Price Reports December 2013

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 December 2013: Polyolefin cost increases implemented in product prices / PVC and PS producers have little luck with price hikes / PET prices stable / Upward trends in the January forecast

As the ethylene contract price for December cancelled out the decline of the previous month, producers responded immediately by adding EUR 30/t to their PE prices. They were, however, unable to push through their original calls for an extra EUR 70/t, which they desperately wanted to improve margins. Even the aggressive stance adopted by some producers did not help, because imports or spot market offers were always an alternative for buyers. Generally speaking, supply was sufficient to meet the gradually declining demand at the end of the year.

In December 2013, European producers of standard PP for the most part were able to pass on at least their higher production costs. Additional gains were possible only where buyers were paying extremely low prices. At mid-month, however, the supply side had managed to push through a minimal surcharge for top-up orders. In freely negotiated transactions, PP compounds moved slightly higher on the back of indexed contracts reacting to the C3 contract increase.

Supply of standard material tightened continuously throughout the month. Even though demand dwindled as usual in December, there were delivery delays, and some buyers had to be put on allocation for orders that were within forecasts but not signalled in advance. The window for speculative pre-buying was firmly shut. As a result of a balanced market situation in a month characterised by weak order volumes, European PVC producers in December managed to pass on part of the moderate price increase for S-PVC base material. The cost of unplasticised dry blends and compounds rose only by the respective share of S-PVC base material due to stable additive prices. Though the cost of plasticisers took a slight decline, it was the increase in matrix material costs which impacted PVC (P) compound prices. As the cost of plasticisers fell slightly, price trends for PVC (P) compounds cancelled each other out, leading prices to roll over. The entire cost increase was passed on for E-PVC pastes.

Plans by some European PS and ABS producers to win increases exceeding their slight cost rise in December were unsuccessful. For PS, they were able to pass on – at most – the additional costs and for ABS, a rollover was the best they could do. For the most part, EPS producers generally were not even able to win back the full EUR 10/t higher bill for SM as planned. In the short production month of December, demand was mostly slacker than in November. For EPS packaging grades and PS, demand was comparatively stronger. European PET prices stabilised in December 2013. With regard to the smaller and medium-sized orders reflected in the PIE range, producers even managed to secure slight increases – even though the cost of both the PX and MEG contracts stagnated at November’s level. The successful price hikes were set against the backdrop of a decline in cheap imports, which strengthened the impact of the output restrictions put in place across Europe.

At the beginning of 2014, C2 prices have risen again by EUR 15/t. Production machines will gradually be re-started, and many contract customers have already ordered their normal quantities. It is quite feasible that producers will launch another initiative to raise their margins as demand improves. To what extent they will succeed in view of the renewed rise in feedstock prices remains to be seen.

In January, price rises for standard grades are likely to be in line with December movements. The contract for C3 has been fixed EUR 20/t higher, and as many converters will need to reorder, supply will be tight. This will widen the scope for further price increases. PP engineering compounds also will surely be swept upward, in particular because of the good automotive economy. As January gets underway, all signs point to moderate increases for PVC notations. Though producers will supply sufficient material to allow processors to restock, they will not be able to provide anything beyond that. A potential hike in the ethylene price will definitely be factored in and some producers might even be able push through a small margin improvement.

Converters who were not obliged to run down inventories at annual balance sheet time stocked up in December as most assumed that the higher cost mix price would pull ABS notations upward in January. The assumptions are surely correct as the styrene monomer contract was fixed EUR 35/t higher. All signs point to stability in January. The upstream sector has calmed, and there are no imminent changes in the current market reality in sight. However, the current situation could quickly turn into one of oversupply during the first few months of 2014, as several new PET plants are due to be commissioned in southeastern Europe, the Middle East and Europe itself by the middle of next year.

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 December 2013: Little price erosion / Lively automotive demand and quarterly contracts support notations / Upward pressure delays signing of longer-term contracts

In December 2013, the European market for engineering thermoplastics was mostly quiet. The only slight softening tendencies were seen at the upper end of the range for PC and some polyamide grades. As usual, the Q4 agreements, which are now up for renegotiation but still valid, contributed to price stability in free trading. ABS also remained predominantly stable. PP compounds, by contrast, saw moderate rises, due to higher propylene costs.

