Price Reports May 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 May 2014: PE sees first hikes / Tight propylene feedstock drives up PP / Slight gains for PVC / PS costs passed down / Temporary firming on PET front / Olefin derivatives likely to point up in June

PE: The continued tightness of propylene feedstock pushed western European standard PP notations higher again in May. As demand was within its normal bounds, this meant that buyers had to be put on allocation. Most producers of standard PP managed to secure at least twice the C3 increase and thus improved their margins. Stagnating indexed contracts and stable additives prices prevented PP compounds from rising.

The price of standard grades is likely to rise in June. Although propylene supply is becoming more balanced, it will take some time for the situation to return completely to normal. Producers will leverage the renewed rise in the C3 contract to push through additional price increases. This will push compounds tied to indexed contracts higher as well. After earlier delays, the latest upward momentum is also sure to affect freely negotiated transactions.

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: Despite the renewed slight decrease in the ethylene contract (the proportionate decline came to EUR 5/t), European PVC base producers were able to push through small increases in May. While some secured a rollover, others were able to lift particularly low-lying prices by up to EUR 20/t. The same trend was evident among rigid PVC blends, largely as a result of the fact that additive prices remained stable. By contrast, notations for flexible PVC compounds and paste grades continued to move sideways.

June’s ethylene contract made a turnaround, and following its rise, the upward pressure on PVC is sure to increase as well. Producers’ margins remain under pressure from the ongoing weakness of the caustic soda chain. They will try their best to exploit the improvement in seasonal demand to secure hikes. Given that the markets are quite balanced, they are likely to succeed across all segments of the PVC market.

PS: Most European styrenics producers had to make do with passing on the EUR 20/t cost rise for SM in May, that is, if they managed any hikes at all. Any hopes of achieving more proved unrealistic. In particular from mid-month, as the downtrend in the aromatics chain began shaping up, buyers made life difficult for their suppliers by holding back orders. Only EPS saw increases in line with the higher production cost. For other products, initial rejoicing gave way to wailing and gnashing of teeth, especially for ABS.

As converters expected, the styrene reference price fell by EUR 45/t, reacting to the significant fall in the benzene contract. Buyers will insist on participating in this price relief, which also was seen for butadiene. Their chances are especially good for PS and EPS. Producers for their part will try to hold on to as much of the cost decline as possible. On the whole, June could be a good trading month, especially as notations are expected to firm again.

PET: Throughout May 2014, European PET prices stopped their downward slide. Thanks to stable PX costs, producers of smaller-volume lots were even able to achieve slight hikes. They were aided by rising notations in Asia, which eased import pressure somewhat, although foreign material is still available. German recyclers in particular continue to suffer from high energy costs. They were, however, able to keep prices stable even though virgin material costs have been on a steady decline since the beginning of this year.
Prices are likely to move sideways in June. Looking further ahead, however, producers will once again come under pressure as new western European facilities are brought on stream. Import volumes are unlikely to cease either. All in all, the pressure on the entire polyester chain, including recyclate, is highly unlikely to decrease.

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 May 2014: Prices are a mixed bag / PC up / Polyamides and PBT stable / POM sees small gains / No clear direction recognisable for June either / PMMA under upward pressure

European engineering thermoplastics prices showed a varied picture in May. Whereas PC continued to feel the effects of the benzene cost increases in Q1, the three months of polyamide price rises appear to have come to an end. PBT, on the other hand, continued to trade at a high level. With POM, producers’ urgent need to improve margins resulted in a few minor increases. PMMA producers were eagerly preparing for the half-year negotiations, with early signs of impending triple-digit hikes. ABS producers factored in only a part of May’s monomer increase – see PIEWeb of 04.06.2014. PP compounds prices, on the other hand, remained stable even amid the feedstock rise, largely thanks to the protection afforded by stable indexed orders – see PIEWeb of 04.06.2014.

Where demand is concerned, there seems to be no let-up in volumes drawn by the automotive sector, which would constitute a solid base for pushing through price increases. The upward pressure nevertheless appears to be limited to PC and PMMA – the latter due mainly to monomer shortages. As for the other classic types, the balanced market suggests that prices will largely move sideways. ABS notations will likely follow the EUR 45/t decline in the cost of SM, particularly since butadiene is down, too. PP compound prices, in turn, are likely to rise in response to three months of increases in the cost of C3.

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 May 2014: MDI and polyols decline / Oversupplied TDI loses further ground and remains under pressure / Firming likely in June

MDI producers’ hopes of moving prices forward in May were disappointed. Under pressure from the rising tide of Asian imports, they had to be content with a rollover. Polyols, also under import pressure, deteriorated somewhat at the lower end of the range. TDI, which continued long, declined by the same margin as in April. In some customer industries such as building and upholstery, demand was weak, while in other branches, such as automotive and bedding, business still held up.

In June, price movements are expected to turn around. The import glut has receded, which should bring the market for the most part back into balance. Orders from the building industry are likely to remain robust. By contrast, declining toluene prices could push TDI prices down further. Even if the fall is less sharp than in May, the overcapacity situation is gradually growing structural, it seems.

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 May 2014: Ortho resins see little change / Players satisfied with business / Glass fibre stable / Potential hike attempts unlikely to have an effect

Prices of medium-reactive ortho resins were flat in May, despite slightly higher feedstocks. Based on talks with buyers, the PIE range was adjusted minimally in both directions. For the most part, however, supply was sufficient, and notations rolled over. With propylene up EUR 10/t and styrene down EUR 45/t there is unlikely to be much price movement in June, either, if demand remains constant.

Notations for glass fibre products also remained stable in May. The spectre of higher prices for Chinese and North American product has been raised, but no significant increases have been seen as yet. In any case, it does not seem likely that they will reach Europe's shores. Here and there, Japanese imports have been spotted, putting additional downward pressure on the already low European prices.

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 May 2014: PE regrind prices stable but tending up / Moderate rises with rPP and rPS / Secondary PET affected by weak primary market / Trends likely to strengthen in the next few weeks

There were a number of small increases for both secondary polyolefins and recycled PS between the second half of April and mid-May, but with numerous large orders for rPE film, there was little change. Taken across the whole product range, May has thus proved so far to be very disappointing for recyclate suppliers. Although an industry arrangement has been reached for 2015 as regards the EEG exceptions, the risk nevertheless exists for the current year that medium-sized enterprises will be left sitting on the substantial increase in electricity costs. This is all the more serious for PET recyclers because the fall in prices on the primary market has significantly intensified the pressure on the secondary market. There is very little relief coming from the purchasing side, and this could make the situation threatening for an increasing number of companies.

With the secondary grades of PE, PP and PS, it is highly likely that there will be further price increases in the next few weeks due among other things to the upward tendency of primary prices, assuming demand remains lively. All PET regrind grades, on the other hand, will be capped by the surplus material available on the primary market. Here, there is a slight tendency for prices to fall.