other film grades along with extrusion grades saw minor increases of up to EUR 10/t. Price gains of up to EUR 15/t were seen for rHDPE on average but blown film grades pointed downward by EUR 10/t. PP recyclate hovered around a rollover while rPS reacted starkly with some delay to the downturn in primary prices seen at the beginning of Q3.
Supply and demand were largely well balanced where export enquiries kept trading in rPP, rHDPE and part of the rPS market lively. At the same time, rLDPE producers saw inventories swell as slack demand held orders to a minimum. Here, production cuts, shift reductions or earlier than planned maintenance turnarounds were called on to regulate movements. Postconsumer waste was in ample supply but was priced higher than in September.
Depending on the region, demand was normal to weak. The bank holiday in Germany curbed demand in that market as Q4 started but neighbouring regions saw improved off-take. The continued high prices in the primary market did not touch off a run on recyclate to the extent expected.
Secondary polymer suppliers are concerned about the development of business up to year’s end. Especially prevalent is the fear that the still high primary prices will keep input costs high. It has been difficult enough to pass cost increases down the chain in recent months, and as demand is likely to point downward toward the end of the year this is not a positive omen for the health of their margins. Recyclate suppliers therefore plan to defend a rollover as their rock-bottom price. If the November sun smiles on the building industry they can hope to achieve their goal.
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 October 2012: Recyclate prices not yet affected by weakness of primary market / Rollover predominates / First signs of notations crumbling for rPA and rPC / Demand slows down / Prices likely to remain stable for the time being
While the primary engineering thermoplastics market in Europe is showing signs of weakness in many areas due to the dark clouds hanging over the economy and falling costs, regrind material has so far remained fairly stable. The only secondary products to have come under attack to date are the higher-grade polyamide and polycarbonate regrind materials. All others are in a rollover.
Supply is generally well balanced, although there have been one or two reports of recyclers' stocks beginning to build. At present, however, they are still enjoying lively demand because, with primary prices so high, numerous buyers are opting for regrind material as a financially not-too-risky alternative. Despite this, there can be no talk of a huge run on secondary materials as normally occurs in such situations. In this respect, the general economic slowdown in the automotive and E&E segments is quietening down the market generally.
Although availability of production scrap improved slightly, its high cost continues to be a problem for players in the secondary sector. It remains to be seen whether, when, and by how much primary notations will decline in the near future. As a rule, it will then take several weeks before plastic scrap prices also come down. Until then, regrinders will understandably endeavour to hang on to their generally thin margins by pushing through a rollover.
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.
