Price Reports June 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 June 2014: Rises for polyolefins and PVC slightly exceed the cost increase /  PET prices firm / PS follows styrene's downward trend / Cost increase will drive almost all notations up in July

PE: Although the market tended tighter in June, European polyethylene producers only managed to secure increases slightly above the EUR 10/t rise in the cost of ethylene. Only occasionally did they manage to push through hikes of more than EUR 20/t. In the case of more readily available products, including higher-grade LLDPE, manufacturers in fact could consider it a success if they managed to pass on their higher costs. Caught in the grasp of high-priced VAM, EVA notations added around EUR 30/t.

July will likely see substantial increases across a broad range. The EUR 50/t increase in the monthly ethylene contract is simply too great to be ignored. Producers should be able to pass on this extra cost and, depending on the market situation, could even secure larger increases for certain products, including LDPE, LLDPE (C4 film) and HDPE injection moulding material. It still remains to be seen whether the high price level will encourage the arrival of imports. EVA prices should receive further impetus now that VAM has stabilised.

PP: In June, the rise of only EUR 10/t in C3 prices clipped standard PP producers’ high-flying dreams of lifting notations by EUR 30/t. In the month’s final tally, regular orders saw gains of little more than the production cost increase. The picture for top-up orders was a different one altogether. Especially for the tighter homopolymer grades, buyers had to dig deeper into their pockets. Prices for PP compounds were propelled upward by rising propylene costs. The third consecutive monthly increase for C3 pushed indexed contracts up to a new level. Freely traded transactions for compounds quickly followed suit.

In the long month of July (with 23 working days), additional upward momentum seems assured, as producers of all PP grades will be seeking hikes of EUR 25/t. Even if propylene’s tightness has eased due to slackening demand in the wake of the SM/PO outage at Moerdijk, the C3 contract notation rose once again, this time by EUR 15/t. As two recent FMs are further limiting supply, of not only homopolymer but also random grades, the market’s real tightness in June will still be felt, at least virtually, in July.

PVC: In June, too, European PVC producers only succeeded at slightly improving their margins. They managed to net increases of about EUR 10/t, only EUR 5/t more than the proportionate ethylene cost rise. Manufacturers of compound grades and paste qualities barely netted half of that, meaning they only succeeded at recouping their costs. As a result, PVC producers – most of whom are backward integrated into the chlorine chain – continue to feel the pressure on their margins, exacerbated by the weak caustic soda market.

Prices will definitely rise in July. With their backs to the wall, PVC producers will have to swallow their proportionate share – which amounts to about half – of the EUR 50/t rise in the monthly ethylene contract. With the market largely balanced, they will probably succeed at raising prices. Whether they will manage to push through more than the cost increase, however, remains to be seen.

PS: The decline in June’s styrene monomer contract set the direction for styrenics prices. As supply was long, many PS producers passed on the full SM reduction of EUR 45/t. EPS producers, by contrast, could hold on to more of their cost advantage. The ABS market, although also influenced by the SM cost mix, danced to a slightly different tune. While producers of extrusion grades tended to pass on the entire monomer decline, injection moulders managed to pocket some of the difference. With prices down on a broad front, converters seized their chance and refilled inventories, thus inflating demand. EPS did not profit from the trend, however. Here it seems increasingly clear that the strong development at year’s begin reflected the mild winter weather and not a general building boom.

June’s lower prices gave converters a short, but merely temporary, break from the general upward trend. In July, notations for all styrenics will be pointing upward again, and this month’s rise will be stronger than last month’s decline. Once again, notations for styrene monomer will set the pace. The July SM reference contract saw an increase of EUR 82/t, thus soaring to its highest level since October 2013.

PET: Notations for small and medium-sized European PET orders rose slightly in June, as producers were able to pass on the full increase in the monthly PX contract. Their efforts were backed by rising prices across the Asian polyester chains, as a result of which import pressure eased significantly. This in turn raised the impact of the cutbacks implemented by European producers, especially at a time of slightly livelier demand. Producers of rPET were also able to exploit the firming virgin prices, passing on the increases they had been forced to swallow in May.

