Price Reports February 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 February 2014: Notations take cost developments as their cue / Markets mostly balanced / All signs point to most notations rolling over into March / PS and PET under stronger pressure

PE: European PE producers began February on an optimistic note, hoping to realise a rollover. They soon had to realise, however, that their goal of pocketing the EUR 40/t decline in the month’s ethylene contract was far-fetched. Even though demand picked up, the market was largely balanced and there were no reports of any bottlenecks. During the course of the month, rapidly rising spot notations and a number of nervous suppliers then finally put paid to the rollover dreams, so that in the end, producers had to pass on the monomer decline. LDPE suppliers even found themselves granting rebates of EUR 50/t after the trade channel freed up some of the volumes purchased last fall. Although March’s ethylene contract was fixed EUR 20/t lower, suppliers can draw on two developments in their renewed rollover calls. For one, oil notations have firmed in the wake of the crisis in Ukraine and are sure to take naphtha prices up, too. Secondly, with the weather still mild, demand is sure to pick up as spring gets underway.

PP: After February’s propylene contract rolled over, European producers of standard PP called for price increases of up to EUR 20/t to improve margins. They were unsuccessful, however, as the market was well-balanced and spot notations pointed downward. In the end, all polymer market players agreed on a rollover. For compounds it was a foregone conclusion, anyway. Producers were able to bring buyers paying low prices up to scratch. In March, the C3 contract rolled over again. With supply and demand still in balance, the same sideways movement was seen for all PP grades.

PVC: European PVC producers seeking hikes of up to EUR 30/t in February saw their efforts thwarted by a further decline in production costs. The most they achieved was a rollover. In some cases they even had to accept slight price declines – despite livelier demand. Additives held notations for compounds mostly stable, but modifier prices rose slightly. In March, ethylene gave up a further EUR 20/t, but producers’ margins continue to face severe pressure from lower caustic soda prices. As maintenance turnarounds are on the agenda this month, the market could see some tightness for base polymer. At the same time, the approaching spring season could provide an impetus for demand. All in all, the signs point to a weak rollover.

PS: The slight rise in February’s styrene monomer reference contract pulled prices for styrenics up with it. But as producers of PS, EPS or ABS were unable to recoup the full extent of their cost increase, their margins deteriorated. Buyers’ hopes that PS prices would come down in March curbed February demand. Despite it being the off-season, orders for EPS were driven by the building sector, which profited from the mild weather. Overall, ABS activity showed little change against January. Demand for styrenics will increase in March if the EUR 57/t decline in the SM reference contract provides converters with an impetus to buy.

PET: In the grip of the -92/t decline in the PX feedstock contract, European PET notations also headed downward in February. Producers nevertheless managed to add a margin component as they only passed on about half their cost reduction. Across the Atlantic, too, PET prices continued their decline, while notations in Asia stabilised. Although European plants continued to operate at reduced output rates in February, the market remained oversupplied. Imports have meanwhile breached the 30% mark, insiders report, adding that stock levels remain high amid the still muted demand. In March, producers hope that seasonal business will awaken from its winter slumber. Asian numbers already appear to have stabilised, but PX could still shed a few feathers. Following the course taken by ethylene, MEG also appears to be heading downhill. In addition, several converters have already said they intend to push for the remaining cost reduction producers pocketed in February. It is thus highly likely that PET prices will continue their decline in March.

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 February 2014: First PC and POM hikes grip / Rising production costs passed on / Polyamide still stable but trending up / Notations set to rise in March

In February 2014, the sleeping volcano started to rumble, as the swelling cost of raw materials seen in recent months broke open the solid crust of the European engineering thermoplastics market. The key aromatic benzene especially demanded its tribute.

February's eruptions were still rather modest and limited to POM and specified PC grades. Although polyamide producers had called for hikes, they were not able to push these through in full. The market was much quieter for PMMA and PBT – with the latter actually seeing production costs crumble. Prices for ABS gained slight momentum while notations for PP compounds stagnated across the board.