On the whole, polymer prices in December were supported by the surprisingly lively business in the German automotive industry. Car makers added production shifts between the Christmas and New Year holidays, and this boosted polymer offtake even if overall demand flattened as usual toward year’s end.

In January, benzene climbed by a further EUR 37/t, putting all downstream products under pressure. Polymer producers’ drive to lift their prices to recoup rising costs continues to be hampered by the still subdued demand. That they will not be deterred is evidenced by the fact that negotiations on many longer-term price and delivery agreements are proceeding only very sluggishly. For the near-commodity PP compounds, hikes are on the horizon, anyway.

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 December 2013: Production costs still rising but polymer largely stable / Supply tight and prices weak / Trend looks likely to continue in January 2014

In December, notations for polyurethane components remained largely stable, despite the EUR 109/t rise in the cost of benzene. MDI producers were unsuccessful in attempts to pass on their higher costs to customers, and TDI producers also were unable to pass on the most recent increase of EUR 89/t in the toluene price. Making matters worse – for them – they also had to make minor concessions to pay tribute to the decline in upstream notations a month earlier. Rigid polyol prices went up slightly at the upper end of the range, reflecting the increase in the ethylene contract.

PU supply is growing increasingly thin, especially as some plants are in maintenance turnarounds. However, the market was still essentially in balance in December as the construction season was over and many converters were using the slower business days around year’s end to destock. When trading begins again in earnest in January, stronger demand could meet low inventories and lead to price hikes.

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 December 2013: Little price movement at year's end / Only ortho resins down slightly / Supply mostly exceeds demand / January hikes for glass fibre

Prices for medium-reactive ortho resins fell slightly, by around EUR 10/t, in December 2013, as the sharp cost decline seen in the preceding months was counterbalanced by a recent firming of feedstock. Notations for glass fibre products and chopped strand mats remained unchanged at the November level.

December was a short production month and demand was seasonally weak, even if the automotive and utility vehicle segment provided positive momentum to trading. In view of the slack demand, all products were sufficiently long despite lower output volumes.

At the beginning of 2014, PIE’s “Plastixx Composites” index turned around after declines in November and December 2013. For ortho resins, the increase of EUR 35% for styrene monomer (SM) and of 20% for propylene meant that prices would not decline further.

Notations for glass fibre products could begin pointing upward. In autumn, one producer had announced hikes for chopped strand mats. Even if no announcements have yet been made, for new contracts, higher prices definitely are being talked. If the substantial increase in demand expected in the second half of January materialises, it would support the producers’ drive.

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 December 2013: Unusually solid order activity stabilises secondary markets / Firming primary market prices drive rising demand for regrind / Risk of hikes come January

Against the background of surprisingly good demand for this time of year, the price of standard regrind remained mostly stable from mid-November to mid-December. There were only occasional declines, following the downward trend which has been evident in the primary sector since October. By contrast, some secondary film segments have responded to firming production scrap prices, albeit only slightly.

In the coming weeks headed into January, the market is widely expected to tighten. Most regrinders will shut down their lines during the holidays, and as demand has been relatively strong, has slowed the build-up of inventories. Meanwhile, order activity remains high, and come January, numerous processors are expected to hand in additional requests to fill up stocks. All this means that the cost of many recyclate grades is expected to climb upwards.

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 December 2013: Secondary market barely affected by falling prices on primary markets / Lively demand for regrind material / January likely to experience a consolidation phase

The only price reductions in December were for the engineering recyclate grades that are in close competition with the virgin material. Otherwise, the gap between the primary and secondary product was large enough to keep prices stable. As many prices for production scrap also dropped slightly, regrinders were able to benefit – for the first time in many weeks – from a small margin bonus in time for Christmas.

Secondary suppliers have been helped in recent weeks by surprisingly brisk demand. The automotive sector is still remarkably lively and, in many cases, the holidays originally scheduled over the Christmas and New Year period have been shortened again. This, in combination with wide-ranging consolidation on the primary market, means that engineering recyclate prices could be pushed up slightly in January. For now, however, the cost of production scrap should remain at an acceptable level, thus easing pressure at the beginning of 2014.

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!