PET prices are expected to remain firm in July, too, with the market unlikely to feel the impact of the new plants brought on stream in Belgium and Egypt just yet. Asian and Middle Eastern producers have already called for hikes, which should keep a lid on the pressure exerted by imports from these regions. As a result, the European market should remain largely balanced, albeit at a low level. In the long term, however, prices will fall victim to the global markets’ ongoing structural oversupply.

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 June 2014: Calm prevails / Quarterly agreements forestall rises in final month of Q2 / July expected to see a spate of increases

The European engineering thermoplastics price front was relatively calm in June, which is not unusual for the final month of the quarter. Notations for all polyamides, shored up by the existing Q2 agreements, moved largely sideways, as did those for PBT, POM and PMMA. Only polycarbonate producers were able to record moderate increases – the result of their incessant efforts, dating back to the beginning of Q2, to push through hikes. In most cases, the increases were limited to more specified grades or smaller volume orders. The cost of standard basic material largely remained unchanged. ABS basically followed in the footsteps of the feedstock mix of styrene, ACN and butadiene, which fell by about EUR 30/t. By contrast, the price of freely negotiated PP compounds rose after contracts indexed to C3 climbed to a new level in the wake of the rises in propylene prices in previous months.

On the demand side, the automotive sector continues to order healthily. With the start of the new quarter, which also brings new half-year agreements, many prices are likely to rise. Benzene derivatives such as PC, PA 6.6 and, to a certain extent, ABS, will almost certainly be pushed up by the renewed EUR 99/t in July’s benzene contract. PA 6.6 and PMMA notations are also likely to climb. While there is a possibility that PP compounds prices will rise, too, both PBT and POM will probably roll over.

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 June 2014: Notations largely sideways, but rigid polyols firm / July could see all-round hikes / Iraq hostilities drive oil and petrochemicals higher

On the whole, European prices for the key polyurethane starting materials were stable in June. Both grades of MDI were in a weak rollover, as was TDI. Notations for flexible polyols were flat, despite renewed rises along the C3 chain. The tightness of diethylene glycol (DEG) led to significant increases for rigid polyols, mostly affecting small-volume orders or highly specified grades at the upper end of the range.

Except for these niche applications, the market was too well balanced to allow major deviations in either direction, but the situation could change in the coming weeks. In particular, prices along the aromatics chain could be driven higher by the hostilities in Iraq. All in all, upstream influences will play the most important role, as supply and demand for the immediate PU feedstocks are mostly in balance. Additionally, notations for even the most basic grades of rigid polyols could see upward momentum due to the DEG tightness.

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 June 2014: Resins weaken slightly / Glass fibre stable despite calls for hikes / Demand stable to strong / Little change expected before late July

In June, prices for medium-reactive ortho resins again gave way slightly. The Plastixx Composites Index conceded 2.5 points. Here and there, rebates were offered but these did not have much influence on the PIE range. With the acceleration, resins were catching up to the pace already set by the main feedstock styrene, which lost EUR 45/t in June. The only minimal increase in the propylene notation and the weakness of phthalic acid and maleic acid anhydride could not provide any impetus for a different direction.

Prices of the glass fibre products covered in this report remained stable in June. Worldwide price increases announced by a large Chinese producer from July onward probably will have little impact, even in the medium term. There is little likelihood that any of the envisaged hike will go through in Europe.

European resins and glass fibre products were readily available, and demand was on the rise. As converters’ order books were full, they ordered well. Production facilities were run flat out to keep up with healthy order volume from all applications.

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 June 2014: Notations for regrind based on sorted production scrap rise slightly following primary market increases / Simpler grades mostly stable / Uncertain situation in Iraq driving prices up

Set against the backdrop of the most recent rises in the primary market, in particular for polyolefins, notations for sorted standard regrind like PE, PP and PET also made small gains in the past few weeks. The price of simpler grades remained stable, as did that of PS regrind – despite the declines in the primary market. All in all, the market was rather balanced.

As the crisis in Iraq worsens, its impact will increasingly be felt in the recyclate market as well. The clashes in the country have driven up oil notations, which in turn are further propelling the already upward-trending petrochemical and polymer markets. It would come as no surprise if standard recyclate prices would rise, too.