Price Reports April 2014

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!

Standard Thermoplastics April 2014: PE stagnating / Tight C3 drives PP upward / PVC notations weaken / Styrenics follow the monomer cost increase / PET pointing down / Prices to rise across a broad front in May

PE: Despite a few minor successes early in the month, in April European PE producers were forced to abandon their hopes of pushing through price rises. After the Easter vacation, the price of nearly all products remained stable, which – in view of the fall in ethylene costs – actually meant producers’ margins tacked on a bit. Prices for LLDPE (C4) saw the steepest rises, thanks to the fact that EU import duties imposed on Middle Eastern material early this year are increasingly making themselves felt. The material is starting to become tight. On the other hand, notations for HDPE blow film grades slipped slightly.

Although May’s ethylene notation was fixed at a weak rollover, suppliers called for hikes of up to EUR 30/t. In most markets, it will become increasingly difficult to avoid price rises.
Developments for ethylene copolymer EVA are quite different. Faced with a major global shortage in VAM feedstock, EVA prices keep rising. The upward momentum is unlikely to come to an end in May, either.

PP: European PP prices soared in April as the tightness of principal feedstock C3 played havoc with supply. By closing order books early and declaring force majeure, producers seized their chance to improve margins at least slightly. For most standard grades, the price rises exceeded the monomer’s upswing. Among the freely traded compounds, only GRP grades escaped the cost pass-through.

Along the entire propylene chain, the market continued tight. May’s C3 contract was fixed EUR 10/t higher and almost reached parity with ethylene. Many producers struggling with cost increases are seeking hikes of EUR 40/t for standard PP grades, and the price wave still appears to have some way to go before cresting. The compounding segment as usual is unlikely to see a similar surge, but buyers undoubtedly will continue to see price hikes.

PVC: Even though caustic soda revenues remained highly unsatisfactory, European PVC producers were unable to lift prices in April 2014. Their calls for hikes of EUR 30/t were quashed by the renewed slight drop in the monthly ethylene contract. The C2 notation has been on a steady decline over the course of the past three months, strengthening the hand of processors, who were able to secure slight rebates for all PVC grades reported by PIE, from base material to compounds and pastes.

In May, the price of vinyl-based plastics could rise for the first time this year, as the minute decline in this month’s ethylene contract probably will no longer serve as a justification for declines. On the contrary, both output and inventory levels are relatively low, at a time when seasonal business – in the construction sector especially – is starting to pick up. Although it is unlikely that the calls of the larger producers will be accepted in full, prices will probably rise this month.

PS: In reaction to the narrow EUR 15/t increase in April’s SM contract, prices for styrenic polymers rose only minimally. Producers were only able to push through the entire SM increase where prices for PS and EPS insulation grades had previously been very low. In most cases, notations gained only slight momentum or rolled over – the latter was particularly true for smaller volumes or speciality grades. The presence of cheap imports of ABS and PS material curbed any upward momentum.

Demand was at a respectable level, despite the Easter holidays. The upswing in building activity boosted demand for EPS insulation materials. A central topic of discussion in the market was converters’ impending switch to HBCD-free products by mid-year. May's SM reference contract was fixed EUR 20/t higher, following on the heels of the EUR 29/t rise in the benzene notation. Against this backdrop, styrenics notations are sure to move higher, too.

PET: The prices of small- and medium-sized European PET orders receded slightly in April, following the downward trend in PX. Customers ordering larger volume lots had already received rebates in March, which meant their prices mostly rolled over. Those looking for alternate suppliers were able to procure low-priced offers from southern Europe, which competed with imports from Asia. No longer able to withstand the pressures of the virgin market decline, prices for high-quality rPET grades slipped slightly in April.
The market remains chronically oversupplied. However, since costs have stabilised, prices could end up taking a breather in May before continuing their downward slide. With a number of new large-scale plants set to start up in Europe soon and demand expected to remain stable, the current oversupply is set to worsen, further pressuring notations. In the long run, recyclate notations, too, will be unable to withstand the general downward trend.

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 April 2014: Price upswing gains momentum / PA 6, POM and PMMA rise / PC, PA 6.6 and PBT flat / Automotive demand still lively / More hikes on the horizon

European prices for engineering thermoplastics are gradually moving upward as 2014 progresses. PA 6, which is driven in particular by benzene, was hit the hardest in April as producers leveraging an already tight market pushed through hikes at the beginning of the new quarter. Despite producers’ efforts, PC and PA 6.6 did not show much momentum. Due to strong resistance from automotive customers, most prices rolled over. The situation for PBT was much the same. In the POM segment, notations for specified grades rose, but cheap imports kept standard products on a tight leash. PMMA’s upswing largely paralleled that of PA 6. By contrast, the near-commodities ABS – see PIEWeb of 06.05.2014 – and PP compounds – see PIEWeb of 06.05.2014 – rose only moderately.