As March began, notations for all of the classic engineering thermoplastics except PBT were pointing higher in the run-up to negotiations for the new quarterly contracts, in which producers hope to be able to pass on some of their cumulative cost rises. The signals for raw materials prices were mixed, with rises for some products balanced by the fall of benzene from its earlier lofty peaks.

Polymer producers will pull out all stops to exploit the current cost momentum to make Q2 more comfortable for them. The downtrend for near commodities such as ABS and PP compounds is a glaring negative example.

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 February 2014: MDI sees slight upward momentum / TDI down sharply / Polyols rise on higher olefins / Flat cost curve and livelier demand will stabilise market

In February, European prices for PU starting materials moved in different directions. For the third consecutive month, MDI was boosted by soaring benzene prices. Fortunately, for buyers, the livelier – although not exactly buoyant – demand dampened the upsurge somewhat. TDI notations crashed, despite the slight increase in prices for its feedstock toluene. This PU feedstock is still priced below the autumn 2013 level and about a third below its 2011-2012 peak. Reflecting higher prices for olefins, polyols gained some momentum in February, with the propylene derivatives rising slightly more sharply than the ethylene derivatives. For the latter, declining C2 prices had a slightly dampening effect.

In March, the European market for PU feedstocks looks likely to stabilise across the board. If the weather continues mild in the first days of spring, seasonal demand will kick in. With costs expected to point slightly downward but remain stable on the whole, the two influences could combine to balance the market. The joker in the deck is benzene, which has been moving up since November and could continue to pad notations here and there.

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 February 2014: Steady erosion of ortho resins prices continues / Upward pressure on lower end despite SM slide / Higher quality chopped strand mats making gains

Despite the renewed rise in the styrene monomer contract, ortho resins prices have been eroding since the beginning of the year, yielding a decline of EUR 10/t. Even if demand from converters was picking up, the composites industry appeared to be oriented toward the substantially lower styrene price prevailing at the end of 2013. While spot transactions were picking up, this did not generally influence the PIE range in February.

In the short working month, the automotive industry was the main demand driver. There was relatively little impetus from other customer sectors. The higher value-added chopped strand mats tended tighter, as demand picked up, causing prices to rise slightly.

In March, resins notations are likely to remain stable, even if dwindling inventories could create some upward pressure. The propylene contract remained unchanged for the second consecutive month. Styrene plunged by EUR 57/t, wiping out virtually all gains made since December 2013. Producers of phthalic acid anhydride, too, have had little pleasure of late, with prices heading in only one direction – down.

Up to mid-March, when the "JEC Composites" show (www.jeccomposites.com) begins, producers are unlikely to have any price increases up their collective sleeve. This will allow them to sidestep any difficult discussions at their booths. Later, as spring demand begins to kick in, they will be holding the longer end of the stick. Orders from the automotive and utility vehicle sectors are picking up. Here and there, the wind energy sector, too, is gathering speed, and the market for recreational vehicles will be gearing up soon.

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 February 2014: Many grades rising / Construction-related activities drive demand / Extended delivery times / Building materials continue pointing up / Packaging applications under pressure

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.

The extraordinarily mild European winter has allowed many standard thermoplastics recyclers to start the year at a record level of business. Suppliers of regrind used in construction applications especially were able to lift prices at least slightly in February, buoyed further by January’s primary market backlog. Driven by ongoing construction activity, the rLDPE film sector was particularly lively. Regrind used in packaging applications also succeeded at gaining a few euros here and there, although the upward momentum was mostly driven by the moderate cost increase – as was true for rPET flakes.

Although west European recyclers are running their lines at full throttle to meet demand, they are unable to meet all their short-term orders. Delivery times for even specialised secondary materials have extended to six weeks and more.

Looking ahead towards the coming weeks, all construction-related recyclate grades will likely experience further rises – that is, if winter does not make a sudden appearance after all. By contrast, regrind used in packaging applications could come under pressure soon, following the downward trend in the primary market. PET and rPET notations especially could fall victim to the rise in imports from newly commissioned plants in the Mediterranean as well as the EUR 92/t decline in the European PX contract.