Notations for PA 6 are clearly firming. Maintenance turnarounds for caprolactam feedstock are also restricting compounding activity. Compounders would be happy to supply the lively demand, but do not always have sufficient base polymer. No other engineering polymer faces such turbulence.

For May, further rises are likely, certainly for PA 6. The ongoing benzene surge has put such pressure on PC that here, too, producers are firmly resolved to push through increases, even if these may not take effect until after the semi-annual price rounds in June. PBT will continue to hover gently above the turbulence, with POM producers still having to battle imports. Those PMMA buyers not yet paying the higher prices implemented at the beginning of Q2 will be pulled up. PP compounds and ABS will continue to be driven by the forces of the commodity markets in which they play.

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 April 2014: Tight supply prompts upsurge for MDI and polyols / Downtrend for long TDI continues / Strong demand could push notations above the cost rise

A good industrial economy and the revival of seasonal demand supported price developments for most polyurethane starting materials in April. The only exception was TDI, where overcapacity continued to pressure notations. Polymeric MDI producers were able to realise much of their targeted increase of EUR 70/t. On the back of strong demand from the adhesives industry, price hikes for many grades of MDI came close to producers’ targets in spite of the relatively moderate EUR 16/t rise in benzene costs.

Toluene notations were caught in a weak rollover as Asian imports swelled availability and demand was slack. For small volumes or specialised grades of flexible polyols, producers achieved hikes exceeding the cost rise for propylene oxide. Thanks to strong demand from the building sector, producers of rigid polyols for insulation managed to pull low-lying prices upward despite the ongoing deterioration of feedstock costs.

The price curve for aromatics such as benzene and for crucial olefins such as propylene is pointing upward. At the same time, seasonal demand is supporting notations for MDI and polyols. Against this backdrop, producers will seize their chance to not only recoup their additional cost but also add a margin component. The maintenance turnaround at a TDI plant could help ease oversupply in this market.

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 April 2014: Notations for ortho resins and glass fibre products unchanged / Strong demand meets long supply / No bottlenecks / Stability likely

Prices for medium-reactive ortho resins rolled over from March into April. While there were a few minor movements, both up and down, these were not strong enough to generate a trend. Large consumers as usual paid proportionately less than smaller buyers. The "Plastixx Composites index" remained unchanged (see chart).

On the feedstock side, too, the numbers were largely stable, leaving resins producers with no arguments for price increases. In April, the styrene contract rose only slightly, by EUR 15/t, and propylene climbed only EUR 10/t higher. Maleic acid anhydride saw a strong rollover, and phthalic acid anhydride notations also were largely stable.

The market boomed, most players told PIE. Exterior applications picked up fresh momentum and are now helping to drive business. Even with demand strong, production facilities are being run flat out, so that delivery delays appear unlikely. The market for glass fibre products is also performing well. Here, too, scant change is expected well into June.

As upstream contract prices firmed further in May, with styrene adding EUR 20/t and propylene adding EUR 10/t, ortho resins potentially could trend higher, too, although this scenario does not seem particularly likely. However, if resins demand continues rising at the same pace, some supply bottlenecks for the more specialised grades could crop up.

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 April 2014: Most notations rise slightly / Order volume somewhat weaker than in preceding months / Producers plan to lift prices as construction and agricultural seasons get underway

NEW: Notations for rPET grades
PIE has begun reporting prices for three PET regrind materials: rPET clear (ready-to-use recyclate for bottles and film), rPET flakes clear (mainly used for film) and rPET flakes coloured (mainly used for straps). As always, PIE prices are sourced both from web-based and personal consultations with market players. The new reports follow a prolonged period of trial and discussion.

For the first time this year, producers of standard recyclate were able to push through hikes for rLDPE, rPP and rPS. The increases were set against the background of a general bottoming out in the respective virgin material notations. The hikes achieved nevertheless fell short of regrinders’ original calls for rises of up to EUR 40/t, which they justified by pointing to their higher production scrap costs. German players also emphasised their having to make do without the renewable energy subsidy. Contrary to the general trend, rHDPE notations treaded water, while pressure from the primary market saw rPET prices decline slightly.

There generally was enough polyolefin production scrap available, although recyclers had to pay big bucks for it. Styrenic scrap also sufficed to keep recyclate lines in normal operation, although here, too, procurement prices were quite high. The fact that PET bottle returns remained below expectations meant recyclers quickly converted whatever material they could get their hands on. All in all, the recyclate grades covered by PIE were readily available although the seasonal rise in demand from the construction, agricultural and gardening sectors consumed nearly all output.

Recyclers plan to exploit the rise in demand and what looks like an increasingly stable virgin market to pass on some of their additional costs. Depending on the material in question, they are calling for hikes of EUR 20-40/t. The exception is rPET, where the current virgin material situation is putting paid to any attempts at lifting prices and recyclate producers would be content with a strong rollover.